"Green-Rush" Medical Marijuana Companies Not All Created Equal

BC Chronic Brings 60 Years of Cannabis Cultivation Expertise

| Source: Anexco Resources Ltd.

VANCOUVER, British Columbia, May 21, 2014 (GLOBE NEWSWIRE) -- Health professionals already recognize the remarkable ability of medical cannabis to relieve chronic pain and some of the worst symptoms of illnesses such as cancer, AIDS, multiple sclerosis and Crohn's disease. But a growing body of research also points to the power of cannabis to prevent illness and preserve peak health by optimizing the body's endocannabinoid system, which regulates and maintains the stable internal environment of the human body.

The health case for cannabis is gaining support from doctors as prominent as Sanjay Gupta, the Emmy-award winning neurosurgeon and chief medical correspondent for CNN. In 2013 and earlier this year, Gupta co-produced two documentaries on the medical benefits of marijuana titled Weed and Weed 2. Increasing awareness of the benefits could prompt more doctors to prescribe cannabis for their patients and could fuel consumer demand. The vitamin and nutraceutical supplement market in the United States is currently worth an estimated $20 billion.

Canada's potentially huge medical marijuana market has been labeled "the Green Rush," and Vancouver-based BC Chronic Inc. is pursuing a strategy that could leave even its largest competitors green with envy.

For context, the space has drawn serious investor attention as noted by impressive market activity. A few standout examples:

Affinor Announced its plans to move into the space and has hit a recent 52-week high of $0.52 likely as a result that Vertical Design is taking a controlling (10%) stake in AFI. Affinor has 58,188,898 shares outstanding with a market cap of $28,513,000 (May 20, 2014).

Tweed listed as the first Medical marijuana producer on the TSX.V, trading at $2.90. The Company just closed a $15 million bought deal financing. Tweed has 39,943,991 shares outstanding with a market cap of $115,840,000 (May 20, 2014).

Supreme Pharmaceuticals, trading at $0.115, has announced two acquisitions of growers in BC and Ontario in the last month. As a result, shares traded in the period of May 11-15 exceeded 60 million in Canada and the US. Supreme has 144,812,362 shares outstanding with a market cap of $16,653,000 (May 20, 2014).

In stark contrast BC Chronic - Anexco (CSE:AXO) only has 13,839,582 shares outstanding, and is trading at $0.20 resulting in a market cap of $2.6 million (May 20, 2014). This places Anexco in an enviable position of having one of the tightest structures in this space.

BC Chronic – a wholly owned subsidiary of Anexco Resources Ltd. – recently concluded a letter of intent (LOI) to acquire the operations of an MMAR (Marijuana Medical Access Regulations) licensed medical cannabis producer in British Columbia's interior. The agreement will allow BC Chronic to apply for a Licensed Producer designation from Health Canada, and gives it control of a state-of-the-art facility that already meets most of the standards set out in the new federal Marijuana for Medical Purposes Regulations (MMPR).

The operation is capable of producing 2,500 kilograms of high quality biopharmaceutical-grade medical cannabis annually. This production capacity translates into $14.7 million when calculated at $6 per gram. "This acquisition is a very important step for the company and its shareholders," said Anexco president Michael Martinz. "I welcome this group of trusted and experienced colleagues to become part of our cannabis 'dream-team.' Together, using our combined talents and this facility, we will be able to produce industry leading medical cannabis for clients at the most affordable prices possible."

BC Chronic has assembled an exceptional team with a track record for successful start-ups, brand creation, and more than 60 years of combined cannabis cultivation expertise. "I am very excited to be involved in a potential paradigm shift in the way people look at the health benefits of marijuana," said Martinz. "These are very exciting times."

In the late 1990s, Martinz was a key figure in the creation and development of one of Canada's first industrial hemp companies. His record of success as an entrepreneur spans a range of industries, including the resource sector, agriculture as well as high-tech, manufacturing and alternative energy. In the medical cannabis field, he is well known as a co-developer of the Centurion machine, a revolutionary cannabis trimming and processing device now sold worldwide. CEO Rudy de Jonge has more than 25 years of experience in international finance and corporate development. A number of the companies he has founded and/or managed have achieved high market valuations, ranging from several million to more than $100 million.

Health Canada estimates the country's medical cannabis market could reach 400,000 registered patients and $1.3 billion in annual sales by 2024. In the United States, the legal market for medical and recreational cannabis has already surpassed that mark, totalling about $1.53 billion, according to ArcView Market Research, a San Francisco-based investor group focused on the marijuana industry. ArcView estimates the U.S. market could grow to $2.57 billion by the end of 2014, led by Colorado with $802 million in yearly sales.

The value of the Canadian cannabis market could be much greater if Canada pursues a commercialization policy. The Liberal Party of Canada under leader Justin Trudeau has proposed commercializing the marijuana market if the party wins the 2015 federal election. The size of the Canadian commercial cannabis market is estimated to be 800 million grams per year, valued at $4.8 billion at $6 per gram.

BC Chronic is convinced it has a clear competitive edge. Martinz says British Columbia is associated with the best quality medical cannabis in the world. And he predicts that the uniform quality and convenience offered by licensed producers like BC Chronic will ultimately win over health-conscious patients, including home producers. "In the same way that most people don't brew their own beer or wine," he says, "there's a large group of people who don't have the technical expertise or the time or the space to grown their own medical cannabis."

As the company grows, BC Chronic plans to develop spinoff products such as cannabis ointments and edibles, as well as a seed production and distribution business. It also plans to explore international production opportunities, beginning with the U.S. states of New York, Alabama, Alaska, Florida, California and Oregon, where public plebiscites on medical or commercial cannabis production are being considered. BC Chronic also has potential opportunities to sell consulting services or to form joint ventures related to planned production facilities in Uruguay and Argentina.

To develop multiple streams of revenue, the company is researching the viability of launching its own BC Chronic physician referring dispensaries. It is currently searching for possible locations in British Columbia.

BC Chronic recently participated in the successful Green Rush Financial Conference in Vancouver, B.C. "In my 25 years of public market experience," said de Jonge, "I have never witnessed such excitement at a trade show."

BC Chronic has 13,839,582 shares outstanding and is trading at $0.20 with a market cap of $2.6 million.

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Anexco Resources Ltd. (CSE: AXO)