LONDON, December 20, 2017 /PRNewswire/ --
In 2007, Netflix rolled out a novel new business model known as "streaming", starting with 1,000 titles available to watch online. Now, ten years later, Netflix's 100 million users in more than 190 counties are watching 125 million hours of Netflix content per day and eating up a whopping 37 percent of all internet traffic at peak hours. Included in today's commentary: Cara Therapeutics Inc (NASDAQ: CARA), Insys Therapeutics (NASDAQ: INSY), Terra Tech Corp (OTC: TRTC), Innovative Industrial Properties (NYSE: IIPR)
This single idea has not only revolutionized the way that we unwind after work, but has essentially restructured the way that the free market functions in the internet age.
Now, the concept of streaming can be applied to just about anything--even weed. A small Canadian company that has so far flown under the radar may be about to revolutionize the cannabis industry by introducing a streaming model to one of the fastest-growing markets that exists today (estimated to have a base retail value of $8-billion in Canada alone).
Cannabis Wheaton Income Corp. (CBW; CBWTF) has a lot of competition amongst the many clamoring marijuana opportunists in Canada, but it's aiming to be the dominant financier of the marijuana industry with this bold new innovation to set it apart from the pack.
As Canada swiftly moves toward legalizing recreational marijuana, with an expected rollout date set for July 1, 2018, many companies are racing to get in on the ground floor. Cannabis Wheaton could have a distinct advantage on that front, as it offers diversified, reduced risk exposure in a market with skyrocketing demand.
Canada's more-than 200,000 medical marijuana patients are already complaining about supply bottlenecks, and the number of such patients is expected to grow to 500,000 by 2021. To meet this demand Canada's growers will have to produce another 150,000 kilograms of pot, according to Canaccord Genuity. And that's just the medicinal market. When recreational marijuana is legalized next year, as expected, there will be an enormous cannabis demand that the nation's producers are not currently prepared to meet.
Canaccord Genuity estimates that by 2021 there will be an additional 3.8 million recreational users consuming 420,000 kilograms, or $6 billion of this green gold. At the moment, Canada only has 80 licensed producers and last year they grew only 31,000 kilograms-in other words, approximately 7 percent of anticipated demand, according to the Financial Post. In other words, by next year, Canada may have a major cannabis problem if it can't meet demand.
Enter Cannabis Wheaton. The world's first cannabis streaming company is backed by a powerhouse team and political heavyweights from both conservative and liberal platforms. Not only is Cannabis Wheaton jumping into a huge market where supply is likely to struggle to reach demand, but it's offering a lifeline to new and existing growers who need financing to get off the ground fast. This is all thanks to their innovative financing strategy, a "royalty" business model that is new to this market and a big draw for investors who take some comfort in the fact that they aren't putting all their money into a single-crop producer.
#1 Legalization on the Way
The time is ripe for a major innovation in the cannabis industry. Canada is poised to legalize recreational marijuana in July and once that happens, the industry will see significant growth in demand. in a country already unable to meet demand for medical weed, the number of pot-hungry customers could be about to increase significantly, leaving a vacuum and an opportunity for an innovative company with a new business model to take up some of the slack.
With such a potentially large industry and so many small cannabis companies lined up for their piece of the pie, it will be essential to have something that makes a company stand out. This is what makes Cannabis Wheaton ripe for success, thanks to its royalty-streaming model, an innovation totally new to the industry.
#2 'Streaming' Deals Already Lined Up
This pot-financing pioneer is a major catalyst for change in Canada's projected $8 billion market, thanks to its innovative royalty-streaming business model, which is expected to offer low risk but lucrative exposure to cannabis demand. Investors won't be putting all their eggs in one basket and producers will have more opportunities to get financed and get growing.
But it's not just about risk-it's about exposure. Through Cannabis Wheaton (CBW; CBWTF), exposure isn't limited to a single crop: investors get access to multiple licensed producers to take advantage of this burgeoning industry.
