ABcann (ABCN.V) adds branding muscle to medical marijuana division

On May 23, 2018 ABcann (ABCN.V) announced the launch of Beacon Medical, its new medical cannabis brand.

Beacon Medical’s expertise is helping patients and doctors “navigate the complex medical cannabis market” to locate the best treatment option.

  “Our vision is to leverage our unique experience in the global pharmaceutical industry to create one of the most respected medical cannabis companies,” stated Barry Fishman, CEO, “The launch of Beacon is an important step towards that vision.”

Editor’s note: Fishman is not an opportunistic nickel explorer who magically spouted a green thumb overnight.  He led the Pharmaceutical Co. Merus Labs to an annual growth rate of 50% (sold in July 2017 for $342 million). He is also the former CEO of Teva Canada: $1 billion Revenue.  Fishman is a pharma-dude who is an expert swimmer in the waters where nothing matters but sales.

ABcann currently operates a 30,000 sq. ft. facility in Napanee, Ontario, with an output of 1,400kg. The company also holds a 320,000 sq. ft. greenhouse and is expected to have its first harvest in 2018 and is constructing another 150,000 sq. ft facility, expected to have its first harvest in 2019.

That’s great, but there’s a reason so many Canadian weed growers are transitioning into branding: it’s extremely hard to make money farming.

Take Gladstone Land (LAND.NASDAQ) as an example. This well-run real estate investment trust (R.E.I.T) currently owns 74 farms (vegetables, almonds, blueberries, pistachios, strawberries etc.) comprising of 63,175 acres in 9 different states across the U.S.  It’s market cap is $208 million USD.

If you’d invested $100,000 in LAND 15 years ago, that investment would now be worth…$80,000.

Growth stocks usually do things other than growing.

Farming is notoriously labour intensive and difficult to scale.

Branding the medical side of ABcann’s business was predictable, given the company’s foray into recreational branding: on March 19, 2018, ABcann (ABCN.V) announced that it has invested $4 million in Choom while agreeing to supply Choom with premium cannabis products, subject to regulatory approval.

Choom (CHOO.C) is “planting our flag in the rapidly growing legal cannabis industry in Canada with our own brand of high-grade handcrafted herb.”

According to the press release, “Choom was inspired by a group of buddies in Honolulu during the 1970’s who loved to smoke weed—or as the locals called it, Choom.”

Recently, ABcann stated the following four business priorities:

  1. Expanding to 500,000 square feet to produce over 30,000 kilograms of capacity
  2. Expanding Harvest Medicine platform to multiple new locations in 2018; and
  3. Developing strategic partnerships in the industry to broaden our reach and scale
  4. Focusing on branding and product innovation in the medical and adult-use sectors

The creation of The Beacon Medical brand followed ABcann’s 2018 study of 1,500 Canadians.

The study’s conclusions: 67% of adult Canadians who are not currently using cannabis – but have a treatable condition – are “unfamiliar with how to obtain medical cannabis.”

With so many Canadians not clear about how to obtain and use medical cannabis, ABcann believes the market is ready for a brand that makes the process easier to navigate.

Beacon Medical will focus on the patient experience: simple registration and product classification, efficient purchasing, pharmaceutical-grade products, and compassionate customer service.

On a May 03, 2018 business update, ABcann announced that it has, “approximately $130 million in cash, to accelerate the growth of our business” – with the execution of the following growth strategy:

  1. Production Capacity and Capability
  • 2018 capacity – 800 kilograms of indoor grown premium dry flower and 1,500 kilograms of seasonal greenhouse cannabis
  • 2019 capacity – 1,500 kilograms of indoor grown premium bud and 14,000 kilograms of seasonal greenhouse cannabis to be used primarily in finished medical and adult-use products
  1. Go-to-Market Strategy
  • Rebranded and new consumer brands to be rolled out mid-year 2018
  • Harvest Medicine to open 2nd clinic in Edmonton in early Q3 2018
  • Launching telemedicine platform in Q3 2018 to provide access to patients seeking medical cannabis in underserved communities
  • Secure distribution agreements
  • Increase its promotional interactions with cannabis clinic prescribers
  • Increase the frequency and impact of its marking and communications
  • Upgrade its product line and service offerings.
  • Innovative first-of-its-kind vaporizer access program and a Q3 2018 oils launch
  1. International Expansion
  • Australian sales and sales activities underway
  • GMP status approval, required for European sales, targeted for late 2018
  • The Company aims to obtain a distribution license in Germany
  • Evaluation of multiple opportunities to enter into additional European markets.

Investors, media and consumers can check out the new Beacon brand at the Lift Expo taking place in Toronto from May 25th to 27th, 2018.

According to the May 23, 2018 press release, “The full Beacon Medical website and product line, which will include the introduction of cannabis oils, will be available to ACMPR patients by early summer 2018.”

Full Disclosure: ABcann is an Equity Guru marketing client, we also own stock.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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