FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Blueberries Announces Cannabis Sales and Distribution Agreement for German Market.”
Blueberries Medical Corp. (CSE: BBM) (OTCQB: BBRRF) (FRA: 1OA) (the “Company” or “Blueberries“), a leading Latin American licensed producer of medicinal cannabis and cannabis-derived products, is pleased to announce that it has entered into a letter agreement (the “Letter Agreement“) to become a strategic supplier of medical cannabis products to Canurius UG (“Canurius”), for the sale and distribution of cannabis products in Germany with the potential for expansion into Austria, Switzerland and the Netherlands. Pursuant to the terms of the Letter Agreement, Blueberries will provide Canurius with approximately 100 litres (100 kg) of cannabis oil extract per month for an initial 12-month term. The completion of the transaction is subject to and conditional upon satisfactory legal and financial due diligence and the execution of a definitive agreement.
Blueberries Medical is seeking to become a large-scale producer of naturally grown premium-quality cannabis with its primary operations well situated in the Bogota savanna in central Colombia. Lead by a specialized team with proprietary expertise in agriculture, genetics, extraction, medicine, pharmacology, and marketing, Blueberries has received all licenses required for the cultivation, production, domestic distribution and international export of cannabidiol (CBD) and tetrahydrocannabinol-based (THC) medical cannabis.
The cannabis market has strategically integrated into major markets worldwide. Primarily, most countries are moving towards adopting cannabis for medicinal applications. However, there are a handful of countries that have either decriminalized or legalized its recreational use as well. While medical cannabis is much more widely accessible and available, the recreational market is growing at a much more rapid pace, largely due to the North American region. Currently, the medical cannabis sector accounts for the majority of the market share, but as the U.S. and Canadian market continue to mature, the recreational sector is expected to prevail. The cannabis market is still relatively new, meaning that some companies aren’t fully efficient and operating at maximum capacity. For instance, Canada recently legalized cannabis entirely in late 2018 but despite fully legalizing the plant, the Canadian government has imposed strict restrictions on cannabis-related operations. In this case, cultivators are limited in how many cannabis plants they can grow in their facilities and retailers in certain provinces even face curtailed hours, which significantly impacts their financials as well. As a result, newer markets tend to have higher prices for products, whereas U.S. states that have adopted cannabis legislation early have significantly lower prices per package or price per gram. As of 2019, Colorado’s average price across all product segments was approximately USD 23.95, while Washington’s average price was USD 15.33, according to Leafly. On the other hand, California and Nevada adopted recreational legislation nearly four years after Colorado and Washington and California’s average price across all products segment is approximately USD 30.90, while Nevada’s average price is USD 26.94. As legalization continues to spread, regions that have adopted cannabis, as well as companies, are maturing, leading to a decline in prices. These declining prices, in turn, make cannabis-based products much more affordable for new consumers to try, thus leading to a growing user base. According to data compiled by GlobalInfoResearch, the global legal marijuana was valued at USD 7.97 Billion in 2019. By 2024, the market is expected to reach USD 35 Billion while registering a CAGR of 28% over the next five years.
While Washington has the cheapest average price in the U.S., that was not the case when the state first adopted recreational cannabis. According to Headset data, a gram of cannabis flower costs approximately USD 4.90 in Washington. During the early stages, a gram of flower cost nearly USD 30 in Washington. Headset’s report highlighted that the entry of thousands of distinct brands as well as vertical integration allowed companies to reduce their prices. Moreover, the thousands of players within the marketspace also created a less hotly contested landscape. The price of cannabis is determined by various factors such as taxes, availability, competition, and most importantly, cultivation costs. Typically, the cultivation cost in North America is steep, which results in a more expensive product. As a result, U.S. and Canadian cannabis-based companies have begun to establish operations in the Latin American region in an effort to offset costs. In particular, large markets such as Argentina, Brazil, Colombia, and Peru are highly attractive. These specific countries have a large medical cannabis user base, but notably, cultivation costs are significantly cheaper. Many companies are specifically targeting Colombia because the country offers favorable growing conditions, allowing companies to cultivate high quality and natural cannabis at a fraction of the cost compared to North America. “The legalization and use of cannabis is becoming more and more popular not only in North America and Europe, but in Latin American countries as well. Investment is flowing into the region as it positions itself to be a leading supplier of the world’s cannabis market,” said BizLatin Hub. “With stable legal frameworks supporting cannabis production processes, Latin America is expected to become a dominant supplying region of cannabis extracts and derivatives to the global market in the coming years.”
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