Demand Outpacing Supply as Canadian Cannabis Legalization Looms

Demand Outpacing Supply as Canadian Cannabis Legalization Looms

NEW YORK, October 3, 2017 /PRNewswire/ --

The Canadian government's plan to push through legalization of marijuana for recreational purposes by mid-2018 figures to deal a serious blow to the existing black market. However, industry analysts are increasingly skeptical of the ability of the country's Licensed Producers to keep pace with this forecast spike in demand. As noted in a recent article published by CBC, "Unless something changes quickly, the supply of available pot come legalization next July, will be inadequate, and the black market will continue to thrive." ABcann Global Corp. (OTC: ABCCF) (TSX-V: ABCN) (ABCCF Profile), with its healthy cash position and aggressive expansion plans, is one company seeking to address these supply concerns, particularly in the medicinal market. Joined in the space by Canopy Growth Corp. (OTC: TWMJF) (TSX: WEED), Aurora Cannabis, Inc. (OTC: ACBFF) (TSX: ACB), Aphria, Inc.(OTC: APHQF) (TSX: APH) and Medical Marijuana, Inc. (OTC: MJNA), ABcann's relatively low market cap and beefy portfolio of pharmaceutical-grade IP have it on the radar of investors looking to capitalize on Canada'smuch-anticipated "green" revolution.

Mere months out from its initial public offering, ABcann Global Corp. (OTCQB: ABCCF) (TSX.V: ABCN) has already shown tremendous potential in setting itself apart from other Canadian growers. The backbone of the company's operations, which focus on the development of consistent pharmaceutical-grade products that are organically grown and pesticide-free, is its proprietary growing technology. As noted on its website, ABcann's products are always free of chemicals and produced in small batches to ensure high quality standards. This commitment to quality has helped ABcann steer clear of the recent wave of product recalls in the Canadian cannabis market that has affected many of the industry's biggest names.

Scaling these operations has become a major focus for ABcann's management team in recent months, as highlighted by the company's latest strategic moves. In mid-September, ABcann announced its reception of $11.9 million in total proceeds from the exercise of warrants. When combined with an earlier investment from cannabis streaming company Cannabis Wheaton Income Corp., the infusion brought ABcann's cash position to approximately $45 million. As Aaron Keay, director of ABcann, noted in that news release, "The Company's main focus in the coming months will be on the deployment of capital towards the expansion of [its] existing Vanluven facility and development and construction of the new Kimmett facility, as well as the pursuit of [its] international expansion plans." These facilities mark another upside of ABcann's business model, as the company owns the land it intends to use for these expansion projects, eliminating potentially costly leasing expenses.