Following the legalization of cannabis derivative products in Canada, we have seen several leading US cannabis brands announce agreement to expand into this market.
The legalization of cannabis derivative products in Canada is referred to as cannabis 2.0 and this is a vertical that is expected to be a major growth driver for the entire Canadian market. When it comes to the rollout of the cannabis 2.0 market, Health Canada dropped the ball and put significant barriers in place for companies that are trying to capitalize on the vertical.
Over the next year, we expect companies to report increasing revenue from the cannabis 2.0 vertical and this is a trend that we are following. Although the barriers that Health Canada put in place stunted the growth of the vertical, we expect some of these restrictions to be lifted in the near future and this could prove to be a major catalyst for growth.
Today, we want to highlight 3 Canadian cannabis companies that have formed strategic partnerships with leading US brands. Over the long term, we expect the agreements with leading US cannabis brands to play an important role in growth and in how these companies capture market share in Canada.
Indiva: Selling a Leading US Edible Brand Across Canada
Indiva Inc. (NDVA.V) (NDVAF) has surprisingly been a leader in the Canadian cannabis 2.0 market and has benefited from having a strategic relationship with Wana Brands, the largest cannabis infused product company in the US.
The relationship with Wana Brands represents a key growth pillar for Indiva and we are bullish on the amount of value that can be generated through it. During the last quarter, Indiva has expanded the number of provinces that it is selling Wana Brands products through and we expect this trend to be a catalyst for growth.
Earlier this week, Indiva reported a major development and announced that the first three flavors of Wana™ Sour Gummies have been shipped to Alberta, Saskatchewan, and Yukon Territory. We are favorable on how the company has been able to enter new markets and are bullish on the trend.
The move into Alberta, Saskatchewan, and the Yukon Territory was reported one week after Indiva shipped Wana™ Sour Gummies to Briitsh Columbia. We believe that the management team is creating a track record of execution and find this trend of the utmost importance.
According to Indiva Presidnet and CEO Niel Marotta, Wana™ Sour Gummies are gaining significant traction less than one month after the brand was launched. The company has seen a steady increase in popularity for the product line and this is a trend that we expect to support revenue growth in the current and future quarters.
Namaste: A Cannabis 2.0 Story that is Flying under the Radar
Namaste Technologies (N.V) (NXTTF) is another leader in the Canadian cannabis 2.0 market and has benefited from the formation of a relationship with Ignite International (BILZ.CN). The company has also entered into an agreement to sell Indiva products on its CannMart platform and this is a trend that we continue to follow.
CannMart is a wholly owned subsidiary of Namaste and we are favorable on the amount of value that is associated with the platform. A few months ago, CannMart was issued an exclusive license from Ignite to utilize certain brand trademarks on cannabis-based products for sale in Canada.
Ignite is a US cannabis brand that was founded by Dan Bilzerian who has a massive following on social media and is followed by more than 50 million people. Dan started a cannabis brand to capitalize on his following and we are favorable on the amount of value that can be created through the relationship with Namaste.
Although Namaste has reported several major developments so far this year, the trend has been to the downside and this has surprised us. We believe that the market needs more clarity as it relates to how Namaste is capitalizing on the Canadian recreational cannabis market and believe that the opportunity is flying under the radar.
dosist: Executing on the Canadian Cannabis Market
dosist is a leading US cannabis vaporizer brand and is best known for being a disruptor in the health and wellness industry. The product provides consumers with a specific dose of cannabis and the technology that supports the brand has made it one of the top selling products in California.
A few weeks ago, dosist announced an exclusive partnership with Medical Cannabis by Shoppers Inc. to supply its innovative dose-controlled cannabis products. Under the partnership agreement, Shoppers will offer patients eight dosist product formulations that deliver a precise balance of cannabidiol (CBD) and tetrahydrocannabinol (THC) to provide targeted results, as well as three high potency THC-plus formulas.
The formulas that will be sold on Shoppers are administered via dosist’s proprietary inhalable devices and it will be the only precision dosing inhalable products that are offered on the Medical Cannabis by Shoppers platform. We expect the products to gain traction in Canada and will monitor how the partnership benefits both businesses.
A primary reason to explain why dosist is a great fit for Shoppers is due to the vaporizer brand being one of the only companies in Canada that posts all of its formula batch tests online, allowing patients to see that the products they are inhaling are natural and contaminant free.
dosist has established itself as one of the top selling vaporizer brands in California, which is considered to be the largest legal cannabis market, and we are bullish on the potential growth opportunity for the business in Canada.