Medical Marijuana update: Mettrum (V.MT) & Aphria (V.APH) dominate, Pharmacan (V.MJN) coming

The first movers in the medical marijuana industry have had their time to hit the ground running, but three new players have emerged of late that promise to crowd the top of the tree.

Mettrum Health (TSX:V.MT, Stock Forum) announced its second MMPR approval last week, this one on its Clearview, Ontario Agripharm facility, which will be used to grow full plants which will then be transferred to Mettrum’s Bowmanville Ontario HQ for processing and sale. The license, similar to Tweed’s ‘Tweed Farms’ license, which permits the same germinate-and-transport plan, will help V.MT supply its industry-leading 2100 patients, according to CEO Michael Haines.

Patient numbers have become an increasingly big deal of late, as the focus of investors has moved from ‘who will get a license’ to ‘who has the ability to sell what they grow.’

Mettrum hit a yearly high on the news of its patient numbers, though it was down 10% today as product offerings for new patients appear to currently consist only of ‘trim’ blends, however the second license, and a sizable war chest, should help them alleviate that situation.

Bedrocan (TSX:V.BED, Stock Forum) has a patient list at around 1500 and has moved over $1m in product this year, while growing at 100 patients per month, while Organigram (TSX:V.OGI, Stock Forum) (last I heard) was nearer the 1100-1200 range with an off-take deal in the works with a PTSD treatment chain. Tweed’s (TSX:V.TWD, Stock Forum) patient numbers are not publicly available.

Another new player is Aphria (TSX:V.APH, Stock Forum), which has completed its first patient product shipment two weeks after receiving its MMPR approval. The company says it was sitting on 100 kilograms of product in the lead-up to the license and new patient signups have been strong.

The company has 22k sq. ft. of production space ready in a 450k sq. ft. three-greenhouse facility in Leamington, Ontario and is led by a formidable CEO in former Jamieson Laboratories boss Vic Neufeld, who turned that company into a $250 million giant in the nutrition space.

Aphria is taking a very pharmaceutical approach to its product, with simple packaging, a very corporate website with plentiful information for doctors, and a renaming of the traditional strain monikers from things like ‘Qrazy Train’ and ‘AK-47’ to Canadian geographic labels, such as Kootenay and Athabasca.

Pharmacan (TSX:V.MJN, Stock Forum) announced yesterday they’ll be debuting on the markets this week. The company invests in a portfolio of plays in an effort to diversify across the ganjasphere.

They have a 100% stake in In The Zone in BC’s Okanagan, a 27.3% stake in Peace Naturals in Ontario, and a 21.5% piece of Whistler Medical Marijuana Company. Green Medical in Drummondville Quebec has a deal with the company to acquire a 33.3% interest, Evergreen in Victoria, BC, has an arrangement for 25%, and the company also has minor stakes in ABCann and the ever-weird $26 per gram Quebec producer Hydropothecary.

I spoke to one CEO of an LP this morning who questioned Pharmacan’s choice of targets, but suggested the diversified portfolio approach is a good sector bet.


Matica (CSE:C.MMJ, Stock Forum) halted today on news it would be spinning off its mining assets. Central focus of the company (if the ticker symbol is any indication) is the THC Dispensaries MMPR application in Nova Scotia, which sits on 35 acres of land in Antigonish and is currently waiting on its pre-license inspection. It won’t be a huge weed grow, but it’s a lot closer to LP status than the market realises and gives credit for.

Regular readers will note I suggested the mining asset spin-off as a strong likelihood a few weeks back, and that I think those mining assets have considerable juice, being as they would produce what Tesla wants, a cab ride away from the proposed Giga-factory.

Graphite transport is giga-expensive and the Grumpy Lizard property is largely free of overburden which should make a move to production giga-cheap. Also included in the asset roster: The Buckingham North graphite play in western Quebec. All of which makes this a giga-interesting play, especially as a freebie spinoff for Matica holders.

Talked to Clive Massey, CEO at Windfire (TSX:V.WIF, Stock Forum) yesterday to get some sense of that play moving forward, being as it’s been news-devoid for a while. Bottom line: They got COB-screwed in 2014.

