NetworkNewsWire Editorial Coverage: Canada is the mecca of the North American cannabis market, boasting legalization in every province and an array of investment opportunities, such as ABcann Global Corporation (TSX.V: ABCN) (OTCQB: ABCCF), a Canadian grower of medical marijuana. ABcann recently acquired ABcann Medicinals and boasts a recent IPO, appointment of a new medical consultant, and major expansion plans. As one of Canada’s most dominant growers of medical marijuana and one of the growers to meet the Canadian government’s stringent licensing requirements, ABcann could be positioned to see the post-IPO success achieved by Supreme Pharmaceuticals, Inc. (OTC: SPRWF) (TSX.V: FIRE), Emblem Corp. (OTC: EMMBF) (TSX.V: EMC), Canopy Growth (OTC: TWMJF) (TSX: WEED) and Aurora Cannabis (OTC: ACBFF) – all of which showcased astounding post-IPO gains in the favorable North American cannabis sector.
Ontario-based ABcann Global made its debut on the public market in May 2017 with an IPO priced at $0.80 per share and ambitious plans to foster domestic production facilities and international opportunities. PI Financial analyst Jason Zandberg was quick to initiate coverage of ABcann with a one-year price target of $2.25, which, as of August 15, represents a 160% premium over the company’s stock price of $0.68.
Despite its relative infancy as a publicly traded security, ABcann is one Canada’s dominant medical growers, recognized for using proprietary growing technology to produce organically grown, pesticide-free medicinal-grade marijuana.
The company’s low current market cap offers an obvious opportunity for investors, as ABcann compares well with other companies in an industry that Arcview Market Research expects to top $20 billion by 2021 (http://nnw.fm/4oqBD).
A look at some of ABcann’s peers demonstrates the potential of this market. Among them is Supreme Pharmaceuticals, which soared more than 1,600% after its IPO and currently trades at $0.87 per share. As of August 15, Supreme’s market cap is $250 million. Another Canadian cannabis play, Emblem Corp., has the same size growing facility as ABcann and is valued at $200 million, trading at $1.45 per share. Aurora Cannabis, which surged nearly 900% after its initial offering, trading at $1.97, is valued at $723 million.
Canopy Growth, one of the largest fully-licensed Canadian marijuana growers, saw share prices skyrocket by more than 700% in the months following its IPO. As the heavyweight of the group, Canopy is trading at $6.94 per share with a market cap of $1.17 billion.
As noted by analyst Zandberg, part of ABcann’s potential for such a performance is its ability to achieve high yields of its medicinal-grade marijuana through a scalable, computer-controlled growing environment that enables monitoring and control to ensure optimal plant growth while avoiding disease and other plight. ABcann’s expansion plans are ramping up, and a new chamber is planned for the company’s current facility in Napanee, Ontario, which currently produces 1,000 kilograms annually.
The sweet spot of ABcann’s growing position is that it owns the land to be occupied by a new 71,000-square-foot facility with a production capacity of 20,000 kilograms per year – 20 times ABcann’s current production. In further plans, a 65-acre property for a planned 1.2 million square-foot growing facility is ready for development.
Additionally, ABcann was one of the first companies to obtain a production license under Canadian Marijuana for Medical Purposes Regulation, putting it among only 3% of companies that make it through the extensive six-step application process, which requires a comprehensive background check and prior investment in a growing facility.
In July, ABcann announced its inclusion in the Horizons Medical Marijuana Life Sciences ETF (TSX: HMMJ). The ETF index selects companies with operations in biopharmaceuticals, medical manufacturing, distribution, and other marijuana industry services.
Though ABcann as a public company is only three months old, it occupies a unique position with $43 million in cash to fulfill its expansion plans. Earlier this month, as part of a $30 million financing, Cannabis Wheaton Income Corp. made an initial $15 million investment in ABcann to fund additional build-out at the company’s second production facility. The remaining $15 million will fund an additional production expansion with ABcann. Notably, Cannabis Wheaton’s valuation of ABcann matches Zandberg’s price target of $2.25 per ABcann share.
For more information on ABcann Global please visit: ABcann Global (TSX.V: ABCN) (OTCQB: ABCCF)
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