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LONDON, /PRNewswire/ --
In a matter of weeks, recreational cannabis will be legal in Canada, and pot stocks are on a rampage that's won over even the grizzliest of bears and the most skeptical short-sellers. Mentioned in today's commentary includes: Intec Pharma Ltd (NASDAQ:NTEC), CannTrust Holdings Inc. (OTC:CNTTF), Emblem Corp. (OTC:EMMBF), THC Biomed International (OTC:THCBF), OrganiGram Holdings. (OTC:OGRMF).
Three deals are creating a beautiful set-up for the cannabis market. Two of them will bring cannabis into the mainstream. The third involves one of the largest cannabis companies and a little-known incubator that's seeing a big payday.
The third-largest cannabis company in this equation is Aphria, and the little-known incubator is Scythian Biosciences (SCYB,SCCYF)
Aphria gave Scythian Biosciences 15,678,310 shares of its stock to buy Scythian's incubated cannabis assets. For Scythian, the timing could not have been better. When the deal was agreed upon, those Aphria shares were at CAD $12, worth $193 million.
By the time the deal was closed last week-Aphria shares had spiked to CAD $20, making Scythian's position worth approx. CAD $313 million. And it's Scythian Biosciences' third win-win deal in a row.
Here are 5 reasons to keep a close eye on Scythian Biosciences (SCYB,SCCYF):
#1 One of the Biggest Cannabis Transactions This Year
Aphria gave Scythian Biosciences 15.7 million shares of stock to incubate cannabis assets. That's a 6.3 percent stake in Aphria, arguably the strongest cannabis producer in the world-and it also makes Scythian the largest single Aphria shareholder.
Right now, the market is paying attention to Aphria because it was a good deal for the third-largest cannabis producer, too. They got cannabis assets in three countries in Latin America for CAD $193 million. When Canopy Growth did a similar deal, it got only one country for $290 million. But while the market was busy looking at Aphria, Scythian-a very smart and sophisticated incubator of cannabis assets-is stuffing its war chest.
#2 The Next Big Event Goes Down in Florida
Nailing the incubator move with Aphria for a huge return, Scythian (SCYB,SCCYF) announced it is now shifting focus to the U.S.
The next big thing will come later this month, when it acquires an exclusive medical cannabis license in Florida. That's imminent-and the pipeline has lots more potential.
The U.S. legal marijuana market size was estimated at over $7 billion in 2016. And it's expected to grow at a CAGR of 24.9 percent from 2017 to 2025.
North Americans spent an estimated $53 billion on marijuana (most of it illegal) in 2016, according to ArcView Market Research. When the U.S. side of that market opens up, Scythian (SCYB, SCCYF) plans to be there too.
#3 The Second Cannabis Ship Is Sailing, And It's Bigger Than the First
Already, global legal cannabis sales were expected to reach nearly $146 billion by 2025. And that projection was before Canada voted in June to legalize recreational pot.
The world's investors will focus their attention on this long-maligned sector. And they've already given us a mega-deal glimpse with major alcohol producers scrambling to get on board.
In less than 10 years, the legal cannabis worldwide market could go from essentially zero to $146 billion in sales. Cannabis is one of those "special situation" markets that could have an unusually high upside for those who get in the right deal. That's why the makers of Johnny Walker, Smirnoff and Corona want in so badly. This blows beer away.
#4 Spot On Incubator In The Hottest New Sector
Scythian Biosciences (SCYB,SCCYF) is a credible international incubator. It's also the world's first global cannabis incubator, and they've already made some game-changing deals.
How do incubators make money? They take equity stakes in startups and build them up until they get big enough and successful enough to sell. It's all about building it up fast, for high-profit sale. It's not about going public. Get in, build up, get out, get paid. It's the fast-track cash cow-and in the cannabis sector, it's going at breakneck speed.
The playbook is simple: Scythian Biosciences identifies, acquires and flips key businesses - looking to net a huge profit along the way.
#5 A Killer Team in A $53B/Year Market
When there's someone like Scythian Biosciences' CEO Rob Reid making ultra-rewarding deals, it's enough to get the market excited. Reid is already a leading business figure in Europe's legal cannabis industry.
