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Will McKesson Make Maricann Canada’s Next Unicorn Stock?




Now you can add McKesson to the list of major corporations taking a stake in the legitimate marijuana industry with a recent deal to partner with medical marijuana grower Maricann (CNQ:MARI).

Suddenly, the formerly quiet grower that didn’t even have a stock market listing until this April is becoming the most talked about company in Canada’s medical marijuana universe.

The McKesson deal is just one of the major events pushing it into the spotlight, but it’s the one that has immediate upside potential.

McKesson, with $199 billion in annual sales, is the largest pharmaceutical distributor in the US and Canada. Its McKesson Canada division controls about 20% of Canada’s pharmacies. Ultimately the Maricann deal, which was announced quietly in August, will make Maricann the exclusive grower to supply medical marijuana products in McKesson’s five retail pharmacy chains.

Maricann Prepares to Take a Big Slice of the Market

Dundee Capital predicts that Canada’s medical marijuana sales will reach $3 billion by 2024.

Maricann is already selling direct to patients. That was a $4 million business last year, when the company first got approval from Health Canada. The company projects sales at $23 billion business next year (2018).

Now, with the McKesson venture, Maricann is preparing to sell product through regular pharmacies as well. This is likely to attract patients who prefer to buy medical marijuana near where they live, just as they do with their other medical supplies. With the two strong distribution channels at its command, you can see why Maricann stands ready to take a sizeable slice of Canada’s medical marijuana market.

The McKesson deal wasn’t the only startling news lately.

This fall, Canaccord Genuity named Maricann as its “Top Pick” among marijuana stocks

In the young marijuana business, a Canaccord blessing is like having angels proclaim its greatness. Canaccord is one of the three most influential investment banks in Canada’s marijuana industry. Its in-depth industry reports are widely read and followed. In the past, Canaccord has thrown its weight behind companies like Canopy Growth, Aurora Cannabis and Aphria—all of which have reached “unicorn” status, as companies with $1 billion or higher market caps.

That the Cannacord “Top Pick” rating came before news of the McKesson deal should give you an idea how strongly industry insider feel about Maricann’s outlook.

The real hint that Maricann was about to join the big leagues, though, came in June.  That was when MJIC added Maricann to both the North American Marijuana Index (35 public companies) and the Canadian Marijuana Index (18 companies). That’s very high profile.

And all this was hardly digested before news broke the next bombshell….

Maricann Is Fast approaching a 10X Canadian Expansion  

Maricann is definitely taking its place among the big growers already.

At present, it is operating from a 46,000 sq. ft. facility in Langton, Ontario that can produce about 2,200 kg of marijuana per year. But this is increasing rapidly.

Maricann is another 800,000 sq. ft. of growing space at that site. At full expansion, the Langton facility will be capable of producing 100,000 kg of marijuana.

The first phase of this expansion should be completed this winter.  That means that within six months, Maricann will be capable of adding another 25,000 kg to its annual production—about 10X what it’s growing now.

All systems are go. On Nov. 8, Health Canada lifted Maricann’s growing limitations at the Ontario operation and the new Maricann license increases its permitted capacity to 6,250,000 grams of marijuana on site at any one time.

This upgrade presents a 480% increase in production capacity for Maricann—above the full extent of the expansion that is currently being built, that is.

Germany Is Maricann’s Differentiator

Maricann stands out from the pack on several counts, but none more than its foray into the European markets.

In Germany, MARI has an option to buy an existing facility near Dresden that it will  convert to an indoor grow house. It’s a huge space—a 1.5 million sq. foot building in excellent condition that was formerly a Cargill meat packing plant.

The new German facility is almost twice as large as the Ontario expansion plans, and it should be ready to use within months.  If Maricann can achieve the same yields per square foot it is getting in Canada, the German operation could add another 47,000 kg to annual production–more than 20X what MARI produced last year.

Germany only recently approved medical marijuana, but there were no German companies ready to produce. Maricann, with its experience will likely be the first approved company to produce medical marijuana in Germany. This is a lead it’s likely to keep, too, because Germany only plans to issue 11 growing licenses. One of them will certainly have Maricann’s name on it.

Maricann Competes Hard on Cost, Too

As it builds out its added capacity, Maricann is perfecting its growing system so that it will be able to position itself as one of Canada’s lowest-cost producers. The company expects it will be able to produce high-grade medical marijuana at just  $1.34 per gram ($38 per ounce).

Even as medical marijuana prices fall, Maricann will easily remain profitable and very capable of undercutting most, if not all, its competitors.


Looking Ahead… A New Drug, More Growth, Enormous Value

The McKesson deal, Cannacord’s blessing, approval for more production…. All that should be more than enough to interest any investor, but the news just keeps coming.

In August, Maricann agreed to acquire NanoLeaf Technologies, a biotech that holds a number of licenses for pharmaceuticals and cosmetics. What that brings to MARI is the potential to market the first ever marijuana in a gel cap with verified standard dosages.

Nobody else has that. Maricann expects that the gel caps will be ideal for medical delivery of cannabis oils, which it produces at its Ontario facility.

But perhaps the most compelling reason for investors to load up on Maricann is that this well-financed, strongly growing company is also deeply undervalued. Based on revenues, it is selling at a 50%-60% discount to its marijuana industry peers.  On earnings to economic value basis, it’s at a 47% discount.

Cheap stock, strong growth, and industry respect—there’s a lot to love about Maricann.

