Alberta Chooses Its Future Cannabis Suppliers

The big news today was that the Alberta Gaming, Liquor & Cannabis Commission (AGLC) has selected its future cannabis suppliers. The AGLC received 31 applications and chose the following 13 to supply the province with cannabis:

Supreme (FIRE.V)

Maricann (MARI.C)

ABCann (ABCN.V)

MedReleaf (LEAF.T)

Aphria (APH.T)

Organigram (OGI.V)

Aurora (ACB.T)

Starseed Medicinal (Private)

CannTrust (TRST.T)

Newstrike (HIP.V)

Canopy (WEED.T)

Weed MD (WMD.V)

Emblem Cannabis (EMC.V)

The AGLC has communicated that they plan to evaluate product demand of the recreational market in order to inform their supply needs for the remainder of the year. The AGLC is overseeing distribution to the anticipated 250 private brick and mortar retail stores as well as an AGLC online store.

Alberta Demands Some Supply

We have previously calculated the that the average amount of cannabis consumed by the residents of retail-legal Washington State was 1.054 grams per month. If Alberta consumes cannabis at the same rate, 4.146 million Albertans would consume 4,370 kg’s of cannabis per month, totalling 52,439 kg’s per year.

Do these companies have lofty expectations?

Of the 13 companies selected, only four have stated that they are allocating a specific amount of cannabis for an initial six month period.

Company Amount Allocated (kg’s) over 6 months Aurora 25,000 Canopy 15,000 Maricann 3,375 Aphria 870

If we total all four published allocations, they equal 44,245 kg’s, about twice the demand we project for Alberta.

The most optimistic of this group is Aurora who has allocated 25,000 kg’s, which is 95.3% of the Alberta demand (by our projection).

Canopy Introduces its Latin American Affiliate: Canopy LATAM Corporation

Canopy Growth Corporation (WEED) continues to grow as they made a huge move this morning by establishing a subsidiary in South America. This new company, Canopy LATAM will be headquartered in Huila, Colombia.

For an initial $53M CAD investment they will get access to South America through the two companies, Spectrum Cannabis Colombia S.A.S and Cannabis Colombia S.A.S. These companies have a presence in Brazil, Colombia & Chile, the three countries combined have a total population of 275 million people.

Assuming these companies reach their milestone targets by 2023, Canopy will have paid $160M CAD to buy the two companies.

Spectrum Cannabis Colombia owns a 126 hectare farm suitable for growing and future operations and is currently licensed for 4.5 million square feet of production capacity. It is unclear whether that square footage is indoor, outdoor, or mixed.

not actually canopy latam facility

Canopy’s 7.8B CAD market cap, and war chest of $322M CAD in cash (at the end of March) gives it the ability to make big deals like this. It’s highly unlikely that any other cannabis company will be able to catch up to Canopy in Latin America at this point.