- Icon plans to operate in both medical and recreational cannabis markets
- Preparation of 40,000-square-foot resource in Brantford, Ontario, underway
- Recreational marijuana market forecast to record CAGR of 77.9 percent from 2018 to reach $3 billion in 2021
What may be a tough call in horseracing is much easier in Canada’s cannabis market. The odds of choosing both the winner and the second-place finisher in any race – an exacta – are never good, but, for Icon Exploration Inc. (TSX.V: IEX.H), the probability of picking winners in Canada’s cannabis market is decidedly better. In what is a win-win situation for Icon, the company has placed bets on both recreational and medical cannabis. This legal market is growing at double-digit rates, and, capitalizing on that growth, Icon is aiming to create a well-diversified company that produces long-term returns for shareholders. To do so, it intends to be a leading purveyor of medicinal and recreational cannabis, while, at the same time, providing the most comprehensive and customer-centric user experience for both patients and consumers.
It has already embarked on that enlightened mission. Icon’s strategy has begun with a foray into medical cannabis, and it plans to capture and market that theme of wellness and good health garnered from marketing medicinal marijuana as it sets about its recreational cannabis operations. The company is finalizing its acquisition of City View Green (“CVG”), a vertically integrated cannabis company. CVG has submitted an application to Health Canada for a producer license under Access to Cannabis for Medical Purposes Regulations (ACMPR), which is currently in the in-depth review stage.
CVG is in the process of preparing a 40,000-square-foot resource in Brantford, Ontario, about half of which will be converted into a modern greenhouse. Pending receipt of the license, this facility will produce pharmaceutical-grade cannabis. CVG has engaged experienced contractors with extensive experience in the pharmaceutical and medical cannabis space to manage the process. The grow area will have state-of-the-art LED lighting, HVAC and dehumidification systems and automation technologies designed to optimize the quality, safety and consistency of cannabis production. A 4,000-square-foot extraction laboratory is also on the drawing board; initially, it will employ an ultra-efficient CO2 supercritical extraction process and, subsequently, ethanol extraction technology.
Production will be marketed through an associated distribution channel that CVG is in the process of setting up. The company has signed an agreement with a retailer that has applied for 37 cannabis licenses in Alberta. The agreement provides that, on closing, each company will receive an equity interest equal to 19.99 percent of the other. The deal essentially creates a vertically integrated entity, with guaranteed supplies for retailing and a ready market to which production can be dispatched.
CVG believes that it has assembled an experienced team that can deliver on its business plan. The company has secured a master grower with cannabis-industry experience to attend to indoor grow operations and has identified both a quality assurance manager and head of security. CVG has also retained an extraction expert from the Seattle, Washington, cannabis market, who has amassed significant expertise in developing and launching new products from extractions. In addition, the company plans hires with strong experience in the alcohol and beverage industry.
Winning in the Canadian cannabis market should be a piece of cake. The Canadian government projects that 450,000 customers a day will participate in the cannabis market, making recreational cannabis in Canada a $900 million industry. It expects initial market demand to be 100,000 kg, and users are projected to grow by more than a half million within the first three years of legal cannabis sales in the country. Adult-use spending is expected to record a rapid CAGR of 77.9 percent from 2018, reaching $3 billion in 2021.
For more information, visit the company’s website at www.IconExploration.net
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