The cannabis industry is the most rapidly developing industry in the United States and Technical420 has seen more than 100 public companies enter the industry during the past year. These new companies formed in response to both the trend toward more lenient state laws pertaining to some form of cannabis use (either medical-CBD only, medical or recreational) and the evolving public view of the plant. Another factor that has led to more companies entering the industry is that Canada recently legalized medical marijuana at the federal level and created a strict system of regulations and guidelines for consumers and businesses.
These developments have helped expand the breadth of the industry. During the last year we have seen the industry expand in such a way that allows the ordinary person to invest in a cannabis company that does not cultivate or distribute marijuana. Yesterday, we highlighted a few companies that are levered to the growth of the cannabis industry by selling ancillary products and services. Today we are going to highlight two companies that are focused on growing and selling marijuana.
Tweed Marijuana Inc. (TWD) (TWMJF)
Tweed Marijuana Inc. was the first publicly traded Canadian medical marijuana company and the company is the first geographically diversified producer with dual licenses under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR). Through its wholly owned subsidiaries, Tweed and Tweed Farms, the company operates two state-of-the-art production facilities in Ontario and distributes marijuana across the country to patients.
On Wednesday, Tweed announced its fourth quarter financial results for the three month period that ended on December 31, 2014.
- Tweed generated $641,309 in revenue during the quarter at a 36% gross margin, which is up from 23.6% during the previous quarter.
- During 2015, Tweed had sold and shipped over 75,000 grams of marijuana.
- Tweed completed the build out of three additional growing rooms and a laboratory in its 168,000 sq. ft. licensed facility. Tweed expects to see margins improve once the laboratory is approved.
- Tweed saw the average order size and average price per gram increase during December 2014 and year-to-date in 2015
- Tweed Farms is in the middle of enhancing its infrastructure to meet Health Canada’s MMPR specifications. The greenhouse will have approximately 340,000 sq. ft. of low-cost production space and the company plans to add a large-scale processing facility in 2015.
Today, Tweed Marijuana Inc. (TWMJF) announced that they are installing a state-of-the-art aeroponic system developed by Texas -based Indoor Harvest Corp. (Indoor Harvest) at its Ontario facility. The system is the basis of a Cannabis Production Pilot Agreement between the two companies. This system is supposed to increase production yields while lowering production costs. The companies will jointly own any resulting intellectual property and Tweed will have exclusive licensing rights within Canada and all jurisdictions excluding the United States. Aeroponics and vertical farming have been gaining worldwide recognition and this test will be the first of its kind.
Alternative Fuels Americas (AFAI)
Alternative Fuels Americas (AFAI) is focused on capitalizing on the rapidly developing United States cannabis industry. Through its subsidiary, Marijuana Holdings Americas, the company owns the first legal marijuana dispensary to be operated by a U.S. publicly traded company. AFAI is focused on securing medical and recreational marijuana licenses, acquiring existing Cannabis production/sales operations and evaluating related business opportunities. Due to opaque regulatory environment, there are only a few publicly traded U.S based companies focused on growing and selling marijuana.
On February 3, 2015, AFAI announced that the board of directors authorized a name and trading symbol change to more accurately reflect its ongoing business focus and operations. The company expects to announce the new name and symbol within the next 2-3 weeks after receiving confirmation from FINRA.
On July 3, 2014, AFAI opened its first Kaya Shack dispensary in Portland Oregon. The company disclosed in its most recent quarterly report that they processed over 1,000 medical marijuana transactions through November 15, 2014 and had an initial patient base of 400 people.