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ABcann Global is well-positioned to become a leading provider of organically-grown standardized medical cannabis to markets worldwide. One of Canada’s more established licensed producers, the company has invested $20.8 million in its current operations and expansion plans.
ABcann offers shareholders several key competitive advantages in both the Canadian and international markets, including an established customer base; innovative technological approach to operations; infrastructure and finance-supported expansion plans; and a top-tier management and advisory board.
ABcann’s partnership with the University of Guelph’s Controlled Environmental System Research Facility headed by Dr. Michael Dixon has resulted in a clean, standardized pharmaceutical grade cannabis product. Dixon’s team was instrumental in helping the company perfect its growing process, which also led to reduced costs and increased yields surpassing the industry average of 130 grams per square foot to reach an average yield of 257 grams per square foot.
Founder and Chairman Ken Clement, whose unique vision for standardized cannabis dosage led to the development of ABcann, has a strong relationship with Health Canada and numerous strategic partners worldwide. ABcann’s Board of Directors includes Paul Lucas, former President and CEO of GlaxoSmithKline Canada; and Daryl Kramp, former Canadian Member of Parliament.
The company’s Advisory Board includes some of the industry’s most prominent thought leaders. Dr. Raphael Mechoulam, an award-winning organic chemist considered the “Father of Cannabis Medicine”, was among the first to complete a total isolation of cannabidiol (CBD) and was the first scientist to isolate tetrahydrocannabinol (THC). Dr. Michael Dixon leads the world in technology R&D focused on studying plant and microbial interactions in advanced life support systems. He also heads the University of Guelph research team responsible for ABcann’s unique technological approach to producing organically-grown standardized medical cannabis.
- Fully-licensed with infrastructure and real-estate in place to take advantage of the forecasted $8 billion Canadian market.
- Strong customer base with 30 percent month over month growth rate and 94.7 percent customer retention rate.
- Computer-controlled growing system produces pesticide-free, organic pharmaceutical-grade cannabis products at higher-than-industry-average yields and significantly lowered costs per gram.
- Firmly established in Canada with active global initiatives to expand brand into Europe, Israel and Australia.
- Phase 2 expansion underway; construction of 71,000 sq. ft. facility with 20,000-kilogram annual production capacity to begin in Q2 2017.
- Average Yields of 257 grams per square foot, well above the industry average of 130 grams per square foot.
- Strong economics:
- Well-financed for Phase 2 Expansion
- Low costs highlight excellent cash flow potential
- High potential for sales growth to further improve cash flow
- Improving cost and margin profile
- Led by experienced management team, strong board of directors, and internationally respected advisory board.
Premium Products, Strong Customer Base
ABcann was one of the first companies to obtain Licensed Producer (LP) status under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR). The company is currently producing at its 14,500-square foot Vanluven Facility located in Napanee, Ontario. Vanluven is a fully-licensed operation with an annual production capacity of 1,000 kilograms.
ABcann obtained its sales license in December 2015 and began selling to patients in June 2016. Since then, the company has reported a year-to-date customer growth rate of 30 percent month over month with a customer retention rate of 94.7 percent. The company’s strong customer base is due in large part to its premium selection of cannabis products, offering healthcare practitioners and patients a variety of strains and THC/CBD combinations to match specific therapeutic needs.
Advanced Technology, Organically-Grown Standardized Product
ABcann’s state-of-the-art indoor facility includes a computer-controlled growing system to produce pesticide-free, organic pharmaceutical-grade cannabis products.
Health Canada announced in February 2017 that the agency “will begin conducting random testing of medical cannabis products by licensed producers” to ensure Canadian medical cannabis consumers “are receiving safe, quality-controlled product.” The random testing announcement was in response to two voluntary recalls by LPs of cannabis products contaminated with low-levels of prohibited pesticides.
In contrast to traditional large-room or greenhouse type operations, ABcann’s indoor computer-controlled environmental chambers allow different strains to be grown in conditions set by technicians, eliminating the need for pesticides while ensuring consistency from batch to batch and superior therapeutic benefits for consumers. Every aspect of the growing, curing and harvesting process is monitored, controlled and can be tailored to a particular strain of cannabis.
Partnership with University of Guelph
The result is a cannabis product practitioners can prescribe with confidence.
ABcann’s success in growing a consistent pharmaceutical-grade product is a direct result of the company’s $1.5 million, 3-year partnership with the University of Guelph’s Controlled Environmental System Research Facility led by Dr. Michael Dixon, a member of the company’s Advisory Board.
“The challenge is to reliably homogenize the environmental experience for the plants so they all behave the same and produce the same medicinal compounds,” said Dr. Dixon. “The only way to achieve that is to grow plants in a very precisely controlled, predictable and reproducible manner.”
