Cannabis Wheaton ‘Bets’ on Independent Pharmacies As Viable Distribution Partners

Despite the interest for the kickoff of recreational cannabis sales in Canada, the medical market has shown a consistent growth with new opportunities. A cannabis streaming company inked a deal with the potential to get ahead of the curve in the distribution of medical cannabis in Canada.
Cannabis Wheaton Income (TSXV:CBW), as president Hugo Alves told the Investing News Network (INN), was “willing to take a bet” and pursue an arrangement with a national chain of undisclosed independent pharmacies, announced on September 20.
After deciding they wanted to be a part of the way medical cannabis is distributed, Cannabis Wheaton’s research pointed them to the reach of pharmacies. As the deal stands, Cannabis Wheaton will monitor and control the retail space dedicated to medical cannabis, provided by their streaming partners. That is if this model becomes legal eventually.

Deal fringes on change in legality of distribution models for medical cannabis

When asked if he had any indication to be optimistic about an upcoming change in the law to allow this plan to come to fruition, Alves told INN he wasn’t aware of anything being done or discussed. Instead, Alves pointed to the differences between the distribution of recreational and medical cannabis.
“I know that pharmacies continue to be actively involved in trying to have their voice heard at a policy level,” Alves said. “We’re willing to take a bet that pharmacies will be included in the distribution channels for medical cannabis.”
This group, according to Alves operates 40 pharmacies in Canada and is focused on the construction of a “responsible retailing program,” that will serve consumers by providing them with education on cannabis products. Alves said this proposed model can become a viable supplement to the current delivery of medical cannabis.
Health Canada recently released a new batch of information on the number of medical cannabis users across the country. The data collected includes information for the first quarter of the fiscal 2017-2018 year, meaning April, May, and June.

Investor Takeaway

Set to be negotiated on a jurisdiction by jurisdiction basis, the potential profits from this deal will be distributed through a “profit-sharing arrangement.”
“In consideration for such exclusivity, Cannabis Wheaton will issue the Pharmacy Group warrants to purchase up to 1,000,000 common shares of the Company at an exercise price of $1.00 per common share for a period of 5 years,” the company announced.
This story has been updated to reflect the complete name of Cannabis Wheaton Income.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.