The stakes can be quite, very big’: Saskatchewan’s cannabis market getting serious

The stakes can be quite, very big’: Saskatchewan’s cannabis market getting serious
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Pot, abruptly, is big business — the indications are everywhere you go. But nothing alerts big business as an attempted hostile takeover. Saskatoon-based CanniMed Therapeutics Inc. is urging its shareholders to reject a hostile takeover bet by rival Aurora Cannabis Inc.

The details of this attempted takeover are intricate and there’s reason to belive it could or might not exactly happen. But what’s clear is the fact big money reaches stake with the pending legalization of pot.

Legal container market could be worthwhile $250M in Sask.

“The stakes can be quite, very big,” said School of Regina economist Jason Childs. “If we do start to see the consolidation I’m anticipating in this industry, there will be 3 or 4 players that will [be] very profitable.”

In Saskatchewan exclusively, Childs says, the legal pot market could be worthwhile $250 million per year. Deloitte lately pegged the countrywide market at $23 billion. While CanniMed is currently centered on the medical market — and fending from the hostile takeover — the business is getting into the recreational market, corresponding to leader and CEO Brent Zettl.

“This consolidation is focused on getting located to get into the recreational market immediately with enough inertia that you can get some good shelf space,” Zettl said.

‘We curently have over 200 people working here now. I could expect we are triple next 3 to 4 years –triple that pleasantly.’ – Brent Zettl, CEO, CanniMed Therapeutics Inc.

Zettl is wishing to fight the takeover by Aurora partly by the proposition to obtain The Tragically Hip-backed Newstrike Resources Ltd. — a move Zettl is convinced can make them a push in Canada’s legal container market.

He says that proposal, plus a proceed to continue producing medical cannabis for Canada and abroad, means good stuff for Saskatchewan.

“We curently have over 200 people working here now. I could expect we are triple next 3 to 4 years –triple that pleasantly. Our earnings stream, we live on the right track to be well into $3 billion within seven years,” he said.

Success related to rules: economist

Childs says this jockeying by companies is usually to be expected, but there are a great number of questions in what legal pot can look like — especially in Saskatchewan. He says Saskatchewan is well situated to be always a player available, particularly if the rules are business friendly.

“We’ve got a thing or two choosing us: relatively cheap land, relatively cheap electricity and an extremely positive corporate and business environment in conditions of taxation and rules,” Childs said.

“How successful we could in translating that in to the cannabis market depends a great deal on what the precise regulations appear to be.”

Art cannabis system could emerge

Childs says the new nationwide market is going to be dominated by big players — in the ale world, think of Labatt and Coors. However, depending how the regulations tremble out, you will see room for further small-scale craft manufacturers.

“I expect the forex market to look a lot like the ale market, where we’ve a relatively few national players and incredibly large numbers of small players — which means you wrap up with a art cannabis system,” Childs said.

CanniMed says its show prices would be even higher if wasn’t for the attempted hostile takeover.

In a notice to shareholders released Thursday, the Saskatoon-based medical pot company said its stocks are trading above Aurora’s offer of $24 and may likely be higher if it weren’t for the all-stock hostile bet.

Aurora takes concern with ‘misleading’ information

Aurora officially launched its hostile takeover bet for CanniMed in later November on the problem that CanniMed cancel its prepared acquisition and said its offer will stay up for grabs until March 9.

Cam Battley, professional vice-president of Aurora, said within an emailed assertion that he got issue using what he called “misleading” information related to him in the shareholder notice that he said was removed from context.

He later said in a phone interview that CanniMed’s notice “just reeks of desperation.”

Stock commentary website Citron Research said Thursday that Aurora is “the weakest player in the area,” arguing that the business’s hostile bet for CanniMed implies that the business irresponsibly allocates capital. Citron said Aurora “is spending $600 million on the offer when the obstacles to access are deteriorating.”

Source:- CBC News

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