This technological precision allows ABcann to produce reliably clean and consistent medical cannabis that increases the confidence level of both healthcare providers and patients.
Higher yields and low costs per gram production
Precise control over the growing process allows ABcann to lower the costs per gram by:
- Using less water and energy;
- Optimizing the use of fertilizer and nutrition;
- Guaranteeing purity through the prevention of mold and bacteria; and
- Producing significantly higher yields.
ABCann’s current yield rate is 100 percent over the industry average.
Partnership with Syqe Medical in Israel
“We may now have a delivery system for medical cannabis that is effective, stable, safe and easy to use.” The Journal of Pain and Palliative Care Pharmacotherapy
ABcann’s ability to produce organic, standardized pharmaceutical-grade cannabis has attracted the attention of Syqe Medical, an Israeli company which has developed the world’s first selective-dose pharmaceutical-grade cannabis inhaler. ABcann is now providing product for the ongoing testing and development of the Syqe inhaler.
Teva Pharmaceutical Industries has signed an agreement with Syqe to be the sole distributor of the inhaler in Israel, a country which as of 2016 had a total licensed medical consumer base of approximately 26,000 and that figure is expected to double by 2018.
Expansion Plans: Increasing Production for Increased Revenue
ABcann has the real estate and the scalable infrastructure in place to successfully move forward with its expansion plans for a 150,000-square foot facility with an annual production capacity of 40,000 kilograms. The company owns 65 acres of serviced industrial zoned land sufficient for up to 1.2 million square feet in production space—one of the largest land packages in the industry.
In Q2 2017, ABcann plans to begin Phase 2 of its expansion plan by initiating construction of the Kimmett Facility. The 71,000-square foot facility will have an annual production capacity of 20,000 kilograms. Given the high-yields its precision controlled operations are able to obtain, ABcann estimates the CAPEX for the Kimmet expansion can be paid back in 9 months to a year once full production capacity is reached.
Market Outlook for Canadian Cannabis Sector
Analysts including PI Financial, Canacord Genuity Group and Dundee Capital Markets are forecasting that annual sales of both the medical and recreational cannabis markets could reach upwards of $8 billion per year by 2024.
The Canadian market for medical cannabis is growing rapidly with an 1,544-percent increase in Canadians registered under the ACMPR from mid-2014 to a total of 130,000 as of December 31, 2016, reports The Canadian Press.
The expected legalization of marijuana for recreational use by Prime Minister Justin Trudeau’s Liberal government is also a major driver of growth expectations in this sector. This spring 2017, Trudeau is set to table legislation to legalize recreational marijuana in Parliament. Recreational sales are projected to start in the first half of 2018. Canaccord has estimated that the number of cannabis consumers will reach nearly 4 million in the first few years of legalization.
Further impacting market fundamentals is the projected supply shortage as current LP production capacity is far from matching the expected 2024 demand levels.
Building a Global Brand
ABcann is leveraging its success in the Canadian market to build a more global reach. Analysts at PI Financial estimate that the export market for Canadian-grown cannabis could reach $0.5 billion to $1.5 billion in 2019. ABcann has already exported product to Israel and Australia, and expects to obtain a distribution license for export to Germany in Q3 2017. Medical marijuana legislation recently passed the German parliament and is slated to take effect in March 2017. ABcann anticipates Germany will become another big market for cannabis, similar to Canada.
Aaron Keay – CEO and Director
Aaron Keay has spent the last 11 years working in the capital markets across a broad spectrum of sectors. His roles have ranged from corporate finance, senior management and board member. He has overseen finance, M&A transactions and capital raising, helping private companies navigate from the private to public markets. His work and leadership has helped raise ~$250m for public and private market issuers.
Ken Clement – Founder, Executive Chairman
Ken Clement has been the key component and driving force behind ABcann’s development. His vison is unique in the medical cannabis sector with the concept of standardized production and dosage. Clement enjoys a strong rapport with Health Canada and numerous strategic partnerships worldwide. “I have only met briefly with Ken but anyone who is able to take an idea and with pitbull determination transform it into a world class corporation like ABcann, in such a short time, is truly a miracle worker.” Dr. Mike Shannon, former Deputy Surgeon General Canada.
Neil Kapp – President, Operations
Neil Kapp has over 30 years of experience in operating and managing businesses in both the commercial development and recreational facilities market place, with annual revenues in excess of $6.5M.