15 partners are already lined up to 'stream' pot with Cannabis Wheaton, along with a hefty potential to hit 1.4 million effective square feet of growing acreage by 2019. In return, Cannabis Wheaton will get minority equity interests and a portion of the pot produced. It also has 39 clinic relationships, with access to over 30,000 registered medical marijuana patients.
#3 Fast Track Scale-Up
Cannabis Wheaton is all about scaling up quickly and capitalizing on market share, made possible by the royalty-streaming model, which frees the company of single-crop limitations.
Bottom line: What Netflix is to movies and TV series, Cannabis Wheaton is to pot. Investors see value in it because it gives them lower-risk and diversified exposure to the industry.
#4 Canada's Pot Problem: Very Tight Supply
The supply picture is so tight that Health Canada has had to streamline the approval process for growers because medical marijuana users have tripled in number since last year alone, according to Quartz. When it becomes legal recreationally, Deloitte estimates the economic impact of this industry will be worth $22.6 billion annually-in other words, more than sales of beer, wine and spirits combined.
But shortages are where things can get lucrative, and the Canadian government is also keen to make sure supply meets demand. The gap Cannabis Wheaton is looking to exploit is a huge one: "There is a segment of the marketplace where people are trying to get their facilities built and they don't have access to capital at all," Hugo Alves, President and Director of Cannabis Wheaton, states.
#5 Canada's Pot Solution: Cannabis Wheaton
Pot producers are now under significant pressure. Massive market share potential is being dangled in front of them-but without financing that still allows them to maintain control over their product, it's hard to get off the ground. And investors are wary because this is a risky business.
Cannabis Wheaton (CBW; CBWTF) has discovered how to take this growing industry to the next step in its evolution. Producers get the best of both worlds, maintaining control over their companies but gaining access to financing and expertise on everything from regulations and licensing to cultivation. It proposes the full package and a boost for investor confidence. And Cannabis Wheaton, well, it is set up to get a nice, steady stream of pot royalties in an industry that is likely soon to be demanding much more product.
This is the Cannabis Market 2.0, and Cannabis Wheaton (CBW; CBWTF) not only has first-mover advantage, but it could have only-mover advantage, with the expertise and political weight to back it up. Once Canada is secured, this model could be looking to set up with first-mover advantage internationally.
Cara Therapeutics Inc (NASDAQ: CARA) has had a particularly strong year in 2017. At the beginning of August, the company had seen over 175 percent growth, although it has since corrected slightly. The company focuses primarily in the pain therapeutics market, which is an estimated $83-billion per year industry. The company approaches the pain therapeutics market in a new way.
Insys Therapeutics (NASDAQ: INSY) is generally known as a "marijuana stock" but it would be a bit of a misnomer to lump this company in with pot stocks. Insys' main product is a sublingual pain medication known as Subsys. However, using the same proprietary sublingual spray technology and their advanced knowledge of synthetic cannabinoids, the company is at the forefront of a new pharmaceutical movement.
Terra Tech Corp (OTCQX:TRTC) is a vertically integrated cannabis-focused agriculture company that is committed to cultivating and providing the highest quality medical cannabis and other agricultural products.
Terra Tech Corp. has a number of subsidiary business through which it operates. Blum, IVXX Inc., Edible Gardens, MediFarm LLC and GrowOp Technology are the subsidiaries that grow and distribute cannabis to the U.S. market.
Terra Tech managed to cut operating expenses and boost revenue in Q2 2017 while growing production capacity. Investors should keep an eye on this company in 2018
Innovative Industrial Properties (NYSE: IIPR) is set to boom in the coming years. The company has formulated a strategy to target properties for acquisition and management to be leased to state-licensed marijuana growers, a market which is certain to flourish. Innovative Industrial's leasing plan is simple: the tenant is responsible for everything from taxes to maintenance. The company's hands-off approach allows for a steady stream of revenue with little oversight.
By. Joao Piexe
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