- A 1,000-fold increase in the Canadian cannabis oil extraction market is expected, with growth from C$1 million in 2015 to an expected C$1.7 billion by 2020
- The Canadian market is expected to see a conversion rate of 45 percent, which is similar to trends in Colorado, based on a Mackie Research Capital study
- The Government of Canada expects to fully legalize marijuana nationwide on or before July 2018
Investors have had their eyes on Algae Dynamics Corp. (OTCQB: ADYNF), which has partnered with various Canadian universities (including the University of Waterloo and Western University) for access to research and to boost its cannabis extraction expertise. The company is now positioned to serve the medical and recreational marijuana markets. However, many are surprised to learn that, as legalization of recreational marijuana is set for July 2018, Charles Sousa, Ontario’s finance minister, has warned of a possible supply shortage.
The company has had at the core of its product development strategy the extraction of Omega-3 fatty acids from certain strains of algae with high concentrations of DHA, which is an important nutrient for brain, eye, and heart health, as well as the creation of various associated nutraceutical products. In light of the many demonstrated health benefits of other botanical oils, most notably cannabis oil, the company has developed a strategy aimed at developing new products combining the health benefits of algae and cannabis oils.
In a Bloomberg Politics article (http://dtn.fm/r2Ne5), an analyst suggested a supply shortage could give the government an excuse to delay the country’s marijuana program, even as the cannabis oil extraction market grows toward the billion-dollar mark. Government officials, however, have made it clear they want a supply that’s able to accommodate demand to bring down organized crime and illicit drug use. The initial plan is expected to allow sales of cannabis online and via mail.
The reasons for a potential shortage include difficulty in stocking enough inventory nationwide, expanding patient lists, and producers selling out of strains or refusing to take on new clients. In Canada, the number of registered medical marijuana users tripled in one year, and the medical market is already seeing shortages. Health Canada announced in May that it would expedite the license approval process. New licenses have been issued, but it can take a year or more for businesses to build up production. Recent studies have shown a 45 percent conversion rate (users of dry marijuana switching to cannabis oil products) in Colorado, which is anticipated in Canada as well. Licensing and expertise will be needed to meet this demand.
Despite uncertainties, demand and research and development in the cannabis market continue to surge. As Algae Dynamics aims to be the leader in cannabis oil research in Canada, it continues to pursue the compound as a treatment for conditions such as colorectal, breast, pancreatic, and prostate cancers, and for other conditions such as post-traumatic stress disorder, schizophrenia, anxiety, and depression. The company itself will submit a licensing application to Health Canada, so it can produce medical marijuana and sell cannabinoid-derived products. Its knowledge and cultivation know-how enables production of an algae biomass that is free of contaminants and high in healthy Omega-3 fatty acids.
The management, fundraising, process, and commercialization experience of the Algae Dynamics team has positioned the company for rapid growth. Despite the threat of a legalized marijuana supply shortage, the company is working hard with researchers, developers, and investors in a market that encompasses all of Canada and that extends well beyond the country’s borders.
For more information about the company’s research efforts and development process, go to www.AlgaeDynamics.com
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