NEW YORK/ — Entering a new year is exciting, especially when the future holds the promise of expanding marketplaces and business opportunities. From growers and processors to the essential support services and an increasing number of retailers, cannabis companies are looking at 2018 as a breakout year for unprecedented growth. California’s launch of legal marijuana for adult recreational use kicked off January 1, and Canada is set to follow the same path in July 2018. An article in Newsweek reveals at least 12 states are poised to consider legalizing some form of marijuana in 2018 (http://nnw.fm/1ETMq), marking the latest in a quick volley of changes being implemented by lawmakers and the public as more than 60 percent of Americans say they support legalization for adults (http://nnw.fm/pFa4w). Companies nimble enough to take advantage of these promising changes include DOJA Cannabis Company Ltd. (CSE: DOJA) (OTC: DJACF) (DJACF Profile), Growlife, Inc. (OTC: PHOT), United Cannabis Corp. (OTC: CNAB), Cannabis Wheaton Income Corp. (TSX-V: CBW) (OTC: CBWTF) and Supreme Cannabis Company, Inc. (TSX-V: FIRE) (OTC: SPRWF).
Acquisitions, deal-making, and expansion plans are on the minds of many in the cannabis sector as 2018 enters the world. A new Viridian Cannabis Deal Tracker report states the amount of financing raised in 2017 to support the coming cannabis boom is a staggering $2 billion in Canada alone, according to an article in the Financial Post (http://nnw.fm/Lxo1J).
“While the medical market is expected to continue to grow over the next several years, the size of the coming adult-use market is expected to far exceed that of the medical side,” said Harrison Phillips, Vice-president at Viridian, told the Financial Post. “Companies have been raising significant amounts of capital, primarily to increase capacity to satisfy the coming surge in expected demand.”
For DOJA Cannabis Company Ltd. (CSE: DOJA) (OTC: DJACF), 2017 was full of progress and the development of several successful ventures that will help the company gain a secure foothold in the recreational cannabis market in the new year. DOJA CEO Trent Kitsch in the company’s 3rd Quarter 2017 report (http://nnw.fm/Uv2Dv) praised the company’s team effort to make 2017 a banner year, stating, “I am very proud of our team’s year-to-date accomplishments. We have reached a number of milestones in less time and for less investment than originally budgeted.”
DOJA is a premium cannabis lifestyle brand featuring the highest quality handcrafted strains in Canada. DOJA’s wholly owned subsidiary, Northern Lights Marijuana Company, is a Health Canada licensed cannabis producer located in Kelowna within the heart of British Columbia’s picturesque Okanagan Valley. The company recently harvested and cured its first batches of premium handcrafted cannabis flower, requested a pre-sales license inspection from Health Canada, and began construction of the FUTURE LAB’s 22,580-square-foot state-of-the-art extraction facility and lab that can support greatly increased production capacity – all impressive milestones for a company committed to establishing itself as Canada’s leading lifestyle cannabis brand (http://nnw.fm/qXT1m ).
“We know that iconic brands are backed by iconic products, so our attention has been placed firmly on the art of growing, trimming and curing to ensure the quality and consistency of our handcrafted cannabis flower,” Kitsch said. “Looking to the future there are a number of initiatives that we plan on executing that will further differentiate the DOJA brand and create value for our shareholders.”
Underpinning that statement, DOJA on December 21 revealed its binding letter of intent with Tokyo Smoke to acquire all of its issued and outstanding shares http://nnw.fm/9ON1k). The proposed merger will create a unique cannabis company – to be named Hiku Brands Company Ltd. – that combines a retail-focused cannabis company with DOJA’s specialty cannabis flower production facilities. The company also announced a strategic equity investment of approximately $10 million into the newly-combined company by Aphria Inc. The combination of cannabis production, retail footprint and a portfolio of cannabis brands is expected to provide the newly formed company the opportunity to realize the significant value of complete vertical integration.
In October the company announced its plan to expand its production capacity with the build-out of its new, much larger growing facility.
