Targeting combined cannabis market of 60 million adults

Constructing cannabis grow facilities in California and Canada

Diversified operations with cross-sector, cross-border footprints

The tide of cannabis legalization in North America is rising steadily to a flood, and nowhere is this more apparent than in the world’s two largest markets, California and Canada. The former was the first U.S. state to legalize (in 1996) medical marijuana, and, since January 1, 2018, has legally permitted marijuana for adult recreational use. In Canada, liberalization has followed a similar timeline. The Marihuana Medical Access Regulations (MMAR) were enacted in July 2001. They were superseded by the Marihuana for Medical Purposes Regulations (MMPR) in July 2013, which were then replaced in August 2016 by the current regime, the Access to Cannabis for Medical Purposes Regulations (ACMPR). Adult recreational use depends on the enactment of Bill C-45 (the Cannabis Act) by the Canadian House of Commons, which is expected before the end of summer. Together, these two markets comprise a colossal adult consumer base of around 60 million, divided equally at about 30 million each. It’s a base that Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF) is targeting. The company currently has separate growing facilities under construction in these two markets, including the California Campus at Cathedral City, California, and the Canada Campus at Okanagan Falls, British Columbia.

With an economy that would place it at number six in a global GDP listing, California is now the world’s premier cannabis market. It’s a market that looks set to reach almost $4 billion in 2018. In addition, forecasts in Canada call for a market value of $1.7 billion by 2020.

Phase one of the California Campus, a 325,000 sq. ft. greenhouse in Cathedral City, is well underway. Sunniva expects the facility, with an estimated capacity of 60,000 kg annually at full production, including trim, will become operational in Q3 2018. Trim consists of leaves and other parts of the plant removed during pruning. A second phase, which will add another 164,000 sq. ft. and yield an expected 40,000 kg per year, is on the drawing board. Sunniva also has a state licensed extraction facility in operation capable of processing 500 lbs. (227 kg) of biomass a day, or 125,000 lbs. (56,700 kg) per year, into high margin drug delivery formats such as vape oil, capsules, tinctures and sprays. Sunniva’s U.S. subsidiaries now hold eight 10,000 sq. ft. cultivation licenses, one 22,000 sq. ft. cultivation license, one 22,000 sq. ft. nursery license, one 10,000 sq. ft. nursery license and two manufacturing licenses (http://nnw.fm/gP6oW).

Additionally, Sunniva provides private label vaporizer devices to over 80 brands in California. At present, the company supplies only the hardware and packaging for these devices. However, it plans to fill the vaporizers with cannabis from its own facilities as soon as that is forthcoming, adding value to the products supplied to its white label clients.

Earlier in May 2018, Sunniva announced it had selected the 126-acre Okanagan Falls, British Columbia site at which to build its Canada Campus (http://nnw.fm/hW0P0). The 700,000 sq. ft. facility will have an expected output capacity of 100,000 kg annually, and it is anticipated to become operational in Q1 2019. About 75 percent of output will be pre-sold on a wholesale basis, with the rest sold directly to patients through its Natural Health Services (NHS) subsidiary. NHS, which operates a chain of seven medical marijuana clinics in Canada, has a patient base of some 95,000, which is served by 21 physicians. With so many footprints, Sunniva looks set to deliver the goods.

For more information, visit the company’s website at www.sunniva.com

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