SEATTLE, April 18, 2018 (GLOBE NEWSWIRE) -- CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article discussing FinCanna Capital Corp. (CSE:CALI) (OTCQB:FNNZF) and California’s cannabis extraction industry.
California’s cannabis industry is projected to reach $7.7 billion in revenue by 2021, according to BDS Analytics and Arcview Group, driven by the legalization of adult-use cannabis this year. While Northern California has historically been the most receptive to cannabis legalization, Southern California has evolved its stance and accelerated the market’s growth. Investors may want to look for companies with exposure to both parts of the market.
FinCanna Capital Corp. (CSE:CALI) (OTCQB:FNNZF) is a royalty company focused on the licensed medical sector that has agreements for a planned six acre medical cannabis campus and two medical cannabis extraction facilities located in Northern and Southern California, one of which is already in operation. Investors may want to take a closer look at the stock given FinCanna’s near-term and long-term revenue potential.
California’s Burgeoning Market
California unveiled its largest cannabis reform since 1996 with the passage of Proposition 64 in 2016. The new law allows adults aged 21 years or older to possess and use marijuana for recreational purposes, while requiring businesses to obtain state and/or local licenses to sell the drug. The state also introduced two new excise taxes, including a cultivation and retail tax, in order to raise money for drug treatment and other programs.
According to BDS Analytics and Arcview Group, California’s marijuana industry could generate more than $7.7 billion in legal sales by 2021, which will make it one of the largest legal markets in the world. The Bright Field Group estimates that cannabis concentrates continue to be one of the fastest growing categories following recreational legalization. These trends open the door for companies involved with large-scale cannabis extraction operations.
Despite its rapid growth potential, California could see some issues with adequate supply down the road. The new rules have changed the game for many existing growers that have been forced to either shut down or relocate to licensed facilities. In fact, of the state’s estimated 68,150 cannabis cultivators, only 534 are actually licensed to cultivate cannabis, according to Green Market Report, which opens the door for cannabis campus operations.
FinCanna’s Two Extraction Facilities
FinCanna’s initial investment is in Cultivation Technologies Inc. (“CTI”), which is planning to develop a medical cannabis campus on its six acre site in Coachella. While this project is being developed, CTI established an interim medical cannabis extraction facility in accordance with its Conditional Use Permit. The facility is capable of processing up to 6,000 pounds of biomass per month, which translates to about 3.7 million grams of raw oil per year - with ample room for expansion.
Under the terms of its agreement, FinCanna is entitled to receive 50 percent of the profits from this facility, which had been operated by a third-party tenant of CTI. Since taking operational control of the Extraction Facility, CTI has acquired key accounts for contracted manufacturing and distribution. Private label services have also commenced on the site, providing brands which otherwise had no legal avenue to participate in the licensed environment, a legal solution to maintain their presence in the market.
On February 15, FinCanna signed a binding term sheet with Gram Co Holdings LLC with regards to its Oakland-based cannabinoid research and refinement facility. Under the terms of the deal, FinCanna will invest $3 million in tranches in exchange for a tiered corporate royalty, ranging from 7.5 percent to 14 percent of Gram Co’s revenue. The move provides investors with access to the lucrative Northern California market.
Gram Co’s leased facility is being retrofitted to become a large, state-of-the-art medical cannabis extraction laboratory that’s expected to be operational by the end of the third quarter. Using its hydrocarbon-based solvent extraction methods, the company aims to become a premier producer of bulk concentrates. Gram Co also plans to provide white labeling services to licensed brands and infused product manufacturers that don’t have direct market access.
Please follow the link to read the full article: http://www.cannabisfn.com/fincanna-cannabi…thern-california/
For more information and to read the company’s statement regarding potential risks visit www.fincannacapital.com
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