FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “WeedMD Secures Health Canada Standard Processing Licence for its State-of-the-Art Strathroy Facility” and “WeedMD Acquires 60 Acres of Neighbouring Land to Expand its Outdoor Cannabis Footprint”.
WeedMD Inc. (TSX-V: WMD) (OTCQX: WDDMF) (FSE: 4WE) (“WeedMD” or the “Company”), a federally-licensed producer and distributor of medical-grade cannabis, is pleased to announce it has received a Health Canada Standard Processing Licence (“Processing Licence”) for its 158-acre Strathroy facility. This marks an important step in the Company’s ability to scale up production, packaging and distribution of cannabis products from its large scale production site.
WeedMD Inc. announced it has closed on the purchase of an additional 60 acres of prime land located directly adjacent to its 98-acre Strathroy property. WeedMD’s outdoor grow now has the potential to increase to more than 100 acres. As previously announced, the Company has applied to Health Canada for an amendment to its Strathroy licence to expand beyond its greenhouse cultivation with an initial 25-acre, low-cost, outdoor grow operation in 2019. Link to release here. An additional 25 acres had previously been planned to come online as Phase II in 2020. With today’s announcement, Phase II will increase to 75 acres for an overall outdoor cultivation of 100 acres online by 2020.
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 operates two facilities: a 26,000 sq. ft. indoor facility in Aylmer, Ontario and a state-of-the-art greenhouse and outdoor facility located in Strathroy, Ontario.
Canada moved to legalize cannabis entirely in late 2018, however, cannabis-based companies remain more attracted to the U.S. market. The U.S. has not moved to legalize cannabis federally, instead, states are given the jurisdiction to legalize cannabis for either medical or recreational use. So far, more than half of the U.S. has adopted medicinal cannabis use, while 10 states and the District of Columbia have legalized recreational use as well. Despite not having legalized cannabis entirely, the U.S. market is one of the most attractive marketplaces for cannabis companies and investors. Many of these Canadian-based cannabis companies are beginning to establish operations in the U.S., particularly in large markets such as California, Colorado, and Nevada. On the other hand, some are moving towards emerging markets such as Massachusetts, Michigan, and Oregon. According to data by Bloomberg, most U.S.-focused cannabis companies generated higher gross margins than their Canadian counterparts in the most recent quarter. However, Canadian cannabis companies trying developing operations in the U.S. are often held back by regulatory matters. Pending future clinical trials and studies, more countries are expected to adopt cannabis laws, thus restructuring cannabis regulatory laws both domestically and abroad. According to data compiled by Grand View Research, the global legal marijuana market is expected to reach USD 146.4 Billion by the end of 2025, exhibiting a CAGR of 34.6%.
Despite the U.S. representing vast growth opportunities, cannabis companies are still expanding their operations in Canada. According to Arcview Market Research and BDS Analytics, Canada reported legal cannabis sales in the range of USD 755 Million to USD 1.6 Billion. Furthermore, the research suggests that the Canadian legal market is expected to reach USD 7.8 Billion by 2022. The Canadian market is even expected to become the largest marketplace, overtaking California in the process. In 2017, California delivered over a billion dollars in cannabis revenue alone, which made it one of the biggest industry market drivers. As the Canadian market continues to develop, it is projected to witness more consumers than California, as the report noted that in 2018, adults who consumed cannabis in Canada grew by 21% to 25% total. Moving forward, the U.S. and Canada are expected to be the biggest market drivers for the global cannabis industry. Moreover, as the two nations continue to deliver explosive cannabis sales, it could potentially influence other countries to consider legalization. “Predicting the future of cannabis isn’t the easiest thing to do, but there are certain things that we know for a fact will happen/change,” said Arnaud Dumas de Rauly, Co-Chief Executive Officer of The Blinc Group. “The first being that Cannabis will come off Schedule 1. The majority of the industry doesn’t think this will happen within the current administration but we believe it will happen sooner than later. This will lead to a more mainstream approach to compliance and the involvement of organizations like the FDA, if they are given a mandate. Then will come a regulatory framework and we’ll be confronted with inconsistencies regarding state-level and federal regulations.”
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