Maple Leaf Green World’s (CVE: MGW) (OTC: MPEFF) recent signature of an agreement to lease Woodmere Nursery’s 7-acre Telkwa, B.C. greenhouse facility (with an option to purchase the entire facility) has catapulted the company to the forefront of the rapidly emerging Canadian medical cannabis (MMJ) space.
The Telkwa nursery has the potential for expansion of production capacity from the currently leased 80k square feet to an impressive 300k square feet plus. With a total of 52 separate, polyethylene-clad greenhouses on-site, the Telkwa facility gives Maple Leaf Green World a serious volume advantage over other market entrants when it comes to production scale, placing the company’s initial 7,000 KG (15.4k pounds) production target well within their striking distance. In addition, the various greenhouses have a number of features which lend themselves naturally to maximizing cultivation of tetrahydrocannabinol (THC) and cannabidiol (CBD) rich strains, from per-greenhouse environmental computer controls and an entire acre of greenhouses that have a stadium-like retractable roof system, to another acre of easily-expandable greenhouses that are gutter-connected. The 40k square feet of facilities at Telkwa are equipped with blackout curtains as well, making them ideal for inducing timely bud set and reducing heat consumption, allowing the company to max out yields in the growth cycle.
With around 50 different strains in the company’s initial target selection, the separate greenhouses at Telkwa fit MPEFF’s production strategy like a glove. Key cannabis strains like Charlotte’s Web, which recently has gone viral in the media for its high-CBD content being used to treat a young epileptic girl named Charlotte with amazing results, represent a lucrative and as yet underserved market, largely due to historical lack of data and analysis, as well as regulatory obstacles. CBD derived from such strains as Charlotte’s Web and others has been identified in contemporary research studies as having a demonstrably significant impact in a whole slew of indications, safely and effectively treating pain associated with various conditions and even helping to inhibit the formation or spread of cancer cells.
For example, treatment for neuropathic pain associated with conditions like fibromyalgia, as well as treatment for the broad-spectrum effects of other neurological disorders like ADD/ADHD, multiple sclerosis, and epilepsy, are now also firmly in CBD’s wheelhouse. MPEFF’s business model lends itself readily to a growing end market of biotech developers focused on cannabis-based cancer treatments such as Nuvilex, Inc. (OTC: NVLX).
Maple Leaf Green World intends to be the leader in growing safe, pharma-quality products, with production costs that result in an excellent return on investment. This can be achieved by integrating knowledge, experience and available environment with a product that registered clients will choose. It should be noted that coniferous seedling growing is highly analogous to the marijuana industry, as in both cases the emphasis is on producing extremely healthy buds, which have enjoyed the proper environmental factors at the right times during cultivation, thus ensuring an optimal biological result.
Such experience and technical proficiency is a solid indicator to investors about the operational potential of the company and its ability to achieve the goal of becoming an MMPR licensed producer. The vast cultivation environment design and horticultural experience of the MPEFF team, led by 30-plus year veteran master horticulturalist, Mr. Joe Wong. (It is important to note that of the 30 plus years of growing greenhouse crops, Joe has spent 29 years of those years at the Telkwa Operation. Alongside Joe will be a key grower who has been growing Cannabis under the MMHR program since its inception. This additional expertise virtually guarantees that they will be growing safe and “fit for purpose” pharma-grade products.
Mr. Wong, Director of the company’s Board and VP of Operations, recently sat down with Cannabis Financial Network’s Mike Elliot for an in-depth interview, which can be viewed by playing the video below. Wong possesses an impressive pedigree that is grounded in production and research.
Wong managed the design and construction of the initial greenhouse facility at Telkwa, later expanding the production footprint from 2.5M containerized seedlings to now handling over 12M seedlings annually. Wong’s expertise in designing cultivation environments that are optimized for maximum yield and plant integrity speaks volumes about where MPEFF is headed, as they already possess the kind of controlled agricultural technology know-how that companies like Terra Tech Corp. (OTC: TRTC) stake their entire bottom line on being able to sell to competing cultivators.
The success of growing quality reforestation seedlings for 29 years at economical prices, especially considering the fact that in the last 27 years, no pesticides were used, is thanks to the implementation of a robust Quality Assurance program that monitors all biological processes from the seed through to shipping product. This highly successful Quality Assurance program will be continued with MPEFF’s production. Maple Leaf Green World will use the best technology available to monitor growth and THC/CBD levels. To achieve the appropriate targets, MGW will actively glean market data directly from their user base via customer satisfaction surveys.
Changes to the MMJ regulatory environment in Canada have opened the door to commercial suppliers in recent years, as Canadian court decisions have prompted Health Canada to do regulatory reform that is designed to make dried marijuana for medical purposes readily available, being produced and distributed as much as possible in the same manner as medication. The new Marihuana for Medical Purposes Regulation (MMPR) licensing system for commercial producers allows companies like MPEFF to grow rapidly in this nascent yet booming industry. Health Canada even acknowledged in their 2012 report that registered users generally disliked the application process, as well the fact that only a single strain was available via the sole Health Canada-contracted producer, Prairie Plant Systems, which was also only able to handle a small percentage of the patient market and now must compete for market share. Under the new regime, the remainder of medical marijuana users who obtained supplies via Personal Use Production License (PUPL) or Designated Person Production License (DPPL), instead of via Health Canada contracted producer Prairie Plant Systems, must now buy directly from commercial producers in accordance with the strict new regulations, but will only require a signed document from a health care practitioner to do so.
PUPL/DPPL hazards cited by Health Canada amid the new regulatory reforms, ranging from electrical and chemical dangers at private residences to the more obvious law enforcement-related diversion problem (which creates a large, problematic reseller black market), have broadly reinforced the new trend towards creating a structured commercial supplier market. The MMJ market stands at around $1.2B or more annually in Canada alone (on baselines of only 1 gram per patient, per day, at around the relatively conservative price of $7.50 per gram), according to a recent report by notable Toronto-based research firm and full service brokerage, M Partners. First mover advantage for new licensees is huge here and one need only look at the $100M-plus market cap on some of the first players in the space, like Tweed Marijuana Inc. (CVE: TWD) (OTC: TWMJF), to get a sense of the real potential upside for licensed commercial MMJ producers.
While MPEFF is still technically in the MMPR application process, management has already run the security checks that stop most applicants and they are confident that they will receive Stage 1 approval within the next few months. Management also feels the remaining stages should be pretty straightforward given the company’s existing access to the equipment and facilities necessary to produce medical-grade cannabis in Canada.
To learn more about Maple Leaf Green World (CVE: MGW) (OTC:MPEFF) and receive ongoing updates, please visit: http://www.cannabisfn.com/mdc/maple-leaf-green-world/
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