On October 17, 2017 Abcann Medical (ABCN.V) announced the appointment of Paul Lucas as Chair of its Board. Mr. Lucas is the former CEO of GlaxoSmithKline Canada (1994-2012).
GlaxoSmithKline (GSK.NYSE) is a venerable UK pharmaceutical company launched in 1848 with laxative pills.
After successfully loosening the bowels of Queen Victoria and Oscar Wilde – it expanded into toothpaste and penicillin. GSK is now an $85 billion company with 90,000 employees and $40 billion in annual revenue.
The appointment of Mr. Lucas follows the September 7, 2017, appointment of Barry Fishman as the CEO of ABcann.
Mr. Fishman also has pharmaceutical pedigree.
Most recently he was CEO of the pharmaceutical company Merus Labs (MSLE.NASDAQ) which has a portfolio of profitable drugs. Under Mr. Fishman’s watch, sales grew at a compound annual growth rate above 50%. In July 2017 Merus was sold for about $340 million.
The pharmaceutical industry’s expertise in selling product into a regulated environment may be transferable to the cannabis space, allowing it to expand production profile and sales territory.
According to the September 7 press release:
“The appointment of Mr. Lucas as independent Chair, together with the recent appointment of Barry Fishman as Chief Executive Officer, represent important steps in the Company’s enhancement of its operational oversight and corporate governance standards.”
Based in Napannee, Ontario, ABcann holds production and sales licenses from Health Canada. Its flagship facility “contains proprietary plant-growing technology, centered on its specially designed, environmentally-controlled growing chambers.”
ABcann intends to produce organic, pesticide-free, high-yielding plants.
“ABcann is able to control environmental and nutrient demands, tailor-made for a particular strain of cannabis, without the variation that is typical when producing large quantities in less-controlled, larger rooms and greenhouse-type structures.
ABcann’s modular approach to systems technology eliminates scale-up risk and enables ABcann to expand anywhere in the world and maintain consistency and quality of product.”
This “modular approach” gives ABcann the ability to expand production centers in the same manner as a pharmaceutical company. ABCN is currently pursuing opportunities in Germany, Australia, Israel and other jurisdictions.
ABcann is expanding capacity in its current facility to 30,000 sq ft and while beginning its expansion into a new 150,000 sq ft facility.
A publication, titled, “The Generational Growth Opportunity for Canadian Cannabis,” claims that, “A recent analysis by Eight Capital, a Toronto-based investment bank, targets the potential Canadian international medical cannabis market at a staggering $142 billion over the next 15 years. Licensed producers in good standing are best positioned to reap immense rewards from this generational growth opportunity. Of these, ABcann Global Corp. (TSX.V: ABCN), among Canada’s first licensed producers, is already considered one of its premiere growers.”
ABcann highlights from Q1/Q2/Q3 2017:
- Completed multiple financings including a subscription receipt offering for $11.8 million and a private placement for $15 million.
- Initiated expansion of the Company’s Vanluven facility
- Began construction at ABcann’s 150,000 square foot Kimmett facility
- Cannabis Wheaton invests $30 million investment into ABcann
- Extended the research contract with the University of Guelph.
- Added to the Horizons Medical Marijuana Life Sciences ETF.
- Listed on the OTCQB Marketplace and Frankfurt Stock Exchange
- Completed a private placement financing of common shares to CBW at a price of $2.25 per share for proceeds of $15m.
- Received approximately $7.5m in additional proceeds from the exercises of nearly 12 million warrants.
“I very much look forward to helping to shape ABcann’s future under Barry’s leadership as CEO,” stated Lucas, “He is uniquely qualified, with his experience in complex, highly-regulated pharmaceutical organizations with international operations, to capitalize on the significant opportunities in the rapidly growing regulated cannabis market.”
This is a new frontier. The fog is lifting. We can now delineate the shapes. To paraphrase Donald Rumsfeld – there are still more unknowns than knowns.
But it is interesting to observe a weed business operating with the managerial DNA of a pharmaceutical company.
Full Disclosure: ABcann is an Equity Guru marketing client. We also own stock.