Key Companies That Will Remap Canada's Cannabis Retail Industry

NEW YORK, February 23, 2018 /PRNewswire/ --

CannabisNewsWire Editorial Coverage 

Out of 120 applicants, Manitoba recently awarded four master retail licenses, a monumental action as Canada prepares to legalize cannabis for recreational use this summer. The entities that now hold prized licenses to retail pot and its associated paraphernalia in the province are: Tokyo Smoke, a subsidiary of HIKU Brands (CSE:HIKU) ( OTC: DJACF) (DJACF Profile); a consortium of Delta 9 Cannabis Inc. and Canopy Growth Corp. (TSX: WEED) (OTC: TWMJF); National Access Cannabis (TSX-V: NAC) (OTC: NACNF); and 10552763 Canada Corporation. One key industry player that missed out on this licensing opportunity is MedReleaf (TSX: LEAF) (OTC: MEDFF). These licenses open the doors to considerable recreational retail revenue potential, and investors with foresight were quick to take action, with Aphria (TSX: APH) (OTC: APHQF) and Koicha Partners LP investing millions into the big four's newest presence, HIKU.

New name, established brand  

Although the name HIKU is new, the brands behind it are well-known and have interesting back stories. Tokyo Smoke was named "best brand" at the inaugural Cannabis Industry Awards in December 2017, and in January 2018 the company joined forces with Doja Cannabis Company to create HIKU. HIKU is led by CEO Alan Gertner and President Trent Kitsch, who founded the best-selling men's brand, SAXX Underwear.

Gertner ran a $100 million business as head of an Asia-Pacific-wide sales team during his tenure in corporate strategy at Google. When he found that what he thought was his dream job was less than fulfilling, he shifted gears and co-founded Tokyo Smoke with his father Lorne Gertner, formerly PharmaCan chairman (now Cronos Group), who was dubbed the 'Godfather of Canadian Cannabis'.

Tokyo Smoke is a seasoned retailer, already running stores online and several successful brick-and -mortar shops, selling a range of experiential products that feature the creative use of cannabis. Established already in key markets like Toronto and Calgary, Tokyo Smoke's cannabis will soon be on shelves in legal recreational dispensaries in the United States.

East meets West in merging of cannabis retail and production minds  

Partnering with Doja Cannabis, a seasoned Kelowna-based pot producer, was Gertner's first foray into production. The strategy of merging minds with industry expertise in producing and retailing pot brought Gertner, based in the east, and Kitsch, based in the west, to a new market in the Manitoban middle ground.

The cannabis industry is growing at a rapid pace. While powerful players are teaming up to establish brand presence and formulate creative ways to differentiate themselves, the smaller contenders will begin to get weeded out. With Manitoba's major retail cannabis players now clear, the stage is set for companies to continue their push toward becoming Canada's first dominant cannabis retailers. HIKU, with shares trading over $2.50 and an estimated market cap topping $300 million, is definitely one to watch.  

Comparables: 

Aphria (OTCQB: APHQF) (TSX: APH) was founded in 2011 and is headquartered in Leamington, Ontario. The company calls itself one of the lowest-cost producers of marijuana, and produces dry cannabis, as well as cannabis oil of varying qualities and strength. Its cannabis is 100 percent greenhouse grown. Aphria's estimated market cap is over $2 billion.

Canada's largest producer, Canopy Growth (OTC: TWMJF) (TSX: WEED), has a market cap of more than $4 billion, with shares currently trading over $22, a 61.3% increase over the last three months.  Formerly known as Tweed Marijuana Inc., Canopy Growth was founded by Bruce Linton in 2014, and is based in Smiths Falls, Ontario. Canopy Growth is the first federally regulated, publicly traded cannabis producer in North America. It operates numerous production facilities across Canada and around the world with over 700,000 square feet of production licensed under Canada's medical cannabis framework.

National Access Cannabis (OTC: NACNF) (TSX-V: NAC) National Access Cannabis' market cap is over $135 million; stock is trading over $1. The company operates medical cannabis care centers across Canada, National Access is adapting its established medical clinic model to meet the needs of the Manitoba retail market.  National Access works alongside Health Canada and Licensed Producers to help qualifying patients gain access to their license. After receiving the Manitoba retail National Access announced it intends to deepen its relationships with CannaRoyalty Corp. and Cannabis Wheaton Income Corp.

MedReleaf (TSX: LEAF) (OTC: MEDFF) was voted Top Licensed Producer at the Lift Canadian Cannabis Awards.  MedReleaf is an Ontario- based, R&D-driven company dedicated to innovation, and delivering products to the global medical market, and providing brands and product assortment for the recreational consumer market. MedReleaf's market cap is currently over $2.26 billion.

For a more in-depth look into HIKU Brands, visit HIKU Brands (CSE:HIKU; OTC: DJACF) or read the FULL Report: Cannabis Investors Need Three M's To Success: Money, Moxie, and Management

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