Canadian Marijuana Producers Set Their Sights High

Section Grower Morgan Blenk sorts marijuana plants at Tweed Marijuana Inc in Smith

Canada is one of the few countries anywhere where its citizens have a constitutionally protected right to access medical marijuana with a physician’s consent,” said Paul Rosen, chief executive officer of PharmaCan, a holding company with large stakes in four producers. “And you’ve got the government trying to create an industry around it.” Tweed Marijuana Inc (TWD.V), which converted an old chocolate factory into a marijuana farm, led the pack by becoming the first publicly held Canadian company in the sector. Its April offering was oversubscribed within 15 minutes of being announced, sources said.

Inspired by Tweed, PharmaCan plans a listing in the next month or so. Producers Organigram, Aphria and Bedrocan expect to go public in the next three months, while CannMedica and others are looking at doing so. Highlighting the industry’s mainstream allure, Tweed’s listing was led by two highly respected Bay Street firms, mid-sized investment bank GMP Securities and boutique adviser Jacob Securities. Other banking firms involved in the sector include Dundee Securities, Bloom Burton, PowerOne Capital Markets, Jordan Capital Markets and Delavaco Group. RISKS AND REWARDS An April overhaul by regulator Health Canada has thrown the market open.

More than 850 companies have applied for licenses to produce the drug, and 13 have obtained them so far. “This is Health Canada’s realization that medical marijuana deserves to have a space in the treatment paradigm,” said Bloom Burton President Brian Bloom. “What they’re asking in return is that the standards of manufacturing, distribution and vigilance are similar to what is seen in the pharmaceutical industry.” Analysts expect only a few major companies to remain standing a few years from now.

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