FSD Pharma’s Investments Provide Unique Diversification
Ryan Allway
March 5th, 2019
News, Top Story
The Canadian cannabis industry is projected to reach C$22.6 billion over the coming years, according to Deloitte, driven by the legalization of adult-use cannabis last year. With the upcoming legalization of edibles this fall, the market could significantly expand its addressable market beyond consumers willing to smoke cannabis. These dynamics could help lift the value of many different companies operating in the space.
FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FRA: 0K9) is best known for its 3.8 million square foot former Kraft Foods facility in Cobourg, Ontario, which could make it one of the largest licensed producers in the country, if approved by Health Canada. In addition to this massive footprint, the company has established many strategic alliances that have gone under-the-radar for many investors, but could generate significant long-term value.
In this article, we will take a look at the company’s four strategic investments as well as other partnerships that they have in place to drive long-term shareholder value.
Cannara Biotech
Canarra Biotech is an aspiring licensed producer that recently purchased a modern 625,000 sq. ft. facility on 27 acres of land in Quebec — less than an hour away from Montreal. In addition to owning over 85 million shares of the company, FSD Pharma will lease over 105,000 sq. ft. of the facility for the purpose of cultivating and/or selling cannabis or cannabis-derived products, creating another key venue to cultivation.
SciCann Therapeutics
SciCann Therapeutics is an Israeli firm that has become one of the leaders in cannabis research. With access to its network of leading researchers, academic institutions and medical centers, FSD Pharma is free to conduct rigorous clinical studies for cannabis-based products in a highly time and cost-efficient environment. The company invested an undisclosed amount in the company for these purposes.
High Tide Ventures
High Tide Ventures is a fully-integrated retail distribution company that has applied for more than 30 retail cannabis permits in Alberta and 16 in Saskatchewan. In addition, the company plans to submit an application in British Columbia in the near-term. The company owns four of Canada’s most prominent retail brands that are poised to take advantage of the nascent recreational market. FSD Pharma made a strategic investment in the firm.
Huge Shops
Huge Shops invested $1.3 million for a 9.9% ownership interest in Huge Shops, a Toronto-based cannabis retailer. The company has a strategic alliance with Chairman’s Brands/Coffee Time — a well-established operator of retail coffee shops with more than 75 locations in Canada and other locations worldwide. As part of the investment, Huge Shops has an option to acquire a minimum of ten of these retail locations.
Additional Partnerships
FSD Pharma has signed several strategic partnerships aside from its four strategic investments. These partnerships include collaborations, revenue-sharing agreements, licensing agreements, and research agreements that could pay dividends over time.
The company’s major partnerships include:
- Canntab Therapeutics: Canntab has developed patent-pending technology that provides a uniform dose of medical cannabis extract, including sustained-release options for targeted indications. Under their agreement, the company will manufacture its products in FSD Pharma’s Cobourg facility in exchange for a profit-sharing deal.
- World-Class Extractions: World Class has developed unique extraction processes designed to produce higher concentrations of cannabinoids, processes larger quantities, reduce production time, and utilize all parts of the plant. FSD Pharma has a license agreement in place to utilize the technology.
- Solarvest: FSD Pharma signed a letter of intent with Solarvest to develop and test pharma-grade cannabinoid creation from algae. The process could reduce the production time for pharmaceutical grade cannabinoids by up to 95 percent — potentially revolutionizing the industry.
- Pharmastrip: Pharmastrip has developed a cannabis-infused oral thin film technology using organic cannabis extracts. Under the terms of their deal, FSD Pharma has exclusive, perpetual rights to manufacture and sell the strips in Canada and Pharmastrip’s technology will be installed in FSD Pharma’s Cobourg facility.
Looking Ahead
FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FRA: 0K9) may be best known for its massive Cobourg, Ontario production facility that’s in the process of becoming licensed, but investors shouldn’t ignore the company’s strategic investments and partnerships. These agreements help diversify its exposure to the industry, and could generate significant long-term shareholder value.
For more information, visit the company’s website at www.fsdpharma.com.
Disclaimer
The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://cannabisfn.com/legal-disclaimer/
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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