As Emblem Cannabis (TSXV:EMC) restructures its brand into new divisions, it is aiming for its core focus to be the education of consumers.

In a March letter to company shareholders, President and CEO Nick Dean wrote about Emblem’s plans to enter into the adult-use sector in the third quarter of the year.


Dean elaborated on the company’s growth plans, which include completing two cultivation and manufacturing facilities in Paris, Ontario.

“We are also making improvements to our existing ‘closed-box’ cultivation facility, with retro-fits to three grow rooms nearly complete in order to provide greater environmental control for our production team,” Dean said in the letter.

 

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Emblem uses both greenhouse and closed-box production facilities, the difference being in climate control factors like lighting and air circulation. For example, closed-box facilities recycle incumbent air and clean it through filtration, while greenhouses rely on fresh air.

Alcohol alumnus joins Emblem

With the adult-use division joining Emblem’s currently instated operations and medical efforts, the company has brought on a new CMO to lead its recreational efforts.

Maria Guest, Emblem’s newest CMO, comes to the company with a background in marketing for the alcohol industry. Having worked for brands like Stella Artois and Corona, she has transitioned from regulatory alcohol to regulatory cannabis, a move that further indicates the growing interest in the cannabis market from more established industries.

As the company prepares for cannabis’ impending legalization in Canada, it’s also pumping more work into its branding, marketing and product development.

Irie Selkirk, Emblem’s market actuator, told the Investing News Network (INN) at a recent event that Emblem intends to build its newest division through “strong mandates of education, information [and] responsible consumption,” while also incorporating proper regulations.

The company plans to bring the adult-use division to the market through two separate brands, one focusing on health and wellness products and the other targeting more casual cannabis users.

Selkirk said she aspires to embody brands such as Lululemon Athletica (NASDAQ:LULU), a Canadian fitness clothes retailer, since it has a “strong platform of community engagement.”

 

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When asked how will cannabis brands be able to differentiate from each other, Selkirk told INN a brand must be authentic. “[A]s long as that brand and experience is steeped with authenticity and education, it’s going to gain trust of the consumer,” she said.

Investor takeaway

According to analyst research aggregator TipRanks, Emblem is projected to reach a C$2.50 share price in a year, based on a review from GMP Securities analyst Martin Landry.

On Tuesday (April 24), the company finished at a share price of C$1.56 per share, representing a 0.65-percent increase from its previous closing price. Through 2018 Emblem’s share price has dipped 36.48 percent, amounting to a C$0.89 loss.

Russell Stanley of Echelon Wealth Partners reiterated his “Speculative Buy” rating on the company after Emblem announced a medical cannabis supply deal with retailer Shoppers Drug Mart. The deal will be effective if the Canadian government allows the sale of cannabis products through the pharmacy.

The pharmacy has signed similar deals with fellow cannabis companies Aphria (TSX:APH,OTCMKTS:APHQF) and MedReleaf (TSX:LEAF).

Editor’s note: A previous version of this article stated that John Stewart was Emblem’s president and CEO. Nick Dean, however, is the company’s current president and CEO. INN regrets this error and the article has been updated to reflect this change.

Don’t forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

With files from Bryan Mc Govern

Editorial Disclosure: Emblem Cannabis is a client of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

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