SEATTLE, WA / ACCESSWIRE / June 23, 2015 / With estimates from Health Canada that their medical marijuana (MMJ) market is slated to grow at a CAGR of 27.4 percent through 2024 as patients use cannabis to treat everything from glaucoma and pain relief to cancer, MMJ is one of the fastest growing markets in North America, on par with even Big Data and Cloud Computing. In the U.S., recent analysis by ArcView Market Research indicates 74 percent YOY growth from 2013 to 2014 for legal marijuana and projections suggest that the space could grow 300 percent by 2019, from $2.7 billion last year, to over $10.8 billion.
One of the first movers in the Canadian MMJ market, Enertopia Corp. (OTCQB: ENRT) (CSE: TOP), which got in back during November of 2013 and was subsequently tapped by numerous third party players to JV, has witnessed a great deal of regulatory confusion first hand as it went about the arduous business of securing licensed producer status. Therefore the company was not caught flat-footed by the recent announcement from Canada's Minister of Health under the Harper government regarding the coming into force of amendments to their Marijuana for Medical Purposes Regulation (MMPR) program, requiring quarterly reports to healthcare licensing bodies on how healthcare practitioners authorize the use of marijuana, as well as warnings disseminated to industry entities about "legitimizing and normalizing the use and sale of marijuana." The simple truth is that since the Ontario Court of Appeal opened the floodgates to MMJ back in 2000, the only thing consistent about Canada's approach has been a constant argument between the courts and governmental regulators.
Two weeks ago, the Supreme Court of Canada unanimous rebuked the official government position banning registered patients from consuming their medicine in edible forms like baked goods or oil. A ruling which boldly declared that it is not a crime for such patients to use non-dried forms of MMJ, resonating with the commonly established idea that edibles are healthier and easier on patients than smoking. For a company like Enertopia, which is still currently evaluating not only the commercial potential of MMJ edibles, as well as food and beverage products that contain drug/nutraceutical bioavailability enhancing ingredients, this landmark ruling is of great significance to potential future operations. For outfits like Canadian marijuana-infused edibles developer, Nutritional High (OTCQB: SPLIF), which is gearing up for retail in the U.S. MMJ market, the Supreme Court ruling similarly represents a potential future boon, as it now seems evident that eventually sizeable edibles market could open up north of the border.
According to data compiled by VisualCapitalist, there are currently over 50k registered patients under Health Canada's MMPR program, and roughly 80 dispensaries, a whopping 566 percent growth from just two years prior. However, out of some 1.3k production license applications, Health Canada has issued only 19 full licenses and 6 cultivation-only licenses, despite over 59 percent of Canadians now in support of full legalization (Angus Reid Global, 2014). This means that only a tiny handful of outfits have had access to this end of the business, like pharmaceutical-grade focused Bedrocan Cannabis Corp. (OTC: BNRDF), which exports to Canada and has been in the sector since 2003 under contract with the Dutch Ministry of Health, as well as OrganiGram Holdings Inc. (OTCQB: OGRMF), a producer of condition-specific MMJ.
Enertopia remains enthusiastic about the future of both Canadian MMJ and the related edibles market, but recently made the strategic decision to discontinue actively pursuing MMJ producer status via its 30k square foot Burlington JV with Lexaria Corp. (OTCQB: LXRP). The company has opted to maintain the Master JV Agreement with Lexaria (whereby the company owns one million shares in Lexaria) and sign a binding LOI to sell its 51 percent stake in the Burlington JV. This sets the company up for a stronger working capital position, with some $750k in potential milestone payments, pending the facility's potential future license under MMPR, a process which is in the Enhanced Screening Check.
Enertopia also moved to improve share dilution with the mutually agreed upon cancellation of the 6.4 million shares held in escrow with respect to the MMJ licensed production JV between the company and The Green Canvas. After having studied the evolution of the Canadian MMJ market up close for some time now, Enertopia has concluded that raising capital to push projects forward in the current environment does not make the best sense at this particular juncture. Even though companies like Galileo Life Sciences (OTC: MDRM) have managed to navigate Health Canada's stipulations a bit farther, with the recent announcement that they are nearing MMPR licensed producer and distributor status, Enertopia sees the handwriting on the wall after this latest conflict between the federal government and the courts. With only 1.9 percent of submitted MMPR production licenses approved by Health Canada thus far and only about 1.4 percent being full licenses, Enertopia isn't waiting around for the market to mature, the company intends to redirect efforts toward immediately accretive revenue generating activities.
This shrewd move by Enertopia to close down unproductive aspects of their MMJ-focused operations, until such time as the quagmire created by the Federal government and the Courts is more satisfactorily resolved, is empowered by the recent commercial success of the company's specially formulated V-Love(TM) for Women desire gel. The company owns 100 percent of this exciting new women's lubrication product and Enertopia is wasting no time branching out into revenue-generating retail sales with the recent announcement that the product will be carried in London Drugs, which has 79 retail locations across Western Canada. This retail push also preps the company for similar opportunities in already-legal CBD products, whose antioxidant and other beneficial properties could lead ENRT to a growing portfolio of alternative health and wellness sector offerings.
The $20 billion plus sexual wellness industry is forecast by TechNavio to grow at a CAGR of seven percent over the next five years with the lubrication segment alone currently worth around $1.2 billion. V-Love has already exceeded early sales expectations in its initial rollout month, with over 150 units sold, despite a limited retail presence. V-Love's overwhelmingly positive reception from various health and wellness conferences, as well as events, combined with a partnership between Enertopia and sexual health guru Maureen McGrath, who hosts the popular Sunday Night Sex Show on Vancouver, CKNW, has placed the product prominently in the consumer's consciousness.
V-Love is a truly innovative formulation in a space currently dominated by mostly run-of-the-mill personal lubrication brands like Reckitt Benckiser's (OTC: RBGLY) K-Y Jelly, which was developed in 1904 and previously belonged to Johnson & Johnson (NYSE: JNJ). V-Love uses such product ingredients like Niacin (Vitamin B3), L-Arginine and lactic acid. V-Love has been specifically crafted to have a PH of 4.1 that falls into a healthy woman's vaginal PH of 3.5 to 4.5.
V-Love is more than your everyday glycerin and water-based lube; it is designed to enhance ones sexual pleasure by lubricating and providing a feeling of natural vaginal moisture and it represents the first of what could be many more commercial products developed by Enertopia for the $3.4 trillion (Global Wellness Institute) and growing global alternative health and wellness market. A market which is already three times the size of the pharmaceutical industry.
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SOURCE: Cannabis Financial Network