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ABcann Global Corp. (TSX.V: ABCN) (OTCQB: ABCCF) Licensed to Grow Cannabis by Feds in Canada

  • An early mover in the Canadian cannabis space
  • Serving Canada’s most populous province
  • New funding deal signed for $15 million at $2.25 per share

As befits its status as a first mover in the Canadian cannabis space, ABcann Global Corp. (TSX.V: ABCN) (OTCQB: ABCCF) is racing ahead with plans to supply the medical marijuana needs of Canada’s most populous province. Construction plans at its Kimmett facility in the third quarter of 2017 remain on schedule, and the previously announced plans for a 71,000 square foot phase 1 project have been expanded to 100,000 square feet. The company recently signed a funding deal that prices the business well above market valuation. It appears that ABcann is one MMJ outfit that the smart money is betting on.

ABcann was one of the earliest players to apply for a cannabis grower’s license in Canada, which was granted in March 2014, well before the current Access to Cannabis for Medical Purposes Regulations (ACMPR) were implemented on August 24, 2016. That early start has advanced ABcann much further along the learning curve than subsequent licensees. In addition, having worked in collaboration with the University of Guelph in Ontario, Canada, to study the growing process, ABcann’s expertise is superior to most other LPs. It has developed state-of-the-art growing technology that produces high yields and consistency in its produce as it scales up. Also, somewhat like in retail, where location is a major determinant of success, ABcann’s location is fortuitous. Its operations are situated in Canada’s most populous province of Ontario, which, with 13.5 million people, accounts for close to 40 percent of Canada’s total population.

Knowledge of the growing process is particularly important if a licensed producer is going to scale up successfully. An essential requirement of medical marijuana is consistency. The product must be relied on to deliver a standardized quantity and quality of active ingredients every time it’s taken. Imagine the peril to patients of undergoing prescribed regimens of a medication with psychoactive properties where the dosages vary randomly.

Quality is obviously a crucial issue and, indeed, was one of the reasons that ABcann was founded by Ken Clement. ABcann’s mission, he has said, is “to deliver consistent, standardized medicinal cannabis that the public and patients can consistently rely on” (http://nnw.fm/2bmGl). Now, ABcann is able to produce an organically grown, pesticide-free, standardized product with a growing system that controls air quality, carbon dioxide and oxygen levels, water quality and volume, light spectrum and cycles, temperature and humidity, plant nutrition and the curing process.

Earlier this month, ABcann announced completion of the initial funding phase of its partnership with Cannabis Wheaton (TSX.V: CBW). Under the deal, CBW has purchased $15 million worth of ABcann common shares at $2.25 per share. The cash forms part of a larger phased investment by Cannabis Wheaton that is expected to fund an additional 50,000 square feet of production space, capable of producing 35,000 kilograms of product per year, at ABcann’s second facility. This expansion comes alongside ABcann’s existing construction plans for a 100,000 square foot facility at its Kimmett property in Napanee, Ontario.

Since debuting on the Toronto Venture Stock Exchange at $1.00, ABcann stock has traded down a little, but, as recent events indicate, it may be a diamond in the rough. The Cannabis Wheaton deal valued the stock, which currently trades at C$0.87, at $2.25.

For more information, visit the company’s website at www.ABcann.ca

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