The cannabis industry is the most rapidly developing and evolving industry’s in the world and staying on top of this market is not as easy as it sounds.
As the summer season comes to a close, many investors are looking for new opportunities and we want to highlight three developments to watch.
While we find these developments to be significant, we believe that investors need to take a deep look at the potential opportunities before diving in.
Cronos: A Story to Watch as Shares Trend Higher
The last few weeks have been busy for Cronos Group (MJN.V) (PRMCF) and we are favorable on these recent developments. The market has also been favorable on these announcements as the shares have rallied more than 15% off its August lows.
On Friday, Cronos announced that one of its wholly-owned licensed producers, Peace Naturals Project entered a supply agreement with Germany-based Cannamedical Pharma GmbH, a pharmaceutical and narcotics wholesaler that is federally licensed for narcotics import.
As of September, Cannamedical is Europe’s fastest growing cannabis retailer with a network of 781 pharmacies (expected to reach 2,500 by year end). Although Cannamedical has been actively selling cannabis products throughout 2017, the agreement will help with the ongoing German medical cannabis shortage.
Next month, Cannamedical expects Peace to export one of the single largest shipments of medical cannabis in the European Union’s history. On September 13th to 15th, Peace products will be formally introduced at the Expopharm exhibition in Dusseldorf.
Cronos has been focused on the international opportunity and only a few days before the German supply agreement was reporterd, the licensed marijuana producer announced that Peace completed its first shipment of medical cannabis oil to the Cayman Islands. This was a milestone for Cronos as it represented the company’s first exported extract based product.
Organigram: Expands Cannabis Oil Product Line
Although many Canadian licensed medical marijuana producers have been trending higher, some have not. After Organigram Holdings (OGI.V) (OGRMF) released its first quarter financial results, the shares have been trending lower and we continue to monitor this weakness.
Last week, Organigram reported to have expanded its cannabis oil product line and introduced a pure CBD edible oil called Shubie. This pure CBD product is a first for Organigram and complements the company’s existing line of medical cannabis oil products.
Shubie is an ethanol-extracted cannabis oil formulated in an organic sunflower oil base. The 50ml formulation contains some THC but has 23.7 mg/ml CBD and Organigram will offer Shubie to its registered patients for $129 CDN.
Marapharm: Deal for its License Application is Terminated
In early June, Marapharm Ventures Inc. (MDM.CN) (MRPHF) made a splash when it announced a letter of intent with Standard Graphite Corporation (SGH.V) to sell its ACMPR medical cannabis license application, and all associated property, plans, and intellectual property for approx. $8 million.
We were not surprised by this decision since Marapharm applied to become a licensed medical marijuana producer about three years ago and seemed to be focused on the legal marijuana market in Nevada and California.
On Friday, Marapharm announced that this deal was off the table and the parties mutually agreed to terminate the agreement. Marapharm CEO Linda Sampson said the company plans to pursue the ACMPR application and intends to maximize the value for shareholders.
Right before this announcement was made by Marapharm, Standard Graphite entered a share purchase agreement to acquire Medi-Can Health Solutions. This is an interesting twist since Medi-Can is also a cannabis production license applicant under Health Canada’s ACMPR.
Although we are favorable on Marapharm’s leverage to two major marijuana markets in the United States, the market’s attraction to Marapharm has been fading. The shares have fallen approx. 30% from its July highs and we will keep an eye on how this story progresses.
Source: Technical 420