FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Pasha Brands Acquires Health Canada Approved Processor and Cultivator.”
Pasha Brands Ltd. (CSE: CRFT), one of Canada’s largest craft cannabis brands organization, is announcing that it has acquired Medcann Health Products Ltd. (“Medcann”), a fully licensed, Health Canada approved facility to process, cultivate and sell medical cannabis under the Cannabis Act regulations. Prior to its acquisition by Broome Capital Inc., the privately held Pasha Brands Ltd. had previously entered into a letter of intent to acquire Medcann, dated effective April 30, 2019.
Based in Vancouver, British Columbia, Pasha Brands is a vertically integrated organization that is firmly rooted in BC’s craft cannabis industry, which boasts an international reputation. With proven capabilities in cannabis cultivation, genetic research and development, product, processing, and retail, Pasha is uniquely positioned in the new legal cannabis market through its network of hundreds of craft cannabis suppliers under the Pasha umbrella.
Pasha’s subsidiary, BC Craft Supply Co. Ltd., is developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft Supply Co. Ltd. is driven to assist craft growers in obtaining security clearance and licensing to grow as micro-cultivators, specializing in education and compliance to bring growers into the regulated cannabis supply market.
As the Canadian cannabis market continues to mature, the consumer market is expected to witness a proliferation of edibles and other alternative cannabis-based products. Alternative products have become increasingly popular over recent years as consumers continue to stray away from traditional flower. Now shoppers are opting towards products such as concentrates and extracts, which are considered much more potent and cleaner when compared to smoking flower. Emerging products are expected to deliver annual revenue of more than CAD 2.5 Billion and generate higher profits for retailers than cannabis products that are already legal, according to Deloitte’s annual cannabis industry report. In addition to new products, Deloitte mentions other growth drivers such as the introduction of the alcohol and tobacco industry, mergers and acquisitions, and the entry of pharmaceutical companies. However, Deloitte is also forecasting that edibles are expected to be the primary growth driver for the overall Canadian market, as edible and alternative cannabis-based products are expected to account for CAD 1.6 Billion of the total CAD 2.5 Billion marketplace. Infused beverages (CAD 529 Million), topicals (CAD 174 Million), concentrates (CAD 140 Million, tinctures (CAD 116 Million), and capsules (114 Million) also make it on the list. In combination, the global market for alternative products is expected to double over the next five years, reaching USD 194 Billion. And while the U.S. marketplace accounts for a majority of the global market share, Deloitte highlights that Canada is better positioned than the U.S. The firm notes that Canadian-based cannabis companies receive significant advantages over its global counterparts, such as government support, access to capital markets and the banking system, as well as a unified market. As a result, the U.S. is expected to see its market share dwindle as more global players enter into the cannabis industry. Nonetheless, the U.S. market is still expected to thrive, especially after the passage of the U.S. Farm Bill last year.
Canada legalized cannabis entirely back in October 2018, however, due to regulations, many aspects of the industry remain in a grey area. Certain Canadian provinces such as Ottawa are on the verge of finalizing their regulations as the market gears up for the legalization of edibles and other cannabis alternatives. While Health Canada has not released any comments on the matter, the federal government did mention that the legalization of edibles, extracts, and topicals is expected to become law “no later than October 17th, 2019.” Once the legislation arrives later this year, Deloitte expects the entry of consumers who have never previously used cannabis products before. Additionally, the firm expects an increase in users among the older age groups as well as females. Each demographic group has its own demands and what they are looking for. For instance, the older generation may be looking for more potent medicinal cannabis, while the younger demographic is more inclined towards its recreational use. The potency and effectiveness of the products directly stem from how the cannabis plant is grown. There are various environmental impacts that can determine the yield and potency of the plant and the most important aspects of growing are lights, temperature, air circulation, and humidity. If the harvest time is shortened or the lights are too bright, it can result in a bad strain that lacks potency and taste. In order to produce the ideal cannabis bud, some cultivators have begun to tend for each individual plant with specialized care, now commonly known as “craft cannabis.” Cultivators focused on the artisan profession of craft cannabis grow without using any artificial byproducts and solely use natural resources. While paying attention to each individual plant may diminish the overall yield, the end result produces premium and high-quality cannabis buds. “I completely agree that passion, care and attention to every detail is required to produce superior-quality cannabis with rich cannabinoid and terpene profiles. There cannot be compromises to nutrient-source quality, environmental control nor labor practices,” said Kenneth Morrow, Founder of Trichome Technologies. “I firmly believe those who produce the best cannabis, regardless of scale, will always have customers, and those who do it ethically and sustainably possess even more strategic advantages. Customers and their specific tastes will decide the success or failure of a company based on its quality, price and behavior.”
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