Chief Medical Officer Michael Barnes is a leading world authority on neurological rehabilitation and founder and president of the World Federation of Neurological Rehabilitation. He was the first doctor in the UK to be granted the ability to issue a medical prescription for cannabis to a child with an ailment.
And most recently, Andrew De Francesco has been added to the Scythian Biosciences board. He's a 26-year veteran of capital markets and has led a string of companies to multi-million-dollar sales. As founder and chairman, he took Dalradian Resources through its IPO in 2010 and it was recently sold for $500 million. He also injected $6.2 million into Aphria Inc. (TSE:APH), a company which is now reaching toward worth of a cool $5 billion.
So, there's a big cannabis player, Aphria, storming the global cannabis scene to investor delight. And then, if investors follow this trail all the way to the incubator, they've got Scythian Biosciences (SCYB,SCCYF) -the world's first global cannabis incubator that has a stellar deal track record right out of the gate.
Other cannabis companies looking to make an impact on the market:
Intec Pharma Ltd (NASDAQ:NTEC): Intec is an Israeli based pharmaceutical company that earlier this year announced an early-stage study testing its painkiller made of natural CBD and THC extracts. This kind of marijuana-based painkiller will become increasingly popular as full-scale legalization takes place.
In August, Intec reported its overwhelmingly positive second-quarter earnings report, with Jeffery A. Meckler, Chief Executive Officer stating, "We made significant advances that position us to achieve a number of important clinical, commercial and corporate milestones throughout the balance of the year and beyond."
CannTrust Holdings Inc. (OTCMKTS:CNTTF) is a cannabis company focusing on the numerous medical benefits of the plant. They offer a number of cannabis-derived products, from CBD and THC pills to actual plant matter.
In September, the company made history with the first approved shipment of a cannabis product to Denmark. The company shipped cannabis oils overseas in a breakthrough deal with its Danish joint venture partner, STENOCARE.
"Thanks to CannTrust's consistent quality and standardized products, we are the first in Denmark to have cannabis oil products approved for the market," noted Thomas S. Schnegelsberg, CEO of STENOCARE.
Emblem Corp. (OTCMKTS:EMMBF) is a leading licensed marijuana producer in Canada. With a number of cannabis-based products, Emblem works closely with the medical community to ensure both patients and physicians have the information necessary to make decisions regarding treatments involving marijuana.
Recently, Emblem completed testing on a new oral extended release product with partner Canntab Therapeutics. With the successful tests, the companies announced that they will be moving forward into clinical trials.
THC Biomed International (OTCMKTS:THCBF) operates as a licensed producer under Canada's Marihuana for Medical Purposes Regulations. It is also engaged in the research & development of the products and services to medical marijuana.
THC Biomed's recently announced a new THC-based beverage, aiming to appeal to a broader range of consumers. John Miller CEO explained, "THC has conducted extensive research on cannabis edibles and beverages and I have found our product to be exclusive in its category."
OrganiGram Holdings. (OTCMKTS:OGRMF): Organigram Inc. is a licensed medical marijuana producer in Canada, while it managed to maintain its production license this year, the company saw its stock price fall somewhat Year-To-Date, but we see strong upside for this stock as the changing Canadian cannabis legislation could give a massive boost to the market. The company specializes in both organic and minerally grown cannabis, and is sure to satisfy the customers' needs.
Recently, OrganiGram entered into an agreement with Canopy Growth which includes distribution and retail services in Newfoundland and Labrador.
By. Charles Kennedy
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Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes that investor interest in the cannabis sector will continue to grow to October 17, 2018 and beyond; that cannabis use and sales will grow as currently predicted; Scythian Biosciences' intended acquisition of various foreign companies and expansion into the US market; that the Aphria stock owned by Scythian Biosciences will retain its current value and that Scythian Biosciences can realize a profit on its sale; Scythian Biosciences' plans to incubate projects in various locations throughout the world; that it could be granted licensable patents; that Scythian Biosciences will get an exclusive cannabis distribution license in Florida; and that it will be able to carry out its business plans.
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