Aphria Takes Stake in MassRoots, New Partnership Forged to Penetrate Legal Canadian Cannabis Market
20 Oct, 2016, 01:43 ET
SANTA MONICA, CA, Oct. 20, 2016 /PRNewswire/ - The legal marijuana business in Canada is positioned for considerable growth. Medical marijuana has been legal for a decade and a half and Canadian Prime Minister Justin Trudeau has vowed to legalize recreational marijuana, saying that a controlled and regulated industry will reduce access to marijuana by minors while simultaneously taking money out of the pockets of organized crime. According to a poll commissioned by CTV News and conducted by Nanos earlier this year, the majority of Canadians are on board with Trudeau, with 69 percent of survey participants saying they either "support" or "somewhat support" legalization of marijuana.
Just how big the legal marijuana market will become varies amongst experts. Mackie Research Capital Corp. forecasts the legal Canadian marijuana market to reach C$2.5 billion by 2020 if recreational is legalized and C$1.1 billion if only medical marijuana remains legal. Dundee Capital Markets thinks the recreational pot market alone will grow to $5.0 billion. No matter how it shakes out, with about 27 million Canadians over the age of 19, there is a significant market opportunity at hand.
On Tuesday, San Francisco-based MassRoots, Inc. (OTCQB: MSRT) and Leamington, Ontario-based Aphria Inc. (TSX-Venture: APH)(OTCQB: APHQF) inked one of the first cannabis-oriented partnerships between a U.S.-based company and a Canadian-based company with the goal of Aphria capturing a larger share of the Canadian market. The deal brings together two companies getting firm footing as leaders in their respective fields.
MassRoots is one the biggest and most active cannabis technology platforms in the world with in excess of 900,000 registered members consisting of consumers, businesses and marijuana activists. In many instances, MassRoots has been called the "Facebook of Cannabis" and similar terms because of its high user engagement and social media and advertising components.
Aphria is a leading producer, supplier and seller of pharmaceutical grade medical cannabis. The company has distinguished itself from peers in the public domain by becoming the first licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.
Per the new pact, MassRoots will create awareness of Aphria's products and services amongst its nearly one million-strong member base. Aphria has agreed to pay MassRoots for each referral coming from its platform.
MassRoots didn't just pick up a valuable partner and client, it gained a significant investor as well. On Monday, Aphria purchased 500,000 shares of MSRT for $250,000 as part of a registered offering by MassRoots. As part of the share purchase, Aphria also received warrants allowing the company to acquire another 500,000 shares of MSRT for an additional $450,000 within the next three years.
Legal Disclaimer: Financial Press Media Group, Inc. is not registered with any financial or securities regulatory authority and does not provide, nor claims to provide, investment advice or recommendations to readers of this release to buy, sell or hold any securities. Investing intrinsically involves substantial risk and readers are reminded to consult an investment professional and complete their own due diligence, including SEC filings, when researching any companies mentioned in this release. This release is based upon publicly available information and, while vetted, is not considered to be all-inclusive or guaranteed to be free from errors. With respect to Section 17(B) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention to the fact that Financial Press Media Group, Inc. may have received compensation from the companies mentioned in this release.
SOURCE Financial Press Media Group Inc.
Share this article