5 Canadian Cannabis Headlines Investors Need To Know

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Last week was a busy week for the Canadian cannabis industry and we do not expect this trend to end anytime soon.

Earnings season is starting to heat up and earlier this morning, leading marijuana producer Organigram Holdings (OGI.V) (OGRMF) reported strong first quarter earnings. Over the coming month, we expect to see other Canadian licensed producers report strong earnings numbers and will monitor this trend closely.

Today, we have highlighted 5 top important company developments reported last week and will monitor how these stocks continue to trade this week. 

Invictus Completes Sale to Canopy Growth

On Friday, Invictus MD (IMH.V) (IVITF) traded 5% higher after announcing the sale of 120 kilograms of dried flower from AB Labs to Canopy Growth (WEED.TO) (TWMJF), putting Invictus MD's license holders on track for achieving 26,000 kg run-rate production capacity for 2018 with net capacity of 22,150 kilograms to Invictus MD. AB Labs’ products will be used in Canopy’s curated CraftGrow line on Tweed Main Street's online store.

Invictus also signed the definitive agreement to make its further strategic investment in AB Labs, from its current 33.3% ownership interest to 50%. The finalization of the definitive agreement marks an important milestone for Invictus MD as Canada moves within six months of the expected full adult-use legalization of cannabis. Earlier this month, AB Labs received the amendment to sell dried marijuana under the ACMPR.

The terms of the definitive agreement include a $10 million direct cash investment in AB Labs to be used for the expansion of the existing facility, the acquisition of the land and building at the existing facility from the landlord, and for the acquisition of an adjacent land and building including retrofitting costs towards the existing building on the adjacent property (for a combined production space of approximately 56,000 square feet). Invictus MD will make a $2 million line of credit available to AB Labs if costs come in higher than expected.

Invictus MD also expects its 100% owned subsidiary Acreage Pharms Ltd. to receive its sales license in the first quarter of 2018 as it has already harvested multiple successful crops and product has already been tested. The submission of another license application to Health Canada by AB Ventures Ltd. and AB Ventures' development permit on the 100 acres of land for the initial Phase 1 construction that is fully funded, signals another key milestone as Invictus MD continues to build out significant kilogram capacity for the expected domestic and international demand.

Namaste and Supreme Sign Definitive Supply Agreement

Last week, Namaste Technologies’ (N.CN) (NXTTF) wholly-owned subsidiary, Cannmart, and Supreme’s (FIRE.V) (SPRWF) wholly-owned subsidiary, 7ACRES, signed a definitive supply agreement, whereby Namaste has committed to purchase 1,000 kilograms of premium quality medial cannabis from 7ACRES at $6,000 each in 2018.

The supply agreement will commence on the date that Cannmart becomes a licensed producer under the ACMPR. This agreement represents a significant milestone for Namaste, as its first commitment to a volume purchase of medical cannabis.

This is a significant development for both Canadian cannabis companies and we are favorable on the relationship between the two businesses. We think there are significant opportunities for synergies between Supreme and Namaste and will monitor how the relationship continues to evolve.

ICC Labs: Granted Two Licenses in Colombia

Last week, ICC Labs (ICC.V) (ICCLF) traded higher after being granted a license for the cultivation of non-psychoactive cannabis plants and a license for the use of seeds for planting from the Ministry of Justice and Law of the Republic of Colombia. ICC now has cannabis production licenses in two low-cost Latin America locations and is positioned to produce pharmaceutical-grade medicinal cannabinoid extracts for export worldwide.

One license lets ICC cultivate non-psychoactive cannabis plants to produce various medicinal cannabis-based products for domestic and international distribution. The second license permits ICC Labs to obtain cannabis seeds under the Colombian regulatory regime and use such seeds for its operations. Each license is valid for five years and are renewable upon request within three months' of expiration.

ICC Labs expects to commence licensed outdoor planting of non-psychoactive cannabis seeds on 250 acres secured for this purpose. The company believes that it obtained an excellent location for its Colombian operations and notes that the weather conditions are optimal for year-round outdoor production. ICC also expects to increase its Colombian acreage according to global demand for its products, as its current Colombian licenses do not have any production limitations. Colombia has a population of 50 million citizens and is located near México, one of the markets where ICC Labs has already taken steps to commence sales.

