Deloitte Predicts $7 Billion Cannabis Market in 2019
Momentum Public Relations
Blog: June 14 2018
If you thought that all the bargains had already been found in Canada’s nascent marijuana industry, you may just want to think again. The marijuana market still appears to have plenty of legs.
According to a story posted by the CBC on June 5, 2018, accounting firm Deloitte is predicting that Canadians will spend almost $7 Billion on legal and illegal recreational marijuana and on medical cannabis. Deloitte also expects Canadians to increase their marijuana consumption by 35% once the California Rest Cure is legalized.
On June 7, 2018 the Canadian Senate voted on the marijuana bill with numerous amendments. The House of Commons now has the choice of either signing the bill as is or sending it back to the Senate. As slow as the pace is it does appear that marijuana legislation will be passed this year if not this summer.
When that finally happens market watchers expect marijuana stocks to be jolted higher. Marijuana industry valuations have been jumping since the New Year and as far back as January stock market watch dogs have expressed doubts as to the viability of the industry’s bull run.
On January 12, Toronto Star business columnist David Olive wrote that exceptional care needs to be taken in picking marijuana stocks. Among the conditions that have the potential to bring this bull market to its knees Olive included, sky-high stock valuations that have no relationship to earnings: too much competition and the potential of political interference to derail stock prices.
On January 12, Olive noted that there were 259 publicly traded pot stocks in Canada. Olive also noted that when US attorney general commented on his government’s willingness to prosecute marijuana users, Canadian marijuana stocks retreated.
Against this background it is obvious that the market still expects the marijuana industry to become as blue chip as any industry can become in this post-blue chip modern world.
In order to gain economies of scale and secure market share the marijuana industry has been consolidating for some time. In January Edmonton-based Aurora Cannabis bought CanniMed Therapeutics for roughly $1 Billion and in May Aurora bought MedReleaf Corp. for $2.9 Billion.
If you believe that Aurora will be one of the companies dominating its industry then you have the right idea. But it could be much bigger than that. The global recreational and medical marijuana market is in play and Canadian companies stand a good chance in taking the pole position because Canada is the first G7 country to legalize marijuana. Most of the big cannabis companies in Canada have more than one ace up their sleeve and they are investing in the international market.
Aurora, for example, has won the first medical marijuana tender issued by the Italian government. It also has distribution agreements in place with Shoppers Drug Mart and the Societe des Alcools du Quebec, the Quebec provincial liquor monopoly. Canopy Growth, has operations in seven countries on four continents. Aphria Inc. has operations in more than 10 countries on five continents.
If you think the market is now too high to buy in, you may want to think again. A story published in Forbes on March 1, 2018 predicts a robust and growing legal international marijuana poised for exponential growth. Investment bank Bryan, Garnier & Co have just predicted that the global marijuana market is poised to grow by a 1,000 percent to hit US$140 billion by 2027.
At this moment the bull market looks as if it will keep running. Consider this, marijuana companies are still going public. On May 2, 2018 The Green Organic Dutchman Holdings, (TSE: TGOD) listed at $3.61 and sold 31,510,000 shares. TGOD, a licensed producer, has two farms and intends to become the largest organic producer of marijuana in the world, and Canada’s lowest cost producer, specializing in breeding new strains and seeds to meet specific therapeutic targets.
On May 29 FSD Pharma (CSE: HUGE) went public on the Canadian Stock Exchange and broke the record for the largest volume traded in a single first day of trading. As the week went on following its listing on the CSE, things only got better. In the first five consecutive days of its listing FSD Pharma traded exactly 259,230,820 Class B subordinate voting shares, the largest number of shares ever traded by a CSE listed company following listing. With news like this it’s hard to believe that the marijuana market is over.
FSD Pharma, through its wholly owned subsidiary FV Pharma, a licensed producer, intends to build the largest hydroponic cannabis greenhouse in the world in what once was the Kraft production facility in Coburg, Ontario. Currently producing in a 20,000 SF phase one operation the company intends to increase that tenfold by the end of the year.
After that, there’s more room to expand in the 620,000 SF facility that sits on 70 acres of land. FSD Pharma is debt free because of the streaming agreement it made with what now is Auxly, Canada’s first marijuana streaming company, which will finance and advise on operations in return for 49.9% of production in perpetuity.
As the Canadian marijuana industry continues to mature there will be market corrections but on the whole marijuana stocks appear to have very energetic legs.
