Craft cannabis aggregator Pasha Brands (CRFT.C) is planning to enter Canada’s largest consumer market.
On Monday, Pasha Brands announced it has submitted a formal application to the Ontario Cannabis Store (OCS) to bring its collection of isolates, cannabis oils, vape pens, craft cannabis flower and CBD-infused skin care products to the province.
The OCS claims to review and research “only the most accurate information and tested products for your consideration.”
In other words, Pasha Brands’ application might take a while to get processed. But the foundation for Ontario expansion has been laid.
I’ve been covering Pasha for a while now, but I’m always taken aback by the breadth of cannabis brands it has under one roof. The company’s Ontario expansion seems to be targeting most, if not all, of their major product lines. If successful, Pasha’s Ontario application will allow it to sell the following product lines in the province:
- CBD Therapeutics (CBD isolates)
- Beard Brothers Collective (oils, vape pens, shatter distillates)
- Aurion (craft cannabis gel capsules, vape oil products)
- Theraveda (craft cannabis flower)
- Roll model (premium flower pre-rolls)
- Grizzler (sativa and indica flower pre-rolls)
- Earth Dragon Organics (CBD-infused skin care products)
I guess this is what “vertically integrated” actually means.
Doctor weighs in on craft cannabis expansion
Dr. Brigitte Simons, Pasha Brands’ chief scientific officer, oversaw the submission process. Commenting on the application, Simons tipped her hat to Pasha’s visionary leaders who built their brands during federal prohibition.
“These brands were built by people with vision, and their narratives have been tried and tested, surviving the possibility of raids in the unregulated market and complete shutdowns since October 17, 2018,” she said. “It’s time to bring these highly sought-after craft products to Canadians.”
That’s not a quote you read too often, especially in a press release.
“Submitting this application to the highly coveted and intensely regulated Ontario Cannabis Store signifies that Pasha Brands and its subsidiaries are more than ready to enter the legal market with these products.”
Pasha has a strong first-mover advantage in the legal cannabis market, having built a network of hundreds of craft cannabis suppliers. The company has completed a number of strategic acquisitions in recent months, including CBD Therapeutics and Medcann Health Products.
Sizing up the Ontario market
Ontario’s size and contribution to GDP suggests it should be Canada’s largest market for cannabis consumption. Recent data on usage trends hammer home that fact.
Twenty percent of Ontarians admitted to using cannabis in the past three months, according to Statistics Canada. That’s higher than the Canadian average (17.5%) and second only to Alberta (21.5%).
Legal marijuana sales in Canada rose CAD$11 million in May, with Ontario, B.C. and Quebec leading the pack. Ontario sales are increasing thanks to the opening of 25 retail stores across the province, with Toronto being the largest retail hub with five bricks-and-mortar locations.
The following map shows the prevalence of physical cannabis stores across Ontario:
Looking to the future, Ontario will account for the lion’s share of national cannabis sales. By 2024, it’s expected that 39% of legal marijuana sales will come from Ontario, according to ArcView. That’s 39% of $1.8 billion.
Pasha stock pops
Shares of Pasha skyrocketed Monday morning, reaching a high near $0.35. At the time of writing, CRFT was up almost 7% to $0.3419.
As a new publicly-listed company, Pasha is not for the faint of heart. The stock is highly volatile due to low trading volume and the speculative nature of early marijuana investments. The company has a total market capitalization of $11.5 million.
If you’re investing for the future and are willing to allocate a small portion of your portfolio to weed stocks, Pasha may be an attractive bet. The company’s growing portfolio of cannabis brands and the news of their acquisition has seen us to cover Pasha nine times in the past three months. We definitely ain’t done yet.
— Sam Bourgi
Full Disclosure: Pasha Brands is an equity.guru marketing client.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.