Exclusive Interview with Cannabis Wheaton President Hugo Alves: One Stock, Diverse Exposure to Canadian Cannabis Cultivation
October 5th, 2017
420 Investor, Exclusive, News, Top News
There are no shortage of opportunities to invest in Canada’s cannabis industry, but many companies face significant risk factors. A bad harvest or contaminated product could derail an individual cultivator, while pharmaceutical companies could experience a failed clinical trial. Investors may want to consider companies that have more diversified exposure to the $22.6 billion industry to mitigate these risks and increase the odds of success.
In this article, we will look at how Cannabis Wheaton Income Corp. (TSX-V: CBW) aims to become the first cannabis streaming company and why investors should take note.
CFN Media recently spoke to Mr. Hugo Alves about the company’s future plans. Prior to joining Cannabis Wheaton, Mr. Alves was a corporate lawyer for 17 years involved in the cannabis industry representing 12 licensed producers, 62 applicants, and 50 leading cannabis-focused ancillary businesses around the world, which provided many connections in the space.
Cultivating a Pipeline
Cannabis Wheaton has already made tremendous progress building up a portfolio of cannabis streaming partners. According to its investor presentation, the company has 15 streaming partners across six provinces with 1.4 million effective square feet of cultivation coming online by 2019. In addition, Cannabis Wheaton has entered into strategic relationships with cannabis clinic partners that collectively have over 30,000 patients registered under the ACMPR and operate approximately 40 clinics that provide distribution channels for its product.
The company helps these partners fund facility construction, expansion, and innovations in exchange for minor equity interests and portions of the cultivation production. In addition, these partners can access its relationships and branding expertise to develop brands that resonate with consumers and access new distribution channels for their product. Cannabis Wheaton benefits with the upside of multiple facilities without the risk of brick-and-mortar.
In addition to its streaming partnerships, the company recently launched a licensing program that’s designed to help start-ups in the space. This programs aims to identify three or four exceptional cannabis entrepreneurs and serve as a quarterback to help them navigate regulatory hurdles and secure a license. In exchange, Cannabis Wheaton receives an equity interest and effectively conducts pre-diligence on their next cohort of streaming partners.
Canada appears set to legalize recreational marijuana in the middle of next year, but the federal government left it up to individual provinces to decide how it’s done. In early September, Canada’s largest province announced somewhat unexpected plans for up to 150 government run shops to sell recreational marijuana, which will be overseen by Ontario’s Liquor Control Board that already runs its 660 liquor stores.
Cannabis Wheaton believes that this move underscores the importance of medical cannabis distribution in the Canadian marketplace. The company plans to strategically focus on medical – in addition to recreational – marijuana to maintain the producer-patient relationship. This will help Cannabis Wheaton capture a greater portion of the retail margin on medical cannabis than available through government-run distribution centers where the government owned distribution center will have an enormous influence on the price of recreational marijuana over time and keep a lot of the retail margin for itself.
The company recently announced a valuable new distribution channel that provides access to leading independent pharmacies throughout the country. Under the exclusive 10-year agreement, the company aims to sell product through a national chain of independent pharmacies that could open the door to significant opportunities. The pharmacy chain also has close ties to other independent pharmacy chains through group purchasing agreements.
Cannabis Wheaton Income Corp. (TSX-V: CBW) represents a compelling opportunity within Canada’s burgeoning cannabis industry. With plans to grow its partnership base over time, the company is positioned to become a leading streaming firm that has exposure to many cultivators without the risk of brick-and-mortar. Its recent pharmacy partnership also strategically positions it within the market to avoid potential distribution issues with recreational marijuana.
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About CFN Media
CFN Media (CannabisFN) is the leading creative agency and media network dedicated to legal cannabis. We help marijuana businesses attract investors, customers (B2B, B2C), capital, and media visibility. Private and public marijuana companies and brands in the US and Canada rely on CFN Media to grow and succeed.
CFN launched in June of 2013 to initially serve the growing universe of publicly traded marijuana companies across North America. Today, CFN Media is also the digital media choice for the emerging brands in the space.
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