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CanniMed Has Rallied 30% Since Reporting Earnings In June



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After CanniMed Therapeutics (CMED.TO) reported better-than-expected second quarter financial results, the shares recorded mixed movements. CanniMed has been one of the top performing marijuana stocks since then and the share up almost 30% since June 15th.

CanniMed is focused on the Canadian medical marijuana market with its go to market strategy of physician education and significant investments into alternative delivery formats. The company has established itself as a proven supplier of high-quality medical marijuana and was the sole supplier of medical cannabis under the previous MMAR program and was the first to be awarded an LP license under the MMPR (now ACMPR).

Benefiting from a Trend Toward Smokeless Marijuana Products

CanniMed produces cannabis in a GMP compliant facility and offers a diverse product line. The company produces and sells seven strains of dried cannabis. It also provides patients with three different varieties of cannabis oils.

We are favorable on the company's focus on the cannabis oil market and CanniMed has already been benefiting from this focus. In the second quarter, cannabis oil accounted for almost 50% of total revenues.

The company was one of the first licensed producer to receive a license to sell cannabis oils from Health Canada and CanniMed's plans to release its gelcap product soon.

Focused on Developing New Innovative Products

The trend toward smokeless marijuana products continues to increase and CanniMed has been an earlier adopter to this.

CanniMed said that its gelcaps should be available in the next couple of months and we expect the product to command a price premium to that of oils, which should benefit the company's margins.

CanniMed is also working on developing new, innovative, smokeless products and has signed an agreement to license CTT's Orally Dissolvable Thin Film Wafer technology. This will enable the company to exclusively develop and commercialize this novel, smoke-free, drug delivery system in Canada. The agreement includes the licensing of six patents related to cannabinoid and opioid delivery for pain management.

Exporting to International Cannabis Markets

After the second quarter, CanniMed completed its first shipment of commercial cannabis oil to Australia (3,600 ml of CanniMed Oils). Upon completion, the company received three additional import permits from the Australian Department of Health for an additional 360,000 ml of CanniMed Oil products to be shipped by the end of September, subject to receipt of export permits from Health Canada, which are in process.

CanniMed also sold 12,960 ml of its CanniMed Oils to the Cayman Islands where dispensing of the CanniMed Oils to patients with a valid medical document has begun.

A Stock to Watch

We are favorable on CanniMed's leverage to the Canadian medical marijuana market as well as various international opportunities. The company recently sold its cannabis oils into the Cayman Islands and Australia and has subsequently received a large follow on order from Australia. CanniMed also has a distribution agreement in the EU.

CanniMed is also focused on physician education and the distribution, sale and marketing of medical cannabis products through its agreement with PharmaChoice, a member-owned cooperative that represents more than 700 independent pharmacy owners across Canada.

The company has benefited from two significant trends facing the global marijuana market, a global expansion and a preference for smokeless products. We expect to see CanniMed continue to record above-average growth and view the company as a stock to watch.

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This article was written by Mark Maulden for on .

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