Sunday, 07 Jun 2020

Canada's Cannabis Boom Could Be Taking Off Soon

LONDON, May 18: Ten years ago, Netflix introduced a brand-new business model known as streaming. The idea began with a modest 1,000 titles, but the site now boasts over 100 million users in more than 190 countries, consuming a massive 37 percent of all internet traffic at peak hours.

Mentioned in today's commentary includes: 22nd Century Group, Inc. (NYSE: XXII), Intec Pharma Ltd (NASDAQ: NTEC), The Supreme Cannabis Company, Inc. (TSX.V: FIRE) (OTC: SPRWF), MedReleaf Corp (TSX: LEAF) (OTCS: MEDFF), Aphria Inc (TSX: APH) (OTC: APHQF).

Not only has this innovative idea revolutionized the way we consume media, it has popularized the way certain aspects of the free market functions. Now, what has become a very popular market strategy can be applied to nearly everything, including one of the fastest growing and most attention-grabbing industries on the planet - marijuana. Using a similar streaming model, one Canadian company is looking to single-handedly transform key aspects of the cannabis industry, which is expected to grow to $31.4 billion by 2021 .

Despite the incredible competition in the blooming pot market, Cannabis Wheaton Income Corp.(CBW: CBWTF): is aiming to become the go-to financier for the entire sector, and this bold new strategy will undoubtedly set it apart from the pack.

As Canada's push to legalize recreational marijuana quickly approaches its final hurdle, the space is ripe with opportunity. But this is no normal opportunity - it is a rare, specialized chance for entrepreneurs and investors to break ground on an entirely new industry - legalized pot.

Since Canada began permitting medical marijuana, demand has soared, and the number of patients is expected to more-than-double within the next three years. And that's just the medical market. When recreational pot is legalized, consumption is expected to soar so quickly that the nation's producers will not be able to keep up.

Canaccord Genuity estimates there will be an additional 3.8 million recreational users consuming over $6 billion of this green gold. And to make this opportunity even more exciting, the Financial Post estimates this surge in demand will result in a severe supply squeeze, as current production would only cover approximately 7 percent of the anticipated total demand.

This is why Cannabis Wheaton has a leg up on the competition. Not only does the world's first cannabis streaming company have a first-mover advantage, they have an incredible team of innovators with ample experience in the field.

With their innovative financing strategy and a looming cannabis supply squeeze, Cannabis Wheaton is one of the most exciting companies in the space.

Here are five reasons investors are watching Cannabis Wheaton (CBW: CBWTF):

#1 Legalization on the Way
The moment Canada has been waiting for is now right around the corner. With only one more hurdle to cross, the space is buzzing with anticipation.

The final vote for legalization is scheduled to go through by August, and once that happens, the industry is set to explode as everyone tries to get a piece of the pie. Ultimately, though, only the strong will survive.

As companies across the country rush to get into the space, competition is rampant, and it will take something special for a company to distinguish itself from the pack, and that's exactly what Cannabis Wheaton (CBW: CBWTF) has going for it. Thanks to its royalty-streaming model, an innovation that is already changing the entire sector, Cannabis Wheaton is sure to shine.

#2 'Streaming' Deals Already Lined Up
This could be the ultimate opportunity for producers. Cannabis Wheaton's innovative approach isn't like anything else on the market. Through this new royalty-streaming business model, investors are able to obtain a lower risk exposure to the expected cannabis boom. With Cannabis Wheaton, exposure isn't just limited to a single crop: investors receive access to multiple licensed producers to take advantage of this burgeoning industry.

Taking a leaf straight out of Netflix's playbook, Cannabis Wheaton will be funding the growth plans of licensed producers, allowing them to scale quickly in order to meet the industry's skyrocketing demand. The company already has partnerships with 39 clinics, with access to over 30,000 registered medical marijuana patients.

Additionally, partnership agreements have been signed with 15 cannabis producers across Canada, accounting for a combined 2.0 million effective square feet of growing space. And with its flexibility, Cannabis Wheaton has the potential to expand quickly, enjoying a portion of equity and royalties stemming from every new producer that joins its 'streaming' platform.

# 3 Fast Track Scale-Up
Cannabis Wheaton is all about fast growth and capitalizing on market share. With its ground-breaking royalty-streaming model, the company is free from single-crop limitations.

Already, five million Canadians use pot recreationally, almost all of it acquired illegally. That's a huge potential market for Canadian legal distributors. And with a looming supply squeeze, producers will need to scale quickly. The domestic market, according to one Toronto-based investor, is simply way bigger than a lot of people believe. And that's only the beginning.