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Marijuana Stocks Still Have Legs
Momentum Public Relations
Blog: June 1 2018
Marijuana Stocks Still Have Legs
Bryan, Garnier & Co: Global Marijuana Market to Hit US$140 Billion by 2027
Canadian Licensed Producers Expanding Abroad
The exact date when recreational marijuana will be legalized is still uncertain. The Trudeau government has repeatedly said that it will be legalized this summer. When that great day comes to pass it may be the only time in Canadian history that the government has created an economic stimulus package that actually works: the legal marijuana industry.
Not content with only being valued in the billions of dollars in Canada, our domestic marijuana industry is also hell-bent on international expansion.
On January 28, 2018 the CBC ran a story quoting Bloomberg that said there were 87 publicly listed marijuana companies on the TSXV and that collectively they were worth US$37 billion. In January Statistics Canada estimated that almost 5 million Canadians spent $5.7 billion dollars buying marijuana, with only 10% of that going to legal medical cannabis.
On May 28, 2018 Aurora Cannabis announced that it had signed a distribution agreement with German plant based pharmaceutical distributor Heinrich Klenk. Klenk distributes its products in more than 25,000 drug stores across Germany and Europe. Klenk is a trusted name and Aurora has launched a new brand that will be produced in Canada named Cannabis Klenk which the company will distribute. Medical cannabis is legal in Germany.
Aurora has been making international plans and putting them into action for some time. It owns Berlin-based Pedanios, the leading marijuana importer, exporter and distributor of medical marijuana in the European Union as well as 51% of Aurora Nordic which plans on constructing a one million square foot greenhouse in Denmark. To round out its diversified activities the company also owns two companies that specialize in building greenhouse lighting systems, BC Northern Lights and Urban Cultivator.
Aurora is not alone on the international stage, Canopy Growth, which has Snoop Dogg as a spokesman, has operations in seven countries on four continents. Aphria Inc. has operations in more than 10 countries on five continents. It recently created a joint venture, Canninvest Africa with the South African Verve Group of Companies that will see it gain an interest in Verve Dynamics, a licensed producer of medical cannabis extracts, which it believes will become one of if not the lowest cost producer in the extract field.
Driven by economies of scale and the desire to have all the pieces to the puzzle in one place the industry has been consolidating for some time. The most recent example is the merger of Aurora and MedReleaf, which has created the largest marijuana company in the world.
If you think the market is now too high to buy in, you may want to think again. A story published in Forbes on March 1, 2018 predicts a robust and growing legal international marijuana poised for exponential growth.
The story is based on a report by Arcview Market Research which predicts that by 2027 spending on legal recreational and medical marijuana will hit US$57 billion with a 67% market share for recreational marijuana and a 33% share for medical cannabis.
The lion’s share of the revenues will be generated in North America where the largest recreational market is expected to develop with sales going from US$9.2 billion in 2017 to US$47 billion in 2027.
All of which means that serious investors should start doing their due diligence on the marijuana industry now, if they haven’t already. That due diligence should also include bio-pharmas that are developing cannabis- based drugs for regulatory approval and for the over the counter market.
If you still think that marijuana stocks are overpriced you may wish to consider this, investment bank Bryan, Garnier & Co have just predicted that the global marijuana market is poised to grow by a 1,000 percent to hit US$140 billion by 2027.
One of the more interesting set of statistics put out by Statista is that in America, medical marijuana will take a larger slice of the pie than recreational marijuana. The company predicts that by 2025 cannabinoid-based pharmaceuticals will be valued at US$13.2 billion and the legal recreational market at US$10.9 billion.
Whether or not cannabinoid-based pharmaceuticals will surpass the legal recreational market is as yet unknown but predictions like the one above are a sure indication that bio-pharmas launching successful drugs will be lucrative.
A rising tide raises all ships. When Canadian recreational marijuana legalization takes place marijuana stocks are expected to jump and by association so will those pharmaceutical companies developing successful cannabinoid-based drugs.
Tetra Bio-Pharma, (TSXV: TBP) is one such company with a pipeline of cancer chronic pain, and other products under development. Its lead product, PPP 001, trademarked as RX Princeps has started Phase 3 clinical trials and stands to be the first cannabinoid therapy that will have its efficacy and safety proved.
Once that happens, PPP 001 will very likely become the first drug to be given Health Canada and American FDA approval. This achievement will be marked by a Drug Identification Number, DIN, which means that it can legally be prescribed by doctors and eligible for insurance plan coverage. TBP already has distribution agreements in place in Israel and in Europe.
The above does not and should not be taken as investment advice. Investors have the responsibility of performing their own due diligence. In the interests of transparency, Momentum PR represents Tetra Bio-Pharma.
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Canadian Companies Have Chance to Dominate Global Medical Cannabis Market.
