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Emerald Health Expands into Analytical Testing and Import/Export -- CFN Media


Posted on: 07 Aug 18

SEATTLE, WA, Aug. 07, 2018 (GLOBE NEWSWIRE) -- CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article covering Emerald Health Therapeutics Inc.'s (TSX-V: EMH) (OTCQX: EMHTF) recent acquisition of a dealer license from Abattis Bioceuticals Corp. that enables it to compete in emerging market verticals. Canada’s cannabis market is projected to reach more than C$22.6 billion over the coming years, according to Deloitte, driven by the legalization of adult-use cannabis later this year. In addition to cultivation, this growth is fueling many other areas of the industry, including product development, analytical testing, and imports and exports. Investors may want to keep an eye on these areas as potential opportunities ahead.

Licensed Producer vs. Licensed Dealer

Most investors are familiar with Licensed Producers, or LPs, under the Access to Cannabis for Medical Purposes Regulations, or ACMPR. LPs are permitted to cultivate, process, and sell medical (and soon recreational) cannabis into the legal market, as well as export cannabis flower to international markets. However, there are some important limitations to the license that inhibit product development and import/export opportunities.

Licensed Dealers, or LDs, under the Canadian Controlled Drugs and Substances Act step in to fill some of these gaps. LDs are permitted to import and export cannabis oils and resins, as well as prepare the manipulation, formulation, dosage form, strength or package size of cannabis products, including mixtures with other additives, controlled substances, and non-controlled substances. These capabilities make the licenses extremely valuable.

There are less than 50 licensed dealers throughout the country compared to more than 100 licensed producers authorized by Health Canada. Many licensed producers have been acquiring dealer licenses as a way to export higher value medical cannabis extracts rather than just cannabis flower. For example, Canopy Growth Corp.’s Tweed Inc. acquired a dealer license back in December 2016.

Recent deals highlight the value of a dealer license. In May, 2018 Auxly Cannabis Group Inc., formerly known as Cannabis Wheaton, announced the acquisition of DoseCann Inc., a late stage licensed dealer applicant based on Prince Edward Island. The stock transaction carries a price tag of up to $38 million, with a little wiggle room based on milestones achieved.

In June, Aurora Cannabis Inc. announced a proposed stock transaction worth $115 million to acquire Anandia Laboratories Inc. Based in British Columbia, Anandia is recognized as an industry leader, one of the largest and most established cannabis labs in the country.

Emerald Health Acquires a Dealer License

Emerald Health recently became one of the few licensed producers with a dealer license after acquiring the remaining shares of Northern Vine Canada Inc. from Abattis Bioceuticals Corp. for $2 million in cash and $4 million in stock. Northern Vine will continue to operate independently and is committed to serving all of its clients, including patient-growers and licensed producers that could potentially compete with Emerald.

“The acquisition of Northern Vine allows us to leverage its dealer license and research and development facility to advance our research plans to develop cannabis formulations supporting new products for both recreational purposes and to treat a broad spectrum of human conditions and diseases,” said Emerald Health CEO Chris Wagner. “The dealer license would also enable Emerald to cost-effectively source non-dried-flower cannabis products from suppliers in other countries.”

The move follows the company’s initial 53 percent investment in Northern Vine back in November 2017 for $2 million. In May 2018, the company increased that investment to 65 percent for an additional $2.75 million. The final acquisition includes the aforementioned payments, as well as a milestone payment in the form of common shares valued at $4 million if Northern Vine or Emerald receive gross revenue of $10 million from Abattis products.

When comparing the Emerald acquisition with those of Aurora and Auxly, noted above, it looks like Emerald got a pretty good deal. Auxly bought an applicant for a dealer license in Prince Edward Island for $38 million, while Aurora bought a larger established lab in BC for $115 million. Emerald’s price tag of $11 - $15 million for an established lab in the licensed producer mecca of BC offers value pretty much any way you look at it.

Looking Ahead

Emerald Health Therapeutics Inc.’s (TSX-V: EMH) (OTCQX: EMHTF) acquisition of Northern Vine puts it in an exclusive group of licensed producers with dealer licenses. These new capabilities will help supplement the company's existing cultivation operations that include a 50 percent stake in Pure Sunfarms -- and its 1.1 million sq. ft. greenhouse -- and its Agro-Biotech operation with a 75,000 sq. ft. facility.

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

Please follow the link to read the full article: http://www.cannabisfn.com/emerald-health-expands-analytical-testing-importexport/

About CFN Media

CFN Media (CannabisFN) is the leading agency and financial media network dedicated to the global cannabis industry, helps companies operating in the space attract investors, capital, and publicity. Since 2013, private and public cannabis companies in the US and Canada have relied on CFN Media to grow and succeed.

Learn how to become a CFN Media client company, brand or entrepreneur: http://www.cannabisfn.com/featuredcompany

Download the CFN Media iOS mobile app to access the world of cannabis from the palm of your hand:https://itunes.apple.com/us/app/cannabisfn/id988009247?ls=1&mt=8

Or visit our homepage and enter your mobile number under the Apple App Store logo to receive a download link text on your iPhone: http://www.cannabisfn.com

Disclaimer

CannabisFN.com is not an independent financial investment advisor or broker-dealer. You should always consult with your own independent legal, tax, and/or investment professionals before making any investment decisions. The information provided onhttp://www.cannabisfn.com (the ‘Site’) is either original financial news or paid advertisements drafted by our in-house team or provided by an affiliate. CannabisFN.com, a financial news media and marketing firm enters into media buys or service agreements with the companies that are the subject of the articles posted on the Site or other editorials for advertising such companies.  We are not an independent news media provider. We make no warranty or representation about the information including its completeness, accuracy, truthfulness or reliability and we disclaim, expressly and implicitly, all warranties of any kind, including whether the Information is complete, accurate, truthful, or reliable. As such, your use of the information is at your own risk. Nor do we undertake any obligation to update the items posted. CannabisFN.com received compensation for producing and presenting high quality and sophisticated content on CannabisFN.com along with financial and corporate news.  

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/

CONTACT: Frank Lane 206-369-7050 flane@cannabisfn.com GlobeNewswire
globenewswire.com

Last updated on: 07/08/2018

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