Opportunities for investment into licensed medical marijuana producers hit the market this week
Investors seeking exposure to the Canadian medical marijuana industry now have more investment opportunities thanks to with OrganiGram Holdings Inc. (TSXV: OGI) and Bedrocan Cannabis Corp. (TSXV: BED) whose stocks drew significant attention this week.
Until this week, Tweed (TSXV: TWD) remained the only publicly traded marijuana company with a Licensed Producer status from Health Canada.
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Since Health Canada’s new MMPR regime has displaced the MMAR regime on April 1, 2014 there has been much angst about how to secure licenses among medical cannabis applicants: gaining a license in Canada is harder than anticipated because of the stringent security and quality control requirements. Therefore investors should feel comfort that these three stocks hold licenses from Health Canada.
OrganiGram Holdings Inc. (formerly, Inform Exploration Corp.) results from the acquisition of the all the issued and outstanding securities of OrganiGram Inc., a New Brunswick (Canada) licensed producer of medical marijuana under Canada’s MMPR legislation, which began trading on the TSX Venture on August 25, 2014. Geography may help in the company’s success: for the time being Organigram is the only licensed producer east of Ontario, covering Canada’s Atlantic provinces, and over 1000 km from of any other license producers (as of today) could also prove beneficial. At this point in time OrganiGram does not have laboratory results for the THC and CBD contents of its 17 strains of marijuana, which suggests that the company is at the ramp up stage. But I like how they have divided their strains by medical conditions, which makes it patient-friendly in an organic kind of way.
According to its website, Bedrocan is the most experienced, research-centered producer of pharmaceutical-grade medicinal marijuana in the world, with a mission to provide patients and healthcare professionals with safe, effective and consistent medicine for the appropriate management of diagnosed health conditions. Bedrocan claims to be the global leader in medicinal marijuana as its strains of pharmaceutical MMJ have been used by more than 15,000 patients in seven countries, including Canada.
Bedrocan draws on the Dutch expertise as its Bedrocan strain was developed in the Netherlands out of a requirement by the Dutch Health Ministry to have at least one “high THC” variety available to patients. It’s a “sativa” plant type, bred because of its high yield, optimal growth characteristics, and derived from the popularly known “Jack Herer” cannabis variety. In order to appeal to existing use patterns and encourage patients to enter the official program in the Netherlands, care was taken to choose a variety that was already popularly used. Bedrocan’s THC and CBD contents of its strains are well documented but the way the information is displayed on its website leaves patients wondering which strains they should order to address their specific medical conditions.
While the arrival of two new public companies established as licensed producers is encouraging, investors should watch closely their progress through the seasonal and financial cycles. I’m concerned that eventually there might be a shortage of patients for the production capacity in place. But first we need to see if the licensed producers can deliver products of consistent qualities to their clients.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>