WeedMD: A Licensed Producer Going Public April 27th, Targeting Senior Care
April 20th, 2017
News, Top News
The Canadian cannabis industry is expected to reach upwards of $22 billion over the coming years, according to Deloitte analysts, with over 140,000 registered patients today. Many investors may be focused on the recreational market, but the medical market could experience tremendous growth as cannabis becomes a preferred alternative to opioids. This is particularly true in the senior care space where prescription medications are causing the most problems.
In this article, we will take a closer look at WeedMD and its unique approach to solving senior care problems with cannabis-related products.
WeedMD is going public on April 27th, trading under the ticker “WMD” on the TSX Venture exchange.
Senior Care & Cannabis
There are more than 460,000 Canadian residents living in long-term care and assisted living facilities and that figure is projected to double by 2031. In fact, the senior population grew by 3.5% last year, which is four times faster than the general population. Many people may think of cannabis as a young person’s drug – particularly when looking at the recreational market – but there’s a very real need for medical cannabis within the senior care market.
The majority (60%) of seniors in long-term care facilities take more than ten medications per day, which imposes a large burden on the country’s healthcare system. Worse, more than 16% of seniors take a class of prescription pain medication known as opioids, which are closely associated with addiction and adverse health effects. WeedMD believes that medical cannabis can alleviate many of these issues more safely, effectively, and cost-efficiently.
WeedMD’s management team has over 100 years of combined experience in public, senior management, and ownership roles within the senior care industry. By understanding the industry’s unique challenges, the company aims to position itself as the strategic partner for the industry and help improve quality of life and other key performance indicators. The patient population is also very “sticky” with regular consumption and offers significant cost and operational efficiencies.
Significant Growth Potential
Canada’s cannabis industry is expected to surpass $22 billion in size over the coming years, according to Deloitte, with over 140,000 registered medical marijuana patients today. With about 40 licensed producers under the ACMPR, the industry is expected to see a shortfall in supply given the 205% compound annual growth rate in registered patients since June of 2014 along with the near-term plans to legalize marijuana for recreational use.
WeedMD obtained a license to cultivate within a 26,000 square foot former Imperial Tobacco facility and already has 14,000 square feet under lights. In the future, the company plans to expand to over 220,000 square feet that will include grow rooms and an extraction lab. The existing facility also sits on over four acres of land in Aylmer, Ontario – two hours from Toronto – with an option to acquire additional four and 100-acre parcels.
The company plans to secure its sales and distribution license in the near-term, expected in Q2 2017. Among the existing public LPs, there’s an average enterprise value of $500 million with a range of $70 million to $2 billion, which suggests that investors could see significant upside. Investors interested in the space may want to keep an eye on the company as these near-term catalysts approach and a public listing is imminent.
WeedMD, going public April 27th, is an existing Canadian licensed producer of cannabis under the ACMPR, focused on the senior care industry. CEO Bruce Scully has over 22 years of experience in the long-term care industry for both public and private companies, while CSO Dr. Luc Duchesne has a PhD in Plant Biology with over 85 peer-reviewed papers and 30 years of experience with the production and commercialization of natural products.
By leaning on management’s extensive experience, the company has significant potential to make inroads into the lucrative senior consumer subset that could generate predictable revenue over the long run. Investors may want to keep an eye on the company as it seeks to obtain final licenses and go public in Canada.
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