Imagine if the entire distribution network supporting Canada’s $9 billion beer industry suddenly disappeared. No more going to the corner store, food market, or nearby government outlet to get your favourite beer. Now, you have to drive directly to small-batch craft brewers. You can only hope that their beer has stayed fresh and that they haven’t run out.
This is the potential chaos confronting Canada’s soon-to-be-legal cannabis market; estimated to be worth $6-8 billion annually (in all aspects) by 2020. The reason: While growers worry about increasing their output and governments haggle about how legal cannabis will be sold, the actual national distribution channel to accumulate, blend, brand, package, and distribute legal cannabis products and accessories nationwide simply does not exist in this country. So when all those eager shoppers start clamouring for cannabis products starting next Canada Day, chances are that many of them will encounter goods of inconsistent quality in short supply — or none at all in rural areas without access to a local legal product.
Now imagine the profit opportunity for a company that solves this distribution issue as cannabis becomes legal in Canada on July 1, 2018. To put it in beer terms, imagine you’ve invested in the company that has amassed and blended beer to a consistent quality standard and volume; branded it, and arranged to distribute it to beer stores and grocers nationwide when Prohibition has finally ended.
This is precisely the cannabis distribution solution that has been devised by North Road Ventures (North Road); a wholly-owned subsidiary of Liberty Leaf Holdings.
Based in the Greater Vancouver area, North Road Ventures is poised to legally distribute cultivated and manufactured cannabis products to licenced retailers, with the goal of expanding into the recreational market as of July 1, 2018.
To make this happen, North Road has an application pending with Health Canada for an Access to Cannabis for Medical Purposes Regulations (ACMPR) license amendment for the sale/distribution of dried cannabis, cannabis oils and other related products containing THC and CBD. For its first year of licensed operations, North Road has specified a secure vault capacity under its license request that would allow the company to legally store up to $6,250,000 in cannabis products at any one time. North Road is a distribution company, and if it turns over its vault capacity just once a month, this firm could generate annual revenues of $75,000,000.
Liberty Leaf Holdings Ltd. (LibLeaf) is a Canadian public company whose focus is to build and support a diver-sified portfolio of cannabis sector businesses. Also based in Vancouver, LibLeaf’s legal cannabis portfolio is growing to embrace cultivation, value-added CBD/THC products, biotech research, and supply chain products within this dynamic consumption sector. The company is listed on the Canadian Securities Exchange (CSE) under the acronym LIB.
“Without a proper national distribution system, Canada’s legal cannabis rollout could result in serious product shortages for consumers,” warned LibLeaf President and CEO Will Rascan, “Worse yet, if consumers can’t get access to legal cannabis products when the law says they can, the black market will fill the gap. That is exactly opposite to what the federal govern-ment hopes to achieve with legalization, and something that the North Road distri-bution model is designed to avoid. That is why it has such profit potential, and why LibLeaf has purchased this company.
The North Road cannabis distribution model brings the same end-to-end discipline and supply chain mastery used by established brands in the food and beer/wine/spirits industries. Under this model, North Road will in-terface with artisan cannabis growers across Canada. The company will then contract sufficient supply to ensure that North Road’s branded cannabis products (including white label products for third parties) can be tested, blended and manufactured to consistent qualities and quantities to meet market needs. (According to the Parliamentary Budget Office, that demand will hit 655,000 kilos of dried cannabis in the first year of legalization alone.)
That’s just the beginning. North Road will also handle the other side of product distribution, ensuring that all li-censed retailers (government, pharmacies, and stores of all sizes) receive the cannabis products they need when required; at reliable quality levels and predictable prices – all supported by a robust online ordering platform.
“We will be a recognized full-service Canadian cannabis distributor, providing end-to-end, full cycle wholesale delivery to the one-step retail storefront customer base,” said Rascan. “As an approved producer under the ACMPR, North Road will apply for an import license, to ensure we always have a fully-tested and warranted cannabis flower/oil supply. This matters, because the predicted Canadian-grown supply of cannabis is hundreds of thousands of kilos below demand.”
For investors seeking to build a solid, growing position in the emerging Canadian cannabis market, choosing a full-market enterprise like LibLeaf is a logical investment. In addition to North Road and its comprehensive distribution model, LibLeaf is seeking similarly high-value properties in other areas of cannabis production and marketing. The company’s goal is to quickly establish LibLeaf in a dominant position with respect to Canada’s legal cannabis market.
“There is tremendous rev-enue growth and profit potential in the Canadian cannabis market,” said Will Rascan. “Through LibLeaf, North Road Ventures has the dis-tribution model to make the business case work.” Learn more at www.libleaf.com.
We are an emerging distributor of cultivated and manufactured cannabis products to licensed legal retailers.