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.
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SOURCE Financial Press Media Group Inc.