“The Acquisition is a game changer for DOJA, it allows us to expand our production capacity by almost 8 times, diversity our strain production, integrate a world class extraction lab and leverage the economies of scale that come from a larger growing space,” Kitsch said in a news release (http://nnw.fm/rWR4Q). “Our strategy has always been to reach 5,000 kg of cannabis production per year by the end of 2018, with the addition of FUTURE LAB we project we will reach our goal in less time and for less capital investment than previously budgeted. The FUTURE LAB has 325 feet of highway frontage which will be utilized to promote DOJA’s cannabis lifestyle brand to the 1.9 million-plus visitors to the Okanagan each year and the 40,000 commuters that drive past the facility each day.”
Expanding DOJA’s cultivation capacity and scale provides a near-term supply source for dried cannabis flower that is grown, trimmed and cured in a premium fashion at a price per gram that is within the company’s control – ensuring DOJA remains competitive on a national level. DOJA’s FUTURE LAB state-of the-art extraction lab will drive innovation in the cannabis concentrates and edibles sector, which company officials expect will overtake cannabis whole flower sales in the future.
Closing out 2017, the company recently finalized a previously announced bought deal private placement of convertible debenture units, raising $17.25 million to be used for capital projects and general corporate purposes (http://nnw.fm/WcBi8) as it continues its pattern of growth.
Growing healthy and productive cannabis isn’t done without a great deal of help from Mother Nature and a host of specialty support services. As a nationally recognized cultivation brand for the cannabis industry, Growlife (OTC: PHOT) provides world-class hydroponic equipment, lighting, nutrients, media, and other cultivation supplies to commercial and urban operations. Based in the state of Washington, GrowLife has added an all-in-one home cultivation system called “GrowLife Cube Pro“ to its product offerings. The company is introducing the product as a way to service the exploding recreational cannabis markets in California and other states where adults will be permitted to cultivate up to six plants per adult under local law (http://nnw.fm/B33cS ).
Denver-based United Cannabis (OTCQB: CNAB) is constructing a state-of-the-art industrial hemp processing plant that will include extraction, purification, testing and processing equipment, as well as packaging, fulfillment and secure storage capabilities, according to a news release (http://nnw.fm/klBB1). The company, which provides consulting services, proprietary products and licenses its intellectual property to businesses in the cannabis industry, is branching out to provide contract manufacturing to farmers working under the 2014 Federal Farm Bill and Colorado’s Department of Agriculture’s Industrial Hemp Program. Farmers in the program will be able to convert harvested industrial hemp plants into a range of products, from simple extracts to capsules to sublingual drops, and have them packaged for resale, the company states in the press release.
Cannabis Wheaton Income (TSX-V: CBW) (OTCQB: CBWTF) is also advancing its footprint in the cannabis sector by entering into a letter of intent with FV Pharma Inc. Under the agreement, Cannabis Wheaton will develop all aspects of FV’s cannabis cultivation facility in mutually agreed staged phases, creating the largest indoor cannabis cultivation and processing facility in the world. A joint press release states (http://nnw.fm/l6wmD). The FV facility, located one hour east of Toronto, Canada, is an existing 620,000 square feet of building space once used by KRAFT® as a food manufacturing facility.
Another Canadian company committed to becoming a leading cultivator and distributor of specialized cannabis is Supreme Cannabis Company (TSX-V: FIRE) (OTC: SPRWF), which recently changed its name from Supreme Pharmaceuticals Inc. The company’s 7ACRES subsidiary is a federally licensed producer of medical cannabis with a 342,000-square-foot hybrid greenhouse facility in Kincardine, Ontario. The recent purchase of six acres adjacent to this facility is expected to produce high-quality “California-Style” cannabis for the premium product segment once construction of an indoor cultivation facility is completed, the company stated in a news release (http://nnw.fm/Y9Ira ).
2018 may certainly turn out to be a rollercoaster for the cannabis industry, with more participants than ever punching a ticket to ride. But there are ample opportunities for growth in various sectors of a global industry that Grand View Research, Inc. expects will reach $55.8 billion by 2025 (http://nnw.fm/LuR6w). Other industries such as marketing, software, packaging, energy, banking, blockchain technology and biotechnology are also taking notice and seeing opportunities in the burgeoning field as marijuana continues its transformation from a hidden, underworld product to a massive economic force.
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