Supreme Pharmaceuticals Inc., International Cannabis Corp., Aurora Cannabis Inc., Canopy Growth Corp., Aphria Inc vying to become the biggest

James West
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What do Aurora Cannabis Inc. (CVE:ACB), International Cannabis Corp (CVE:ICC), Supreme Pharmaceuticals Inc  (CNSX:SL) and Aphria Inc (CVE:APH), and Canopy Growth Corp (TSE:CGC) all have in common? They’re striving to become the “biggest” marijuana growing operations in the world.

Supreme Pharmaceuticals is the undisputed leader in that endeavour among this group, with 342,000 square feet of  space in the process of being filled up with a veritable sea of green.  CEO John Fowler told me that his intention is to produce “10,000 KG per year (subject to regulatory approvals) by the summer of 2017.”

International Cannabis, on the other hand, says in its investor presentation that it will seek to activate over 4 million square feet of possible growing space, for which it says it is in advanced permitting mode.

And Aurora Cannabis announced on November 30th that it has broken ground on construction of a new 800,000 square foot facility near Leduc, Alberta.

According to the press release, the new operation will be called “Aurora Sky”,and will be a “hybrid greenhouse facility, with a footprint larger than 16 football fields”.The release goes on to say that “upon completion, it will be the largest, most advanced and most automated cannabis production facility in the world. Situated on 30 acres of leased land in Leduc County, Alberta, management anticipates Aurora Sky to be capable of producing in excess of 100,000 kilograms of high quality, low cost cannabis per year. ”

That’s a lot of Cannabis. In fact, with so much capacity being developed, there is a risk that the market will, in the near term, reach a state of oversupply. Even with the anticipated recreational marijuana legalization, there appears to be so much capacity coming down the pike that the industry leader at this point – Canopy Growth Corporation – will have its hands full trying to maintain that position.

Canaccord Genuity analysts Matt Bottomley and Neil Maruoka issued a research note yesterday opining that the Canadian marijuana industry is “no joke” and that marijuana sales could reach $6 billion by 2021. The said that the annual black market demand, estimated to be 400,000 kilograms annually, would be the main contributor if consumption of marijuana for recreational purposes is legalized in 2017. They say the market will likely be in a severe shortage by 2020 – a stipulation which clearly fails to consider the numerous newly licensed marijuana producers coming on stream now, as well as the massive build-outs by the incumbent marijuana growers now underway.

Canada’s Task Force on Marijuana Legalization and Regulation is expected to deliver its report to the ministers of health, justice and public safety by the end of the day on November 30th, 2017.

Canopy Growth Corp currently has  over 500,000 square feet of combined indoor and greenhouse growing space, and recent license amendments increased the company’s licensed production capacity to over 13,500 kilograms of dried cannabis and 6,700 kilograms of cannabis oil, representing over 7 million ml of finished cannabis oil. They also announced plans to expand geographically to an unspecified amount with shareholder Goldman Group, a Canadian real estate enterprise that owns 3.8 per cent of Canopy’s outstanding shares.

Aphria Inc is also spreading its wings through both domestic capacity expansion and through acquisition in the U.S.

The company announced it had acquired a 5 per cent interest in Copperstate Farms LLC, who had purchased a 40-acre (equivalent to 1.7 million square feet) high tech, Dutch style greenhouse facility in Snowflake, Arizona. Aphria says with its current expansion underway from 100,000 to 300,000 square feet, it will increase yields to 18,000 kilograms annually.

 

 

 

James West

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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