Canada is really only the tip of the iceberg when we talk about cannabis legalization. Zooming out to a more macro perspective shows us much larger populations across the globe moving towards either full legalization, or at least a regulated medical system. Canada plans to be the major global cannabis exporter. For companies like Maricann who were first movers in Germany and who have big European plans, along with a projected 95,000 kg’s per year of cannabis production, the global cannabis landscape has endless opportunities.
Deals, Brands & Distribution
Maricann has made some very attractive deals in several different areas in Canada and abroad. This includes a recent agreement with the Swiss company Haxxon AG where they will be creating unique CBD cigarettes which should be a huge play in the European market. They were first movers in Germany with an 840,000 square ft. facility in Dresden.
They have also partnered with Bob Marley’s son Juju to distribute his 4 designer strains of dried cannabis flower. Maricann has the rights to distribute the well known European brand Rare Dankness in Canada. In terms of distribution, McKesson Canada Retail Banner Group has also signed a deal with Maricann to supply McKesson’s 2,000+ pharmacies in Canada. Maricann signed a similar 4 year supply deal with Lovell Drugs.
Products & Costs
Maricann plans to be one of the largest producers in Canada with a target of 95,000 kg’s of dried cannabis flower per annum in a growing space of approximately 940,000 square ft. Maricann has set out to have a very low cost per gram of production. Their Langton expansion will see 3 phases. Phase 1 began in 2016 with a cost per gram at $1.34, by phase 3 this is projected to significantly drop down to an impressive $0.60 per gram. Maricann currently sells cannabis flower under ten different labels (4 indicia dominant, 4 sativa dominant and 2 hybrid) and cannabis oils under four labels which can be seen below:
A few companies in Canada have expressed interest in EU expansion plans, but only a few have definitely executed on them, Maricann being one of them. I sat down with Maricann to discuss what exciting things are upcoming with Maricann.
Taylor (High Energy) : According to MARI’s investor presentation, you are projecting your cost per gram to go from $1.34 down to $0.60. How do you plan on achieving this?
Graham (Maricann): We can achieve this by economies of scale, automation, and costs advantages with our NatGas co-generation on site alongside our 1MM Litre cistern. Our new building is based on the design of an existing building in Colorado, being built by the same group. So it is easy for us to import the numbers from that operation into ours.
Taylor : Your current target is 95,000 kg’s annually, making you one of the larger producers in Canada, yet your market cap is a lot smaller than other companies in this sector with similar projections. A lot of new investors are coming into this space looking for undervalued companies. Do you think this is why MARI’s stock has been gaining a lot of attention lately?
Graham: I suspect people realized we were undervalued, hence we were an outperformer in January. We also had some delays last year, which hurt the share price and the reputation of the company. But that was short term and the issues were resolved.
Taylor: Can you speak more about the pharmacy agreements you have in Canada? How much of your distribution model moving forward will rely on pharmacies?
Graham: Our pharmacy agreement in Canada gives us access to ~2200 stores from coast to coast, with an estimated 66,000 patents being directed to us per year.
Taylor: MARI has been making a lot moves in Europe, what competitive advantages will those deals give you in that part of the world? MARI announced a proposed acquisition of Haxxon AG, what kinds of products would that acquisition allow you to create? CBD cigarettes? CBD vapes?
Graham: Haxxon would be CBD cigarettes, up and running in September. I believe we are the first movers in Germany given we have an 840,000 sq. ft. facility already built and paid for in Dresden
Taylor: What kind of capabilities or unique products could the Vesisorb technology give to MARI ?
Graham: Vesisorb is our game changer – it makes Cannabis oils soluble in water – without that, the oils either clumps or slicks on the surface.
Taylor: MARI’s stock has had an incredible run over the last couple months, what specifically in MARi’s future do you see that will continue to generate interest from investors around the company?
Graham: We have a lot on the go in Europe, stay tuned.
A Brief History
‘Maricann received its first license from Health Canada under the Marijuana for Medical Purposes Regulations on March 27, 2014 and its full Health Canada sales license to produce and distribute medical marijuana on December 12, 2014. Maricann commenced sales of medical cannabis in December 2014 and commenced cannabis oil production and sales in May of 2016 and October of 2016, respectively. Maricann received an updated license under the Access to Cannabis for Medical Purposes Regulation (“ACMPR”) on November 8, 2017, which expires on October 9, 2020. On September 5, 2017, Maricann received a second site license for its Burlington, Ontario location. ‘
‘On November 6, 2017, the Company announced that it and a national provider that services over 2,000 pharmacies across Canada (the “Counterparty”) entered into a definitive agreement to create a pharmacy services program designed to enable pharmacists to counsel and appropriately educate patients in relation to medicinal cannabis. The 8 joint initiative aims to position pharmacies to be a preferred access point for medicinal cannabis based on pharmacists’ role in working with physicians and patients in understanding the multi-synchronistic opportunities in multi-medication patients. On November 8, 2017, Maricann Group announced that Health Canada had granted Amalco, a new licence that removed annual production limits on approved medical cannabis products in the Company’s Langton, Ontario facility. This new licence increases capacity to 6,250,000 grams on site at any one time. This is an increase from its previous annual licence that limited production to a total of 1,282,000 grams (930kg of dried marihuana and 352 kg of cannabis oil) per year and is valid until October 9, 2020.’
‘Maricann commenced cannabis oil production and sales in May and October of 2016, respectively. In September 2016, Maricann received its licence to sell bottled cannabis oil. In November, 2016, Maricann completed a non-brokered private placement of 4,618,604 Maricann Shares to existing shareholders at an issue price of $0.68 per share for gross proceeds of $3,148,704. On December 7, 2016, the directors of Maricann authorized a stock split of the Maricann Shares on a 305.1:1 basis. ‘
Maricann Website: https://maricann.com/
Maricann Investor Presentation:
MARI Stock Information: https://web.tmxmoney.com/news.php?qm_symbol=MARI:CNX
Maricann Investors Facebook Group: https://www.facebook.com/groups/MariCann/
Juju Marley: https://jujuroyal.net/
Haxxon AG & Maricann Press Release:
Article Sources: Sedar, Maricann