Aurora: Update on CanniMed and International Markets

Last week was quite busy for Aurora Cannabis Inc. (ACB.TO) (ACBFF) and we are favorable on the recent developments, especially the acquisition of CanniMed Therapeutics (CMED.TO) (CMMDF). Although we found this acquisition to be significant, we want to highlight Aurora’s update on international activities.

Denmark: Acceleration to Market

  • Further to Aurora's January 4th press release, the company's Aurora Nordic joint venture will be accelerating its time to market in Denmark with the retrofit of an existing 100,000 square foot greenhouse in Odense, Denmark owned by Alfred Pedersen & Søn. Subject to licensing by Denmark's Medicines Agency, this will enable Aurora Nordic to start cultivating cannabis during the summer of 2018, while the company is constructing its new purpose-built high-technology 1,000,000 square foot production facility.

Italy: First Tender

  • Further to Aurora's January 18th press release, Aurora announced that the amount of product for the first tender consists of three lots with different cannabinoid profiles, totaling 100 kilograms. Further orders by the Italian Ministry of Defense will be subject to additional tender processes, in which Aurora and Pedanios will continue to participate. While the first tender was set at 100 kilograms, the Italian Ministry of Defense has the option to increase the amount requested.
  • This is Aurora's first step into supplying the tightly restricted Italian market, and provides Aurora with a first mover advantage. Prior to the new tender process, medical cannabis in Italy has been supplied through two sources: the Ministry of Defense, and seven distributors licensed to procure medical cannabis from the Ministry of Defense, or source internationally from the Dutch Office of Medicinal Cannabis. No import licenses from other sources into the Italian market have been granted to date.

Germany: Rapid Market Growth

  • From March 2017 to end of November 2017, approximately 13,000 people applied for reimbursement of their medical cannabis prescription, with a 65% approval rate. Insurance company AOK Versicherung, which represents approx. 50% of all insured people in Germany, published that in December, approx. 7,500 people applied for reimbursement, which implies a national figure of 15,000 for all of Germany in December.
  • To date, Pedanios remains the EU's largest distributor of cannabis by volume of product sold, has completed deliveries to over 2,200 pharmacies, and continues to build market share rapidly. Pedanios remains the only distributor to offer cannabis flower sourced from both Canada and the Netherlands, and offers 11 of the 15 licensed varieties in Germany.

Australia: Import/Export Permit Granted

  • Cann Group (CNGGF) was granted a license to import and/or export cannabis genetics and medicinal cannabis products by the Australian government's Department of Health, through the Office of Drug Control. The license enables Cann Group to import genetics from Aurora to help broaden the company`s portfolio of medical cannabis products, pending Aurora's receipt of an export permit from Health Canada.

Isodiol Improves Offering via a Licensing Agreement with Livecare

Last week, Isodiol International Inc. (ISOL.CN) (ISOLF) continued to trade sideways and we are monitoring how the shares trade after the signing of a licensing agreement with Livecare Health Canada on Friday.

Livecare is a Vancouver-based company committed to empowering health care through technology by providing patients access to quality, real-time healthcare, regardless of location. The company offers digital technologies that connect Doctors & Allied Health Care Providers to their Patients via secure, encrypted, face-to-face video and messaging.

Under the terms of the licensing agreement, Isodiol will license the Telehealth platform and operate it under a white label in connection with the marketing of all its products.The license shall grant Isodiol the exclusive right to use the platform relating to all cannabis, cannabis-derived, cannabinoid and phytoceutical products and related services. Livecare will customize and convey the platform for Isodiol and will assist in marketing and commercializing the platform on a global scale.

We are monitoring trading activity and will keep an eye on how Isodiol continues to trade. Although Isodiol continues to execute, the share have been under pressure during the last month. This is a stock that investors need to keep an eye on. 

Disclosure: This report was authored by and is property of Technical420.All information and data relied upon in drafting this report is publicly available.The author believes and considers its ...

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