SEATTLE, WA / ACCESSWIRE / June 23, 2015 / With estimates from Health Canada that their medical
marijuana (MMJ) market is slated to grow at a CAGR of 27.4 percent through 2024
as patients use cannabis to treat everything from glaucoma and pain relief to
cancer, MMJ is one of the fastest growing markets in North America, on par with
even Big Data and Cloud Computing. In the U.S., recent
analysis by ArcView Market Research indicates 74 percent YOY growth from 2013
to 2014 for legal marijuana and projections suggest that the space could grow
300 percent by 2019, from $2.7 billion last year, to over $10.8 billion.
One of the first
movers in the Canadian MMJ market, Enertopia Corp. (OTCQB: ENRT) (CSE: TOP), which got in back during
November of 2013 and was subsequently tapped by numerous third party players to
JV, has witnessed a great deal of regulatory confusion first hand as it went
about the arduous business of securing licensed producer status. Therefore the
company was not caught flat-footed by the recent announcement from
Canada's Minister of Health under the Harper government regarding the coming
into force of amendments to their Marijuana for Medical Purposes Regulation (MMPR)
program, requiring quarterly reports to healthcare licensing bodies on how healthcare
practitioners authorize the use of marijuana, as well as warnings
disseminated to industry entities about "legitimizing and normalizing
the use and sale of marijuana." The simple truth is that since the Ontario
Court of Appeal opened the floodgates to MMJ back in 2000, the only thing
consistent about Canada's approach has
been a constant argument between the courts and governmental regulators.
Two weeks ago, the Supreme
Court of Canada unanimous rebuked the
official government position banning registered patients from consuming their medicine
in edible forms like baked goods or oil. A ruling which boldly declared that it
is not a crime for such patients to use non-dried forms of MMJ, resonating with
the commonly established idea that edibles are healthier and easier on patients
than smoking. For a company like Enertopia,
which is still currently evaluating not only the commercial potential of MMJ
edibles, as well as food and beverage products that contain drug/nutraceutical bioavailability
enhancing ingredients, this landmark ruling is of great significance to
potential future operations. For outfits like Canadian marijuana-infused edibles developer, Nutritional High (OTCQB: SPLIF),
which is gearing up for retail in the U.S. MMJ market, the Supreme Court ruling similarly represents a potential future
boon, as it now seems evident that eventually sizeable edibles market could
open up north of the border.
According
to data compiled by VisualCapitalist, there are currently over 50k
registered patients under Health Canada's MMPR program, and roughly 80
dispensaries, a whopping 566 percent growth from just two years prior. However,
out of some 1.3k production license applications, Health Canada has issued only
19 full licenses and 6 cultivation-only licenses, despite over 59 percent of
Canadians now in support of full legalization (Angus
Reid Global, 2014). This means that only a tiny handful of outfits have had
access to this end of the business, like pharmaceutical-grade focused Bedrocan
Cannabis Corp. (OTC: BNRDF), which exports to Canada and has been in the sector
since 2003 under contract with the Dutch Ministry of Health, as well as OrganiGram Holdings Inc. (OTCQB: OGRMF),
a producer of condition-specific MMJ.
Enertopia remains enthusiastic about the future of both
Canadian MMJ and the related edibles market, but recently made the strategic
decision to discontinue actively pursuing MMJ producer status via its 30k
square foot Burlington JV with Lexaria Corp. (OTCQB: LXRP). The company has opted to maintain the Master JV
Agreement with Lexaria (whereby the company owns one million shares in Lexaria)
and sign a binding LOI to sell its 51 percent stake in the Burlington JV. This
sets the company up for a stronger working capital position, with some $750k in
potential milestone payments, pending the facility's potential future license
under MMPR, a process which is in the Enhanced Screening Check.
Enertopia also moved to improve share dilution with the
mutually agreed upon cancellation of the 6.4 million shares held in escrow with
respect to the MMJ licensed production JV between the company and The Green
Canvas. After having studied the evolution of the Canadian MMJ market up close
for some time now, Enertopia has concluded that raising capital to push
projects forward in the current environment does not make the best sense at
this particular juncture. Even though companies like Galileo Life Sciences (OTC:
MDRM) have managed to navigate Health Canada's stipulations a bit
farther, with the recent announcement that they are nearing MMPR licensed producer
and distributor status, Enertopia sees the handwriting on the wall after this
latest conflict between the federal government and the courts. With only 1.9
percent of submitted MMPR production licenses approved by Health Canada thus
far and only about 1.4 percent being full licenses, Enertopia isn't waiting
around for the market to mature, the company intends to redirect efforts toward
immediately accretive revenue generating activities.
This shrewd move by Enertopia to close down unproductive
aspects of their MMJ-focused operations, until such time as the quagmire created
by the Federal government and the Courts is more satisfactorily resolved, is
empowered by the recent commercial success of the company's specially
formulated V-Love(TM) for Women desire gel. The company owns 100 percent of this
exciting new women's lubrication product and Enertopia is wasting no time
branching out into revenue-generating retail sales with the recent
announcement that the product will be carried in London Drugs, which has 79
retail locations across Western Canada. This retail push also preps the company
for similar opportunities in already-legal CBD products, whose antioxidant and other
beneficial properties could lead ENRT to a growing portfolio of alternative
health and wellness sector offerings.
The $20 billion plus sexual wellness industry is forecast by
TechNavio to grow at a CAGR of seven percent over the next five years with the lubrication
segment alone currently worth around $1.2 billion. V-Love has already exceeded early
sales expectations in its initial rollout month, with over 150 units sold,
despite a limited retail presence. V-Love's overwhelmingly positive reception from
various health and wellness conferences, as well as events, combined with a
partnership between Enertopia and sexual health guru Maureen McGrath, who hosts
the popular Sunday Night
Sex Show on Vancouver, CKNW, has placed the product prominently in the
consumer's consciousness.
V-Love is a truly innovative formulation in a space
currently dominated by mostly run-of-the-mill personal lubrication brands like Reckitt Benckiser's (OTC: RBGLY) K-Y Jelly, which was developed in
1904 and previously belonged to Johnson & Johnson (NYSE: JNJ). V-Love uses such product ingredients like Niacin
(Vitamin B3), L-Arginine and lactic acid. V-Love has been specifically
crafted to have a PH of 4.1 that falls into a healthy woman's vaginal PH of 3.5
to 4.5.
V-Love is more than your everyday glycerin and
water-based lube; it is designed to enhance ones
sexual pleasure by lubricating and providing a feeling of natural vaginal
moisture and it represents the first of what could be many more
commercial products developed by Enertopia for the $3.4
trillion (Global Wellness Institute) and growing global alternative health
and wellness market. A market which is already three times the size of the
pharmaceutical industry.
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SOURCE: Cannabis Financial Network