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The cannabis market is rapidly maturing in Canada, where analysts project the market could reach C$22.6 billion over the coming years. While prices remain high at the moment, there’s no doubt that cannabis flower and concentrates will start to commoditize and prices will fall over the coming years. The best investments are companies that are well-positioned to ride out these trends and maintain competitive barriers and profit margins.
Harvest One Cannabis Inc. (TSX-V: HVT) Senior Vice President of Corporate and Public Affairs, Will Stewart, recently sat down with CannabisFN to discuss the evolving industry and what sets the company apart from the hundreds of other licensed producers.
Canada’s Built-in Advantage
Canada has become the de-facto leader in cannabis following its decision to legalize adult-use and medical cannabis on a federal level—becoming the first G7 nation to do so. Unlike the United States, Mr. Stewart points out that most Canadians welcome government regulations and these regulations are quickly setting a new standard that could eventually become the industry guidelines for other countries.
Given these dynamics, Canada’s licensed producers are well positioned to become global players. Canopy Growth’s recent acquisition of Acreage Holdings underscores these trends, but at the core, the biggest advantage enjoyed by licensed producers is their expertise in growing high-quality product under tight regulation. This skill could become invaluable as other countries begin the legalization process and open the door to cannabis opportunities.
That said, Mr. Stewart points out that there are still some challenges facing Canada. The country continues to have tight regulations on branding and packaging, which makes it difficult to build a consumer following. The country’s upcoming elections in October could also impact the industry if the Conservative government regains control. Mr. Stewart suggests that it’s up to the industry to remain above-board and avoid politicization ahead of the elections.
A Global House of Brands
Harvest One is a Canadian licensed producer, but unlike many of its peers, it’s not trying to become the largest producer. Instead, the company has focused its efforts on building a global house of brands that consumers know and trust. The company plans on continuing to build high-quality recreational cannabis brands through its United Greeneries subsidiary, but it’s true potential is much broader and focused on branding and distribution.
The company’s Swiss subsidiary, Satipharm, is already manufacturing and marketing cannabidiol (CBD) based Gellpill® products across the European Union and Australia. At the same time, the company’s Dream Water liquid sleep shots are already distributed in about 30,000 stores across the United States and Canada. The company also recently acquired Delivera, whose topicals and creams are already available across Canada.
The company plans to infuse cannabinoids, namely CBD, into these products that already have widespread distribution to become an overnight leader in the health, wellness and beauty segments of the cannabis industry. While Canada’s branding regulations remain strict at the moment, there’s a near-term opportunity to build these brands in the United States, where the Farm Bill opened the door to CBD products without packaging limitations.
Harvest One Cannabis Inc.’s (TSX-V: HVT) focus on building a house of brands could help insulate it from the commoditization affecting other licensed producers. With an existing portfolio of consumer brands, the company hopes to infuse these products with CBD and other cannabinoids and leverage existing distribution channels to become an overnight market leader in the health, wellness and beauty industry subsets.
The company’s near-term focus is on infusing its existing brands with cannabinoids, completing the construction of its projects in Duncan and Lucky Lakes, and getting its new greenhouse license in Ontario.
For more information, visit the company’s website at www.harvestone.com.
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