Andrew LaCroix – VP Business Development and Director
Andrew LaCroix started his legal career working for blue chip firms in Vancouver, and has run his own practice on Vancouver Island since 2008. He has been involved with ABcann since its inception as general counsel, drafting and submitting ABcann’s initial Health Canada license application and acting as general counsel on a host of different business and legal issues. He will provide ABcann Global Corporation with ongoing advice, and play a large role in both domestic and international business development.
John Molloy – Executive Consultant
John Molloy is a former President and CEO of PARTEQ Innovations at Queen’s University for 28 years. His leadership led to the formation of 48 companies based on Queen’s research, with more than $1.7 billion invested to date in those companies.
Jenny Guan – CFO
Jenny Guan has a business accounting background with over 15 years’ experience in various key leadership roles in business operations, finance, and program management.
Daryl Kramp – Director
Daryl Kramp was the Member of Parliament for the riding of Prince Edward-Hastings from 2004 through October of 2015. His past political experience includes six years as a municipal councilor and deputy reeve in the municipality of Madoc. He has created and operated several successful business ventures in the fields of retail, wholesale and hospitality.
John Easson – Director
John Easson has over 23 years of experience advising companies on Corporate Finance, and Mergers and Acquisition transactions. Whether it be through his own BE Capital Advisors practice or his 15 years working for BMO, RBC and Scotiabank, he has significant transaction experience with a range of companies from small private start-ups to some of Canada’s largest public companies.
Paul Lucas – Director
Paul Lucas served as President and CEO of GlaxoSmithKline Canada from 1994 until he retired in 2012. Currently he is a member of the Board of Directors of RnA Diagnostics Inc and is also Chair of the Board of EcoSynthetix Inc., Induran Ventures Inc., and Life Sciences Ontario. He received his BSc (Honours) in Biology and Chemistry from Queen’s University, and obtained his Chartered Directors designation (CDir) from the Directors College.
Raphael Mechoulam, PhD – Advisory Board
Dr. Raphael Mechoulam is an organic chemist and professor of Medicinal Chemistry at the Hebrew University of Jerusalem. In 1963 he was among the first to complete a total isolation of CBD and was the first scientist to isolate THC. He has over 25 academic awards including the Rothschild Prize in Chemical Sciences and Physical Sciences in 2012.
Donald I. Abrams, MD – Advisory Board
Dr. Donald Abrams is Chief of the Haematology-Oncology Division at San Francisco General Hospital and a Professor of Clinical Medicine at the University of California. He has an Integrative Oncology consultation practice at the UCSF Osher Center for Integrative Medicine. He co-authored the chapter on “Cannabinoids and Cancer” in the Oxford University Press Integrative Oncology.
Mike Dixon, PhD – Advisory Board
Mike Dixon is a Professor in the School of Environmental Sciences and Director of the Controlled Environment Systems Research Facility, University of Guelph. He formed the Space and Advanced Life Support Agriculture (SALSA) program and leads the world in technology developments and research dedicated to studying plant and microbial interactions in advanced life support systems.
Chris Hudalla, PhD – Advisory Board
Dr. Chris Hudalla is the Founder and Chief Scientific Officer of ProVerde Laboratories, Inc. He has more than 25 years of research experience in analytical chemistry, spectroscopy and chromatographic method development and is recognized worldwide as an expert in the field of traditional Reverse Phase Liquid, Supercritical Fluid and Convergence Chromatography.
Michael E. Shannon, M.A., M.Sc., M.D. – Advisory Board
Dr. Michael Shannon served in the Canadian Forces for 31 years, retiring at the rank of Commodore as Deputy Surgeon General for Canada. He directed a phase III clinical trial in Canada, the U.S. and Great Britain for an artificial blood substitute product. He is Senior Medical Advisor for the Canadian Public Health Agency on special assignment directing the rebuilding of the Emergency Medical Response Capacity for Canada, the largest emergency response exercise in the history of the country. He was directly responsible for the first approved human clinical trial in North America examining the efficacy of O3 delivered via autohemotherapy in the treatment of AIDS. He has served as the Senior Media Advisor to Medizone International since 2002, and was appointed the President of the Canadian Foundation for Global Health in 2008.
Paul Daeninck, MD – Advisory Board
Dr. Paul Daeninck is a Medical Oncologist and palliative medicine consultant with Cancer Care Manitoba and the Winnipeg Regional Health Authority (WRHA) Palliative Care Program. He is an Assistant Professor and Leader for the Palliative Care Longitudinal Theme for Undergraduate Education at the College of Medicine, University of Manitoba. Dr. Daeninck is the author of several research papers as well as textbook chapters. He serves as a reviewer for palliative medicine journals. He has been active in medical student and resident education, and has ongoing research interests in several aspects of palliative medicine, including that of cannabinoid use in patients with cancer.