If other countries follow in Canada's footsteps, the global demand could increase exponentially, and thanks to Cannabis Wheaton's streaming structure, it should be able to raise capital and produce product necessary to meet greater demand.

Cannabis Wheaton could very well be a go-to distributor in the next phase of marijuana retail, with the potential to dip into online orders and home delivery, cutting out the middle-men from the equation.

#4 Canada's Pot Problem: Very Tight Supply
Canada has a pot problem. Cannabis supply is already running low. With only 100 licensed producers and only 39 producers with authorization to sell, the liberal Canadian government has even had to streamline the approval process for growers as demand has tripled in the past year.

And that's just medical marijuana. When recreational use becomes legal, Deloitte estimates direct sales alone being close to $8 billion and total economic impact of the industry will soar to $22.6 billion annually. That is more than sales of beer, wine, and spirits combined, and with that kind of demand, it will be impossible for producers to keep up without a dramatic change in operations.

Cannabis Wheaton has positioned itself ahead of the pack. With its potential to scale upwards and help producers do the same, the company is poised to be a vital piece of the puzzle.

There is a segment of the marketplace where people are trying to get their facilities built and they don't have access to capital at all, Hugo Alves, President and Director of Cannabis Wheaton, states.

#5 Canada's Pot Solution: Cannabis Wheaton
Canada's pot producers are struggling to grow with the industry. Despite the massive market share potential, many growers are having a difficult time securing the funding necessary to keep up with demand. And because the industry is still young, many investors aren't exactly rushing to throw money into the space.

This is where Cannabis Wheaton's (CBW: CBWTF) genius truly shines.

Not only will producers still maintain control over their product, they will be able to secure the financing and expertise they need to scale quickly and efficiently. It also provides an opportunity for investors to join the boom in an entirely new way. Cannabis Wheaton is the full package.

Cannabis Wheaton has discovered how to take this growing industry to the next stage in its evolution. And the best part? Cannabis Wheaton is sure to enjoy a steady stream of royalties along the way.

This is the Cannabis Market 2.0, and Cannabis Wheaton not only has first-mover advantage, but so far it has only-mover advantage, with the expertise to back it up. And once Canada is secured, this model could be looking to set up with first-mover advantage internationally.

Other players looking to take advantage of the marijuana boom:

22nd Century Group, Inc. (NYSE: XXII): A biotechnology company that that develops, markets and licenses genetically modified cannabis, marijuana and hemp. As the green rush picks up pace, there will undoubtedly be growth in this market and large gains for those who find themselves at the front. The tobacco products of 22nd Century Group, Inc provides the diversification that many investors require when entering a new market.

Intec Pharma Ltd (NASDAQ:NTEC): Intec is an Israeli based pharmaceutical company that earlier this year announced an early-stage study testing its painkiller made of natural CBD and THC extracts. This kind of marijuana-based painkiller will become increasingly popular as full-scale legalization takes place, and as one of the first movers in the space Intec is undoubtedly one to watch.

With its stock trading around the $5 mark and a market cap of over $160 million, this is a secure and cheap option for traders looking for limited exposure to the space.

The Supreme Cannabis Company, Inc. (TSX.V: FIRE) (OTC: SPRWF) is engaged in production and sale of medical marijuana. The company is a cultivator and distributor of sun-grown cannabis through its wholly-owned subsidiary 7ACRES. The Company is focused on the wholesale sector of the medical cannabis market in Canada and operates an approximately 342,000 square foot greenhouse facility located in Kincardine, Ontario.

MedReleaf Corp (TSX: LEAF) (OTCS: MEDFF): As a licensed producer of cannabis-based pharmaceutical products, MedReleaf Corp has a head start on the coming boom in Canada. Early July has seen a bounce in the stock price, and investors may look to ride it upward from here. Med Releaf could become Canada's second biggest medical marijuana company after Canopy Growth Cooperation as many analysts expect the 'legal weed' industry to grow 25% on an annual basis over the next 10 years.

Aphria Inc (TSX:APH) (OTCQB: APHQF): Aphria Inc is engaged in the production and selling of medicinal marijuana, and while the stock has trended downward since April, the constant profits here suggest there is a lot of upside. The recent pro-marijuana legislation from the Canadian government is sure to boost companies with the reputation of Aphria Inc.

(PRN | 2 years ago)