With Canada’s medical marijuana business shifting to a free market, U.S. companies are quickly and strategically crossing the border to take advantage of all this $1 billion industry has to offer. Under the country’s Marijuana for Medical Purposes Regulations (or, MMPR), the planned transfer of production of medical marijuana to centralized commercial producers is expected to take place in April of this year. Growers are not the only businesses expected to gain in this new market; security firms, consultancies, and other cannabis-related companies can also expect to find their products and services in greater demand in this new legalized program.
Among these, four companies in particular stand out for their ability to anticipate regulatory changes, position themselves to take advantage of opportunities in this new environment, and establish alliances that enable them to maximize their collective opportunity for success: Creative Edge Nutrition (FITX.PK), Endexx Corporation (EDXC.PK), GrowLife (PHOT.BB) and RXNB Inc.
The Canadian Government has received several hundred applications from eager businesses ready to serve as legal marijuana producers once the new free market medical marijuana laws go into effect later this year. Only 3 have been approved by he government so far, with another 4 or 5 anticipated to follow suit.
Those with knowledge of the application process stress that what makes a company an acceptable candidate to Canadian authorities is a vigilant focus on quality control and compliance with government regulations at the forefront of operations. Equally important is a diverse and scalable business model, particularly in light of Health Canada’s prediction of 500,000 medicinal marijuana users in the country by 2023.
Creative Edge has been actively positioning itself to join the ranks of the approved. The company began as a sports, vitamin, and diet supplement provider, but when they recognized the potential of the medical marijuana market, they introduced hemp and eventually THC to its product lineup. This experience served them well when Canada announced that it was shifting medical marijuana production from the government to the private sector — the company was able to mobilize quickly and begin the process to obtain one of the few licenses the Canadian government will grant to grow, import, and export marijuana.
In particular, Creative Edge has been issued a ‘ready to build’ letter for a facility by Health Canada, and the company is currently constructing a 58,000 square-foot, state-of-the-art grow and distribution facility in Lakeshore, Ontario. With this facility in place, they are poised to become the first U.S. company to grow and sell medicinal marijuana backed by a sovereign nation.
This facility serves as an important element of the company’s license application — but analysts note that there are other elements that make it even more compelling. While the Canadian government requires only a 15-page application, Creative Edge has submitted a 900-page strategy. It highlights not only the company’s own strengths, but also the combined expertise they bring to bear through the support of what they consider a ‘dream team’ of supporting enterprises: Endexx, GrowLife, and RXNB.
Endexx Corporation is the company’s compliance and technology partner, responsible for ensuring that the company meets all applicable regulatory requirements through its M3Hub Seed-to-Sale Management technology platform. The M3Hub, which exceeds Health Canada’s compliance thresholds, will bring a high level of sustainability to the Creative Edge operation through its sophisticated standardization and reliable compliance methodology. EDXC’s M3Hub creates a web of traceable connections between all critical touch points in the supply chain process, from seed and nutrients, to soil management and harvesting, to packaging and shipping.
The technology platform also integrates security monitoring, personnel identification and barcoding, while increasing overall process efficiencies. Claiming the potential for 40 percent increase in productivity, EDXC will be instrumental in reducing labor expenses, accelerating crop cycles, and outlining best practices for regulatory compliance under Canada’s MMPR.
GrowLife and RNXB
Also joining forces is industry leader GrowLife. Grow Life has entered into a series of agreements with Creative Edge to serve as the exclusive supplier of growing equipment for the production facility, which is expected to be the largest and most advanced legal cannabis production facility in the world. Together, the companies anticipate 1.3 million pounds of dried medical marijuana to be produced annually. More importantly, the surrounding agricultural region eagerly welcomes the possible growth in jobs and economic activity. With this projected volume and pace, the enterprise is well positioned to serve markets well beyond Canada — there are currently 29 countries with legalized medical marijuana programs, each of which represents a considerable revenue opportunity.
Rounding out the strategic alliance is RNXB, which has numerous patents pending in the field of THC research and development and processes. FITX and RXNB will work closely to incorporate current good manufacturing practices (or, cGMP) that allows for a perpetual grow cycle in a sterile environment to inhibit adulteration or infestation of crops, a big selling point for Health Canada.
Together, these companies offer reliable, proven platforms and the ability to manage stable growth — something they expect to be particularly attractive to regulators. Moreover, their combination of secure financing, strong backgrounds in nutrition and security, and the transparency that comes from being publicly traded have all contributed to their appeal not only to the Canadian government, but to investors as well.
Originally written for SECFilings.com, a leading provider of SEC filings, real-time alerts, and in-depth analysis, with a team of experienced financial writers that cover quarterly/annual reports, insider trading/hedge fund activity, and IPOs, spin-offs, and other disclosures of interest identified from time to time within documents filed with U.S. regulatory agencies. SECFilings.com may be compensated for its services in the form of cashed-based compensation or equity securities in the companies they write about, or a combination of the two. For a full disclaimer, click here SECFilings.com/disclaimer.aspx.