Become A Featured Company

Growers vs. Extractors: Where to Invest in Cannabis

Ryan Allway

November 9th, 2020

App, Exclusive, News, Top Story

Canopy Growth Corp., Tilray Inc. and Aurora Cannabis Inc. are the largest cannabis cultivators in the world, but the shift in consumer preferences from flower to extracts has made cannabis extraction the fastest growing subset of the industry. In fact, MediPharm Labs Corp. and The Valens Company reported revenue of nearly C$14 million  and about C$18.5 million , respectively, placing them among the top-earning Canadian cannabis companies.

Let’s take a look at why cannabis extraction is experiencing strong growth and how investors can position their portfolios, as well as why Christina Lake Cannabis (CSE: CLC) may offer the best of both worlds with its low-cost cultivation and in-house extraction.

Click here to receive an investor deck and corporate updates

Growth in Extraction

The global market for cannabis extracts is projected to reach $28.5 billion by 2027, according to Grand View Research, representing a 16.6% compound annual growth rate. While the illicit market remains flower-dominant, consumers in the legal market have turned to extracts as a discreet and healthier choice that’s more convenient than dried flower.

Cannabis Spending by Category in the U.S. – Source: BDS Analytics

In Canada, the legalization and subsequent rollout of vape pens, beverages and edibles earlier this year has led to greater demand for cannabis extraction services. The growing popularity of these products across California and other parts of the United States—where they have been available for some time—suggests that these growth rates could continue to accelerate.

Many cannabis giants are either building or have already built their own extraction facilities to meet consumer demand for these products. Despite these new facilities coming online, many analysts predict that the new infrastructure will still be insufficient to meet growing customer demand, which means these companies may have to outsource extraction.

A handful of cannabis companies have stepped in to fill the void by focusing on extracting oils from cannabis and turning them into products, such as soft gels or concentrates. These companies tend to sign supply agreements with licensed producers and function as a middleman in the supply chain that convert dried flowers into extracts.

Click here to receive an investor deck and corporate updates

Investing in Extracts

Capital has poured into many extract companies to take advantage of these market dynamics—and they’ve become strong performers—but the risk is that capacity eventually catches up. When that happens, these companies must either shift to branded products or deal with lower margins as their business becomes commoditized amid healthier levels of supply.

Christina Lake Cannabis Corp. (CSE: CLC) offers the best of both worlds with its low-cost cannabis cultivation and in-house extraction capabilities. As an outdoor cannabis cultivator, the company has a significant cost advantage (over indoor producers) whereby it plans to process into high margin, full-spectrum extract-based products with its Vitalis R200 extractor.

Christina Lake Cannabis’ Master Growers – Source: Christina Lakes Cannabis

The company has already secured and received all of the licenses that it requires and intends to focus on the wholesale distribution of food grade, high THC cannabis to domestic and international markets. Management believes that the larger addressable global market, shelf life, ease of storage and other factors make it a better business than dried flower.

Earlier this year, the company completed its first harvest of at least 32,500 kilograms  of dried cannabis and management anticipates multiple increases in production for 2021 and 2022 on its 99-acre plot that’s directly adjacent to its current facility. The company is also evaluating other opportunities, such as fee-for-service extraction and CBD oils.

Click here to receive an investor deck and corporate updates

Looking Ahead

Demand for cannabis extracts is expected to soar over the next few years as Canadians embrace vapes, beverages and edibles that became available earlier this year. With its low input costs and in-house extraction equipment, the company is well-positioned to become a leader in the wholesale distribution of food-grade, high-THC cannabis to domestic and international markets.

For more information, visit the company’s website or download their investor presentation.

Disclaimer

The above article is sponsored content. CannabisFN.com and CFN Media, have been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://cannabisfn.com/legal-disclaimer/

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

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.

Network Partners

Follow Us on Social Media

LinkedIn

About CFN Media Group

CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.

Copyright © Accelerize Inc. · All Rights Reserved · Privacy Policy · Legal Disclaimer

loading