SEATTLE, Oct. 08, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE – CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article discussing FSD Pharma Inc. (CSE: HUGE) ( OTCQB: FSDDF) (FRA: 0K9). In this article, we will take a closer look at the company and where it’s headed over the coming quarters.
Canada will become the first G7 country to legalize recreational cannabis nationwide this month, creating a $4.3 billion market that could grow to $22.6 billion over the coming years, according to Deloitte. Despite efforts to fast-track licensing, researchers from the University of Waterloo and the C.D. Howe Institute reckon that legal cannabis production will only meet 30 to 60 percent of demand after legalization—creating a significant opportunity for investors.
FSD Pharma (CNSX: HUGE) (OTC: FSDDF) (FRA: 0K9) is a licensed producer headquartered in a 70-acre former Kraft Heinz plant in Cobourg, Ontario. Management aims to transform the facility into the largest hydroponic indoor cannabis facility in the world, capable of producing 400 million grams of dried cannabis flower per year at full capacity. In addition, the company’s strategic investments could expand and diversify revenue over the long-term.
Becoming the Largest Indoor Grower
FSD Pharma’s Cobourg facility is strategically located on 70 acres of land near Toronto, including 40 acres that’s ready for development. With an existing 3.8 million sq. ft. former Kraft Heinz plant on the property, the company already has rail lines that feed directly into the facility, 26 loading docks, natural gas lines, an electrical substation, multiple water intakes, and other infrastructure that normally has to be built at a significant time and cost.
In July, the company signed a joint venture deal with Auxly Cannabis Group Inc., whereby Auxly will contribute $55 million towards 220,000 sq. ft. of cultivation, R&D, genetics, and extraction capabilities. The two companies expect the first phase to be completed by the end of the year with the first harvest in January 2019. FSD Pharma will receive a 50.1% stream after all operating expenses are recovered plus a ten percent profit.
In September, the company signed a definitive agreement with Canntab Therapeutics Ltd., whereby it will provide up to 10,000 sq. ft. of space at its Cobourg facility for Canntab to develop its suite of novel cannabis oral delivery platforms. Canntab will grant FSD Pharma 50% of the profits that it receives from any retail sales through FSD Pharma’s channels, as well as a 3.5% royalty on all Canntab products produced on-premise.
The next phase of the expansion will encompass 820,000 sq. ft., with the potential to reach 3,896,000 sq. ft. when fully developed. At full capacity, FSD Pharma believes that the facility is capable of producing 400 million grams of dried cannabis flower per year. The indoor hydroponic production also means that the facility is capable of running year round, producing ultra-high-quality product with significant economies of scale.
Strategic Cannabis Investments
FSD Pharma’s wholly-owned subsidiary, FV Pharma, is the largest shareholder of Canarra with plans to occupy over 100,000 sq. ft. of its facility near Montreal. While Canarra is still in the process of applying for a Health Canada license, it has the potential to become the largest indoor cultivation facility in Quebec. The move could provide shareholders with wider geographic diversification beyond the Toronto area.
The company also has a strategic investment in High Tide Ventures, which is a fully-integrated retail distribution firm with several license applications. It owns four of Canada’s most prominent retail brands, including RGR Canada Inc., Smokers Corner, Canna Cabana, and soon, Famous Brandz. These distribution channels could be valuable for its production businesses, including its Canntab joint venture.
On the R&D front, the company has a strategic alliance with SciCann Therapeutics, which is developing novel and disruptive cannabis-based pharmaceutical products. The company has the ability to acquire up to a 15% equity stake in the business and has an exclusive license in Canada for the production of a line of proprietary cannabinoid-based, patent-pending, indication-specific products developed by SciCann.
Looking Ahead
FSD Pharma (CNSX: HUGE) (OTC: FSDDF) (FRA: 0K9) has strategically built a significant presence in Canada’s cannabis market. With plans to develop the largest indoor cannabis cultivation facility in the world, investors may want to take a closer look at the company following its deals with Canntab and Auxly that bring it closer to this goal. Its $31.7 million in cash and equivalents and no debt put it on solid footing within an industry that tends to be over levered.
For more information, visit the company’s website at www.fsdpharma.com.
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: http://www.cannabisfn.com/legal-disclaimer/
About CFN Media
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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: http://www.cannabisfn.com/legal-disclaimer/
Frank Lane
206-369-7050
Flane@cannabisfn.com
Source: GlobeNewswire
(October 8, 2018 - 7:30 AM EDT)