They have a Richmond, BC-based grow that’s on the MMPR application list and has been running under the MMAR program to date. Holding costs are about 5k per month, should the February injunction kill the MMAR program. The facility, Rosebud Productions, was started by two of Whistler Marijuana’s co-founders, is theirs under an acquisition agreement, if they raise their financing as needed.

Company looking to raise $600k soon as they expect the facility to get to a Ready To Build approval, which would kick in the next $750k of their purchase price ($250k has been spent to date, $5m in cash and equity will be the final price, assuming an MMPR is delivered).

So what’s been the hold-up? The TSX Venture exchange.

Massey says they told the TSX what their plan was, re: Rosebud, earlier in the year and the exchange initially had no problem with the plan. They then executed their change of business process, halted the stock, and the TSX recalibrated and decided only companies with full MMPR approval would be allowed to be listed; information that might have been important to share earlier.

So after five months of dead time and investors being unable to access their equity, the company has flipped to the CSE which says, due to high demand for new listings, should be ready to kick things back in inside six weeks.

Massey says he sees 2015 as a period of consolidation in the weed industry, and that ultimately Windfire would like to progress things to the point where it’s ideally positioned for a bigger fish to come in, either as a JV or acquirer – but says he’s also happy to be the aggressor and has “several opportunities” that he’s sizing up in the weeks ahead for potential diversification of the business strategy.

Tight float. Market cap probably about right. Lots of room to finance new opportunities. The halt prevented them from taking advantage of a sector spike, but also saved them from the ensuing slump. Long story short, Windfire wants to hit the ground running, when they’re allowed to do so.


Another small player making moves, though much further along in their evolution, is Inexco Mining (CSE:C.IMC, Stock Forum), which has announced the completion of due diligence on its deal to acquire Worldwide Marijuana Inc, and that several time biotech president and CEO Pierre Leduc has joined the company’s advisory board.

He joins a board that shows considerable political and experiential heft. So much so that the board makeup is kind of the business differentiator right now.

The stock has jumped HARD on increased volume earlier in the week, from $0.30 to $0.45 in a few days, which is to be expected on a 10m share float with a low market cap.


On the lighter side of weed, Stockhouse Support got a note of complaint this week from the head of Cannabis Oil Corporation, which is looking to RTO with Satori Resources (TSX:V.BUD, Stock Forum, after I mentioned the new CEO had some ‘eclectic’ social media posts behind him.

I don’t often have reason to share support team complaint responses, but found this one too hilarious to keep private.

The RTO just announced is a forward step. But it has left some confusion as to what it all means. And, frankly, the new CEO has left a trail of eclectic social media posts over the last few months, which has added to the weirdness.
Read more at https://stockhouse.com/news/newswire/2014/12/04/rumour-and-innuendo-medical-marijuana-edition#PiGORhrYzdy665X6.99

Christopher Skidmore
December 1 at 11:29pm ·
Have you ever tried lighting a fart on fire... but the methane was accompanied by too much non-flammable material?

Out of respect to the Satori team, I won’t repost the initial complaint letter, though it featured its own special brand of unintentional comedy. Good luck with the RTO.

ON THE CLOCK: Matica, Supreme (CSE:C.SL, Stock Forum) and Bedrocan tell me they’re awaiting final inspections in the coming month or so.

HURTIN’ FOR CERTAIN: Vodis, InMed, Umbral, Weststar. T-Bird, Alchemist, Calyx and Crailar hit 52-week lows in the last few days.

REALLY?: LOI factory Easton Pharmaceuticals (OTC:EAPH, Stock Forum) announced they’re looking to acquire a ‘private medical marijuana club’ in Ontario. Translated: We’re buying their mailing list.

CEN Biotech (OTO:FITX, Stock Forum) boss Bill Chabaan? Still in hiding after his board resigned and he threw out a vague ‘we’re going to do a spin-off’ newser. What is the toal number of shares now that Bill’s sold of his own company? 70m shares? Stock trading under $0.02.

Wondering why Geonovus took out an LOI to purchase a music catalogue? Here's a hint: It belongs to Affinor boss Nick Brusatore.

--Chris Parry
https://www.twitter.com/chrisparry

FULL DISCLOSURE: Supreme, Bedrocan and Inexco are Stockhouse Publishing marketing clients.