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The Largest Growing Medical Marijuana Market: Arthritis Suffers

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This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

A growing number of cannabis investors are seeking to stake their claim in states that have a large number of communities known for being retirement hubs. You can't think of retirement and not have Florida come to mind.

At the end of September 2017, Liberty Health Sciences Inc. (LHSIF) announced that the Florida Department of Health, Office of Medical Marijuana Use, had approved the transfer of a license to cultivate, process and dispense medical marijuana in the State from Chestnut Hill Tree Farm LLC to Liberty. The company says that the agreement is the first of its kind in Florida.

Chestnut Hill Tree Farm is a Florida based 13,000 square-foot marijuana growth and production facility, covering 36 acres of land and currently, holds one of just 11 licenses issued by the Floridian government that allow growers and producers to operate in the state.

Liberty Health Sciences is a US-based investor and operator in the medical cannabis market--backed both operationally and financially by Canadian medical cannabis behemoth Aphria Inc. (APH.TO).

Aphria is said to have intentions to take advantage of the large and rapidly growing medical marijuana space in the US. However, due to the fact that the company is Canadian and listed on the Toronto Stock Exchange makes it subject to certain restrictions that could add both time and money to any cross-border activity.

To get around that the company, by way of a $25 million investment in a company previously called DFMMJ Investment Ltd, and a subsequent reverse merger that resulted in the now well funded DFMMJ becoming publicly traded Liberty Health Sciences (LHSIF) and, by proxy, Aphria's route to market in the US.

Aphria has plans to use Liberty Health Sciences to dominate the US medical marijuana market, just as it has done in Canada. With the largest market for medical marijuana from a target indication perspective being arthritis sufferers, the company believes if it's dispensaries can be located close to the adult lifestyle communities (i.e., retirement homes) it's going to have a population of arthritis sufferers on-tap. However, it's not just arthritis that's common in an elderly population, other medical problems like glaucoma, cancer, etc. are also prevalent.

The company reports that by February 2018 to have the production capacity of 2800 kg annually. By December 2019, expectations are that number will increase to 25,000 kg and an increased 435,600 square-foot growth and production space. Increased production capacity will support the company's intentions of building out a network of dispensaries across Florida.

The company plans to establish the first of its dispensary network locations in The Villages, north-central Florida as early as this month. By the end of the year, management expects to have added Fort Lauderdale, Miami, and Jacksonville to this list, which would give the company coverage of the state north to south. By June next year, four more dispensaries will be added to the list, located in Orlando, Tallahassee, Tampa, and Pensacola respectively.

Each of these dispensaries will be located in an area that must meet four primary geographic targeting criteria:

  • General population, which is self-explanatory.

  • The number of prescribing doctors in and around the location in question. The higher this figure, the easier it will be for the company to establish itself as a provider to a substantial number of prescribing doctors (which are, the necessary channels through which Liberty Health Sciences must distribute).

  • The number of adult lifestyle communities in the area.

  • Veteran population. Part of this plays into the above-mentioned arthritis and elderly prevalent disease target but there is also a high rate of medical marijuana use among PTSD sufferers. PTSD is highly prevalent in veterans.

Liberty Health Sciences has a number of other states within which it intends to apply the same model, with these target states being similar to Florida in that they have a high population of potential medical marijuana patients but a relatively low number of licenses available for production and distribution.

The bottom line here is that Aphria is trying to replicate its success in the Canadian market in the US through Liberty Health Sciences. Considering LHSIF is in the early stages of establishing itself makes it an appealing option for investors looking to get in at the ground-level.


This article was written by Luke Douglas for on .

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

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