July 17, 2018 MJ Shareholders
July 17th, 2018
Exclusive, News, Top News
The Canadian cannabis industry is already worth $1.4 billion with around 270,000 registered medical patients. With recreational legalization set for October 17, 2018, the industry is projected to reach C$22.6 billion over the coming years. The opportunity is ripe for the limited number of licensed producers there, but positioning in the market is of the utmost importance to take maximum advantage. A few producers are focused on developing craft cannabis strains and even fewer others are focused on growing products to organic standards. Investors may want to watch companies focused on these areas as they could capture greater market share while securing better profit margins.
In this article, we will take a closer look at organic trends and why Rubicon Organics is well positioned to capitalize on them as it will soon be one of only three organic licensed producers. Rubicon is in the late stages of the ACMPR application process, has operations in both Washington and Colorado (in addition to British Columbia), and is going public later this year.
Many of the roughly 100 licensed producers are focused on scaling up production for the masses, but some companies have focused on creating craft products. In many ways, these trends mirror the food industry where some large-scale producers focus on low cost scalability and others focus on higher-margin organic products that convey many benefits.
According to Thompson Reuters, the majority of consumers (58 percent) prefer organic food to conventional food. These preferences are especially prominent among younger individuals with higher levels of education. For example, 63 percent of respondents under the age of 35 choose organic products when possible versus conventional food products.
There were four reasons behind these trends:
- 36 percent want to support local farms.
- 34 percent want to avoid toxins.
- 17 percent are concerned about the environment.
- 13 percent believe organic products taste better.
In the cannabis industry, the Topline Report found that 57 percent of consumers prefer organically grown products. The preference is particularly acute in the therapeutic and OTC products markets where quality standards are higher than flower products. The large number of product recalls have also led to increasing scrutiny when it comes to product quality.
Consumers are also willing to pay more for organic cannabis. According to CannStandard, cannabis consumers are willing to pay 24 percent more for premium organic cannabis.
Rubicon OrganicsTM aims to become a leader in premium quality Certified Organic Cannabis. CEO Jesse McConnell co-founded the country’s first Certified Organic Cannabis producer in Canada, called Whistler Medical Marijuana Corporation (WMMC), while the company’s CSO helped write the Certified Organic Cannabis Standards in Canada and guide WMMC through the organic certification process. Together the CEO and CSO of Rubicon OrganicsTM created the first certified organic cannabis company in the world.
Rubicon OrganicsTM is well positioned to become one of only three Certified Organic Cannabis producers in Canada, which translates into a significant competitive advantage over the other roughly 100 licensed producers in the space.
The company’s greenhouse facilities will feature:
- 100% Canadian, Certified Organic inputs.
- Solar powered, net-zero waste and energy operations.
- Water conservation-focused with rain water collection.
- Built to Environmental Farm Plan standards.
The company’s two greenhouses are set to begin cultivation during the third quarter of 2018. In British Columbia, the company is retrofitting a 125,000 sq. ft. greenhouse facility with initial capacity for 11,000 kg/year. And in Washington, the company completed a 40,000 sq. ft. greenhouse with initial capacity of 4,400 kg/year which is being leased to a state licensed producer. The company also has an off-take agreement in place in California with a 120,000 sq. ft. outdoor cultivation operation, as well as plans to expand its two owned facilities.
In addition to its cultivation footprint, the company owns several lifestyle brands. 1964 Supply CoTM is a mainstream lifestyle brand developed in collaboration with Tristan Eaton and others, and is a major title sponsor of the International Surf Festival running this summer in California. The 1964 brand is in 62 stores in California and is experiencing rapid growth. The Doctor & Crook Co. TM brand launched in Q2 2016 is already in 55 retail locations across Washington with a state licensed cannabis processor.
Rubicon OrganicsTM is well positioned to capitalize on the demand for organic cannabis products. While the company’s facilities are not in production yet, management anticipates securing approvals during the third quarter and commercially launching its products by the first quarter of next year. The company plans to go public during the third quarter of this year along with that timeline, which means investors may want to keep an eye out.
The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer/
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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