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Canopy Rivers Inc. (OTCMKTS:CNPOF) Portfolio Company TerrAscend Corp (OTCMKTS:TRSSF) To Acquire State Flower Brand



Canopy Rivers Inc. (OTCMKTS: CNPOF) has announced that portfolio company TerrAscend Corp (OTCMKTS: TRSSF) has entered a definitive agreement to buy ABI SF, LLC a cannabis cultivation facility operators that own the State Flower brand.

Acquisition of State Flower

According to the terms of the agreement, initially, TerrAscend will acquire 49.9% of State Flower equity for around $2.85 million from the conversion of a previously issued convertible debenture. The company has also extended a $3.75 million line of credit to State Flower for enhancing improvements in the facility aimed at boosting its capacity. TerrAscend will acquire the rest of the 50.1% within a predetermined 12-month period based on future revenue.

Canopy Rivers, CEO, and President, Narbe Alexandrian stated that the acquisition demonstrates how TerrAscend is delivering its expansion plans. This offers more exposure in the US for Canopy Rivers and TerrAscend shareholders. The CEO added that the acquisition of State Flower would enable TerrAscend to seize a significant foothold in the US as a result of its solid consumer-facing brand. Alexandrian further said that with the retail foothold in the US already secured vial Apothecarium, the acquisition of State Flower would be a natural strategic fit for the company.

State Flower produces Ultra-premium cannabis

State Flower is popular for its high-quality cannabis flower currently sold through dispensaries in Nevada and California including Apothecarium. It operates a licensed facility in San Francisco California. It has emphasized a craft approach in its cultivation through the best-in-class genetics at the Envirocann certified facility. Evirocann certification confirms that bets management practices are in place in growing and processing of cannabis. It also ensures environmental stewardship as well as compliance with state and local regulations.

State Flower President, Daniel Wacks stated that through their work with TerrAscend and Apothecarium they have established a great cultural and strategic fit. He added that the company was proud of its achievements and were glad to have found a partner who believes in their team. Wacks said that they are looking forward to the partnership to create the best-in-class growing capabilities in all locations where TerrAscend operates.

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Auxly Cannabis Group Inc. (OTCMKTS:CBWTF) Subsidiary KGK Science Receives Cannabis Research Licence



Auxly Cannabis Group Inc. (OTCMKTS:CBWTF) has announced that its wholly-owned subsidiary KGK Science Inc. has received a Cannabis Research Licence from Health Canada. Under the cannabis regulations, this will allow the subsidiary to possess and manage cannabis for clinical trials.

KGK to conduct the first clinical trial

This is the first license of its kind in Canada to a contract research organization. KGK will be conducting its first cannabis-based clinical trial to test pharmacokinetics of CBD and THC in healthy adults. The trial will start on October based on a procedure developed by KGK researchers at the company’s in-house clinic in Ontario. A third party who sponsored KGK to carry the trial on their behalf will receive the results.

KGK has several cannabis trials in its pipeline, and it is on its way to show its leadership in research and regulatory services in supporting cannabis and cannabis derivatives. CEO and President of KGK, Najla Guthrie stated that the trial is a significant step for the company’s business, clients, and the cannabis industry at large. He added that support from regulatory bodies and government was essential for manufacturers to take science-driven approaches in substantiating the safety of products through clinical trials.

Auxly establishing presence in Atlantic Canada

Recently Auxly and its strategic partner Atlantic Cultivation announced the signing of a comprehensive supply, retail and development agreement with the province of Newfoundland and Labrador. This is a significant milestone for Auxly as it looks to establish its presence in Atlantic Canada.

According to the agreement, Atlantic qualifies to apply for the running of five new retail outlets in the province. Currently, site scouting is underway, and Atlantic expects to open its first retail store in the first quarter of 2020. On its end, Auxly will supply up to 50 kg of dried cannabis flower this year to the province of Newfoundland and Labrador. This will increase to 1,000 kg next year with the option of additional 1,000 kg in 2021.

Auxly CEO, Hugo Alves said that they were delighted to build the company’s partnership with Atlantic as they seek to reinforce their position in Atlantic Canada.

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SinglePoint Inc. (OTCMKTS:SING) Subsidiary To Offer Energy Solutions To The First Ever Hemp Distribution Centre



SinglePoint Inc. (OTCMKTS:SING) has announced that its subsidiary Direct Solar of America and GSX international Group along with other corporations, are planning a first of its kind Hemp Distribution center.

Direct Solar to offer energy solutions to distribution and production centers

Direct Solar of America will supply all then required energy solutions to the distribution and production centers. This is along with energy solutions to autonomous farmers within the coop. Equally, the SinglePoint subsidiary will also facilitate the assigning or selling of ITCs between centers and farmers as well as with third parties.

This opportunity to enter the hemp market represents a massive chance to enter the burgeoning market expected to be a multi-billion dollar industry in the next few years. An organization able to effectively pool the resources of small hemp farmers and form consolidated distribution and production centers could have a competitive edge in the hemp processing market in the future. In addition to the current tax incentives provided through ITCs as well as Opportunity Zones, any group that can access both will be in a better position to reap high returns.

Direct solar services to offer exceptional value add

The company’s services will provide a unique value addition not easily replicated. This will lead to the creation of a natural barrier that will limit the entry of competitors in future that offering a long-term competitive edge. Equally, the solution will offer immediate stability to the hemp market at the same time, generate considerable profits.

Generally, the profit potential is massive owing to the current solar tax incentives and the opportunity zone exemptions. It is estimated that the project will be fully profitable in 3 to 4 growing cycles. Southern farmers will enjoy the benefit of multiple seasons per year while northern farmers will only have one growing season per year.

To reap the maximum benefit of the structure is to take advantage of the currently available tax exemptions for opportunity zone development. The financial incentive will ensure the project is profitable in the next 24 to 36 months.

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