Delta 9 Cannabis: Potentially Undervalued in a Rising Market -- CFN Media

SEATTLE, Jan. 30, 2018 (GLOBE NEWSWIRE) -- CFN Media Group ("CannabisFN"), the leading creative agency and media network dedicated to legal cannabis, announces publication of an article discussing Delta 9 Cannabis Inc. (TSX-V:NINE), an existing licensed producer of medical cannabis under Canada’s ACMPR program, and its potentially underappreciated place in the burgeoning cannabis industry. Its unique technology and distribution partnerships set it apart from many competitors. More importantly, the company is considered the front runner for a lucrative retail license in Manitoba; one of only four licenses in a market of $300 to $500 million annually.

Rising Tide Lifts All Boats

Canada’s cannabis industry is projected to reach C$22.6 billion over the coming years, according to Deloitte, driven by the legalization of adult-use cannabis nationwide. According to current government estimates, the recreational market is expected to go-live before July of this year once the country’s various provinces complete their implementation plans. These plans cover things like where and how product will be sold.

With current production, funded capacity expansion, and potential yield improvements, PI Financial Corp. believes that there will still be a 187,885 kilogram shortfall in production capacity by next year. Many licensed producers have looked towards mergers and acquisitions as a way to expand capacity rather than focusing exclusively on organic growth. In fact, EY found that 87 percent of executives from LPs expect M&A as the recreational market grows.

In addition to the favorable supply-demand economics, the launch of several new cannabis-focused exchange-traded funds (“ETFs”) could increase investor appetite for publicly-traded licensed producers. The Horizons Marijuana Life Sciences Index ETF has already drawn in more than $700 million in net assets while the ETFMG Alternative Harvest ETF has attracted over $400 million in net assets.

Delta 9 Appears Underrated

Delta 9 Cannabis is a licensed producer of medical marijuana under the Canada’s ACMPR with an 80,000 square foot production facility in Winnipeg, Manitoba. It has room to expand to 835,000 sf in existing buildings on site. Last November, the company received conditional approval from Health Canada for the expansion of these facilities to cover an additional 143 of its self-designed “grow pods”. Each of these pods could produce an average of 31.5 kilograms of medical cannabis per year, according to management. The company is also fully funded to build out 600 of these grow pods, with the ability of producing a whopping $170 million in revenue at full scale.

But the real driver of Delta 9’s value could be coming up very soon. In addition to its cultivation operations, the company submitted a joint application with Canopy Growth Corp. to become a retail operator in Manitoba following its prior deal to distribute products through the curated CraftGrow line on Tweed Main Street’s online store. The move comes shortly after Manitoba introduced legislation last year that enables private businesses to sell recreational marijuana when Canada’s adult-use market launches.

Despite its expanding production capacity and distribution agreements, the company’s stock has languished compared to the rest of the cannabis sector. The good news is that investors have an opportunity to purchase the stock at a more reasonable valuation than other licensed producers that have seen a significant increase in price over the past year.

Please follow the link to read the full article:

For more information, visit the company’s website at

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Frank Lane