Organigram and Bedrocan Go Public
On August 25, 2014, Organigram, Inc. and Bedrocan Canada, Inc. will open on the TSX Venture Exchange. This gives investors two licensed Canadian producers to explore, in addition to Tweed Marijuana Inc.
Canada’s medical marijuana market is attractive to many because it is nationally regulated, comparatively predictable and primed for growth. Health Canada expects it to generate C$1.3 billion over the next 10 years. For investors, however, choices have been limited. Of the 13 licensed producers that are the exclusive source for marijuana patients, only Tweed has been publicly traded. That is about to change. Each of the three options also has a distinct profile that may appeal to different investors.
Organigram focuses on 16 organic strains specifically targeted, on the basis of THC level and cannabidiol content, to relieve medical conditions including spasticity, chronic pain, nausea, and anxiety and stress disorders, among others. Like other licensed producers, it offers only dried flower product, not tinctures, oils or edibles. The company has licensed its own vaporizer for patients who find smoking problematic. Organigram is the only licensed producer east of Ontario, and consciously markets in French, as well as in English.
Organigram is not currently serving any patients, but expects to make its first shipment in late August or early September. Their financial projections anticipate approximately 17,000 clients by 2018, generating $63.2 million in revenue and $33 million in profit.
Bedrocan, on the other hand, has 10 years of overseas experience in The Netherlands and Northern Europe. In February they began offering five strains in Canada, imported from their Dutch facility. They expect to begin domestic production in early 2015. Bedrocan has cultivated a reputation for a pharmaceutical-grade product that is clean, consistent and standardized enough to be suitable for scientific research as well as patient use. Bedrocan’s hallmark appears to be its scientific credentials.
Tweed became a licensed producer in January, 2014, and went public in April, opening a facility in Smiths Falls, Ontario. The company shipped its first orders in May, later than originally anticipated and from a smaller crop, but it has subsequently acquired Park Lane Farms, a 350,000 square foot greenhouse in Niagara-on-the-Lake, Ontario. Tweed opened with the largest financial cushion of any licensed producer at the time. They may have the advantage of a head start in the market, and have been the subject of much investor curiosity.
Tweed lists 22 strains of marijuana, 17 of which appear to be currently available. These are described on its site in consumer rather than medical terms, as having a calming effect, producing euphoria or a good night’s sleep, for example. The site also offers several different kinds of vaporizers.
Canadian regulators continue to warn of the potential for scams in the nascent medical marijuana industry. There is no substitute for due diligence, especially when dealing with penny stocks.
Overall, though, the Canadian marijuana industry, because it is nationally regulated, may seem like a more predictable place for investors. Things may have just gotten a little more interesting with the addition of two new publicly traded players.