Momentum Public Relations
Blog: March 21 2018
Tetra Bio-Pharma Receives FDA Orphan Drug Status for PPP001
Canadian Companies Have Chance to Dominate Global Medical Cannabis Market.
Grand View Research has predicted that the global medical marijuana market will reach US$55.8 billion by 2025.
When licensed medical marijuana producers first began to list on the Canadian stock exchanges they received sky high valuations.
Some analysts and producers looked beyond the domestic market and wondered if the legalization of marijuana in Canada would allow Canadian marijuana growers to take a dominant position in the global market as marijuana legalization rolled out around the world.
It now looks as if Canada stands a good chance to become a global leader in the development of cannabinoid-based drugs and the regulatory approvals that ensure their safety and efficacy.
The cannabinoid-based drug market is going to be huge. Grand View Research has predicted that the global medical marijuana market will reach US$55.8 billion by 2025.
A Bloomberg News story published in the Financial Post on December 28, 2017 explains why Canadian medical cannabis producers and drug companies are set to move onto the global stage.
The established use of medical cannabis in Canada and the legalization of recreational marijuana both play a part in this.
Canopy Growth CEO Bruce Linton was quoted in the story as saying that the theme for 2018 will be the globalization of medical cannabis. One of Canada’s first medical marijuana producers, Canopy already ships to Germany and has partnerships with companies in Australia, Spain and Jamaica.
In effect, Canada has first mover status on the international market and if domestic producers do the right things they stand a good chance of dominating the global market.
While medical cannabis is now being prescribed in a variety of jurisdictions, it is only being prescribed because of anecdotal evidence. There is no scientific proof that medical cannabis-based therapeutic treatments work. The pharmaceutical companies that succeed in providing regulatory approval backed by hard science stand to profit with a very large market share.
Canada is leading the way because while one might assume that research powerhouse the United States would be at the head of the line, American research is hamstrung by the fact that while legal in many states, it is not legal at the American federal level. This means that federal research funding is not available.
Against that backdrop Canadian biopharmaceutical research and development company Tetra Bio-Pharma, dedicated to becoming the first to prove the safety and efficacy of cannabis-based drugs, has received funding from the National Science and Research Council of Canada.
The company has already started a Phase 3 clinical study designed to prove the safety and efficacy of its flagship product, smokable PPP001, designed as a therapeutic treatment for chronic and cancer pain. The company believes that PPP001 will be on the market no later than 2019.
Canada’s ability to lead the international pack when it comes to the development of cannabis-based therapeutic drugs can be illustrated by two recent developments.
On March 14, 2018 Tetra Bio-Pharma announced that it had received “Orphan Drug Status” for PPP001, for the treatment of Complex Regional Pain Syndrome by the American FDA.
Orphan drug status is a designation used to encourage research into drugs for the treatment of rare diseases that affect only a small percentage of the population, 200,000. It provides a seven year marketing exclusivity for the orphan drug.
Tetra Bio-Pharma is a biopharmaceutical company dedicated to providing the science that will prove that medical cannabis-based drugs are safe and actually work.
Unless a dark horse dramatically emerges, Tetra Bio-Pharma will also be the first biopharmaceutical to be granted Health Canada and FDA approvals, which in return will grant the approved drugs a Drug Identification Number, DIN. DIN numbers allow the drug to be prescribed by doctors, sold by pharmacies and covered by insurance plans.
DIN numbers are the Holy Grail in pharmaceutical research. Once you have them your products are legal to market. Without a DIN number they can’t be sold.
Tetra has a pipeline of cannabis-based drugs under development and has recently created a veterinary division to create cannabis-based drugs for the lucrative cat and dog market.
The company has also just announced its first European foray with partner PS Innovations. PS Innovations manufactures Tetra’s trademarked RX Princeps Inhalation Device. Tetra announced on March 6, 2018 that PS Innovations will apply for CE Marking, a process that guaranties the product conforms to European regulations and can be sold in the European Economic Area where it will be listed as a Class 1 Medical Device.
Another indication that Canada stands a good chance of leading the medical cannabis world is the recent agreement between Sandoz Canada and licensed medical marijuana producer Tilray Inc. On March 19, 2018, Tilray announced that it had formed an exclusive partnership with Sandoz Canada to develop non-smokable cannabis-based therapeutic drugs delivered through gel caps or lotions.
Sandoz is owned by Novatis and the agreement represents big pharma’s first venture into developing cannabinoid-based therapeutic treatments.
Pascal Biosciences discovered certain cannabinoids that help our immune system kill tumor cells.
Canopy Growth also has a medical division that holds a number of patents. If Canada can develop the momentum that comes with first mover status there is a good chance that it can dominate the global medical cannabis market.
- Published in Blog