FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Pioneer Cannabis, a Collaboration Between WeedMD and Pita Pit Canada, Signs with Ontario Cannabis Retail Operator.”
Pioneer Cannabis Corp. (“Pioneer Cannabis”), a national cannabis retail service provider, is pleased to announce it has signed a Master Cannabis Retail and Licensing Agreement (“Licensing Agreement”) with Ontario cannabis retail lottery winner Guruveer Sangha who will be the owner and operator of the first Pioneer Cannabis retail store located at 1200 Brant Street in Burlington, Ontario. Pioneer Cannabis is a collaboration between WeedMD Inc. (TSX-V: WMD) (OTCQX: WDDMF) (FSE: 4WE) (“WeedMD”), a federally-licensed producer and distributor of medical-grade cannabis, and Pita Pit Canada (“Pita Pit”), a privately-owned Canadian fast casual franchise eatery with over 225 stores in Canada.
WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer and distributor of cannabis products for both the medical and adult-use markets. The Company owns and operates two facilities: a 26,000 sq. ft. indoor facility in Aylmer, Ontario and a 158-acre state-of-the-art greenhouse and outdoor facility located in Strathroy, Ontario. The Company currently has 136,000 square feet of licensed production space across its facilities and is expected to have a total footprint of more than 550,000 square feet of indoor and greenhouse production in addition to more than 25 acres of outdoor cultivation space online in the first half of 2019. WeedMD has a multi-channeled distribution strategy that includes selling directly to medical patients, strategic relationships across the seniors’ market and supply agreements with Shoppers Drug Mart as well as six provincial distribution agencies.
Canadian cannabis companies have recently begun launching operations within the U.S. due to the attractive growth opportunity the country presents. In particular, states that have legalized recreational use, such as California, Colorado, Nevada, and Washington, have become popular regions. Furthermore, as they expand operations around the country, cannabis-based companies are also looking to list either on the New York Stock Exchange or the Nasdaq Exchange, the two largest exchanges in the world. As legalization efforts continue to ramp up, more and more companies are listing or uplisting onto these major exchanges. The explosive growth of the cannabis marketplace has allowed the industry to become a trending topic among investors and analysts alike. As such, investment banks such as Piper Jaffray, RBC Capitals, and Cowen have backed the industry by covering publicly traded cannabis-based companies. For example, RBC Capitals analyst Nik Modi believes that cannabis is the next up and coming global industry. Modi expects the legal U.S. cannabis market to grow at a CAGR of 17% and reach as much as USD 47 Billion within the next decade. Globally, the medical cannabis sector accounts for the majority of the overall market share, however, Modi suggests that the industry will continue to grow due largely to the recreational sector. The only countries that have fully legalized cannabis are Canada and Uruguay, however, a handful of countries maintain lenient regulations regarding personal consumption. Despite Canada and Uruguay both having legalized cannabis entirely, the U.S. is still the biggest market driver. Although the U.S. has only 10 states and the District of Columbia that have legalized cannabis, the U.S. alone is positioning the industry to become the next disruptive market.
Modi focuses on two key aspects of the recreational sector; the analyst suggests that the growing prevalence of cannabis concentrates and edibles will significantly accelerate the sector. The two segments are already seeing large investments pour in from various public sectors. For instance, beverage and tobacco producers have invested in the cannabis marketspace in order to offset their declining revenues as many of those players in their respective industries believe that cannabis is the next major market. Specifically, those companies are either integrating cannabis into their business operations or simply holding a stake within a cannabis company. Moreover, the cannabis marketspace could see other sectors get involved as well. The evolution of cannabis has completely changed from decades ago, when it was most commonly smoked. Nowadays, consumers are enjoying cannabis in a variety of ways such as vapes, oils, tinctures, and creams. The development of the cannabis industry could lead other industries, such as the health and wellness sector, to explore the cannabis marketplace. “Driving the growth is recreational use of the product, particularly concentrates and edibles. Estimates already suggest that the US category alone is USD 50 Billion, which compares to spirits USD 58 Billion, wine USD 65 Billion, and beer USD 117 Billion,” said Modi, “We think this is exactly the type of move that more companies should be making (not in cannabis necessarily, but having the foresight to invest in future revenue streams, especially at a time when the core business is performing),” Modi said.
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