Standout Canadian Players Foster 'the Cannabis Lifestyle'

NEW YORK, January 17, 2018 /PRNewswire/ --

Canada's impending legalization of recreational marijuana has triggered a surge in investment activity as investors lean toward Canadian companies as a less-risky entry point into the broader cannabis industry. With unprecedented product demand on the horizon, consumers trends are shifting toward the pursuit of the 'cannabis lifestyle', rich in a wide range of high-quality retail products, accessories and experiences. This emerging marijuana-centered subculture has the potential to drive incredible opportunity for companies like premium cannabis lifestyle brand DOJA Cannabis Ltd. (CSE: DOJA) (OTC: DJACF) (DOJA Profile), as well as cannabis producers and service providers such as Nutritional High International Inc. (CSE: EAT) (OTC: SPLIF) (FRANKFURT: 2NU), Golden Leaf Holdings Ltd. (CSE: GLH) (OTC: GLDFF), New Age Farm Inc. (CSE: NF) (OTC: NWGFF) (FSE: ONF) and MedReleaf Corp. (TSX: LEAF).

It was fitting that 2017 was known as the year of Greenery, since the ongoing progress of cannabis legalization across North America has generated record breaking growth within the industry. Emergent mainstream trends such as celebrity strains, cannabis-inspired haute-couture, and artisan edibles have all signaled the popularity of a newly revolutionized, sophisticated, and lucrative 'cannabis lifestyle'. These initiatives suggest that the next generation of cannabis consumers fantasizes of a world where the cannabis experience extends beyond the bud - to assorted oils, finely crafted smoking accessories, fashionable apparel, and cafes that infuse comfort and sociability into the lifestyle.

From grow rooms and medicinal products to edibles and payment solutions, cannabis presents investors with an exploding market of diversity and growth. According to a recent Bloomberg report (http://nnw.fm/Xo0Ts) that quotes cannabis market research firm the Brightfield Group, global legal cannabis sales are expected to climb to $31 billion by 2021, with the majority of those sales expected to stem from the United States and Canada.

With Canadian legalization of recreational cannabis looming, the opportunity for a brand to become the 'Starbucks' of Canadian cannabis is bigger than ever. Positioning itself squarely in the 'cannabis lifestyle' space is British Columbia-based DOJA Cannabis Company Ltd. (CSE: DOJA) (OTC: DJACF), which operates as a premium cannabis lifestyle brand and is a licensed marijuana producer under Canada's Access to Cannabis for Medical Purposes Regulations (ACMPR). With an eye on emerging opportunities within the cannabis market, standing out as Canada's premier cannabis lifestyle brand is a primary aim for DOJA. The company has the brand-building experience to make a big impact on the cannabis space - DOJA's CEO and founder is none other than Trent Kitsch, a proven brand maven who developed SAXX Underwear into one of the fastest growing premium men's underwear brands in North America.

Lifestyle branding through strategic M&A

Recently, DOJA announced its binding Letter of Intent to acquire Tokyo Smoke (http://nnw.fm/MbMW9) - a merger that will create a uniquely positioned cannabis company that combines a class-leading craft cannabis producer with an award-winning lifestyle brand and retail-focused cannabis company. The emerging company, Hiku Brands Company Ltd., is in reference to the brand house that will contain DOJA, Tokyo Smoke, and Van der Pop-all increasingly recognizable premium cannabis brands.

Huge players are taking notice and investing in this endeavor. Recently, DOJA announced the closing of a $12.5 million non-brokered private placement led by industry leader Aphria Inc. (http://nnw.fm/i0zqY).

This strategic investment combined with a related supply agreement will help secure cannabis concentrate supply for Hiku's premium brand portfolio, the strategic partnership with Aphria brings unmatched cannabis production experience and ensures secured supply for what is anticipated to be a supply-constrained market when Canada's recreational legalization goes into effect.

The merger will also reportedly foster the creation of Canada's first retail-focused craft cannabis producer boasting a portfolio of highly recognizable brands. Hiku will be strategically positioned to become the foremost craft cannabis brand house within the Canadian adult-use cannabis market and the only craft cannabis producer to have a significant national retail presence and a growing portfolio of premium cannabis lifestyle brands.

Hiku has multiple highly recognizable brands and strategies in place to operate retail cannabis stores across various Canadian provinces, ranging from Eastern Canada to Western Canada with further expansion plans in view. This will represent an unprecedented platform through which the company can build brand awareness and reach consumers. Vertically integrated operations are positioning Hiku to offer exclusive retail products in Hiku-owned stores and to achieve superior margins in comparison to its peers. Hiku will prioritize its retail expansion in provinces that allow private cannabis retail, while DOJA and Tokyo Smoke will respond to the Government of Manitoba's Request for Proposals to establish retail cannabis stores throughout that province.

Following the merger, Hiku will have a projected cash balance of approximately $31 million, expectations are that the company will be well-positioned to expand within the Canadian cannabis market and stretch its reach into emerging global cannabis markets.

Leveraging the profit of positive customer experience

The industry-leading management entities that will be at the helm of Hiku boast broad expertise with a proven track record of building and scaling businesses, including SAXX Underwear and a $100 million+ business at Google. Hiku's supporting team brings extensive knowledge in retail, cannabis, finance, design, marketing and creative fields.

​​"We ​​have ​​created ​​the ​​leading ​​brand ​​house ​​in ​​cannabis, where ​​high quality ​​and ​​design ​​will ​​shape ​​the ​​cannabis future," DOJA CEO Trent Kitsch stated in a recent press release (http://nnw.fm/jV8Ae). "​​I ​​am ​​confident ​​Hiku ​​will ​​be ​​trusted ​​by ​​consumers ​​to design ​​better ​​customer ​​experiences ​​and ​​products, ​​resulting ​​in ​​greater ​​market ​​share. ​​Tokyo ​​Smoke's experienced ​​management ​​team ​​has ​​proven ​​its ​​ability ​​to ​​build ​​and ​​acquire ​​respected ​​cannabis ​​brands ​​and create ​​brand ​​awareness ​​in ​​a ​​difficult-to-navigate ​​regulatory ​​environment. ​​We ​​see ​​leveraging ​​those ​​skills and ​​their ​​strong ​​retail ​​operating ​​abilities ​​as ​​highly ​​complementary ​​to ​​our ​​current ​​operations ​​and ​​beneficial to ​​the ​​long-term ​​trajectory ​​of ​​our ​​company. ​​The ​​combination ​​of ​​cannabis ​​production, ​​retail ​​footprint, ​​and ​​a portfolio ​​of ​​cannabis ​​brands ​​gives ​​us ​​the ​​opportunity ​​to ​​realize ​​the ​​significant ​​value ​​of ​​complete ​​vertical integration."

Cannabis cultivation remains key

As a licensed cannabis producer under the ACMPR through its wholly-owned subsidiary Northern Lights Marijuana Company, DOJA currently operates a 7,100-square-foot production facility that is licensed by Health Canada. The company recently acquired second facility is a 22,580-square-foot warehouse where its FUTURE LAB will be housed. The FUTURE LAB will be a state-of-the-art extraction facility for which the company plans to acquire an oil production license. With the completion of the FUTURE LAB, DOJA anticipates its corporate cannabis production capacity will surpass 5,000 kg per year. Phase 1 completion of the FUTURE LAB is anticipated by Q2 of 2018. The facility will utilize an industry-leading multi-tier system powered by LED lighting from Fluence BioEngineering.

Supplementing its medical cannabis production license, DOJA, through its subsidiary, has also applied for a cannabis sales license through the ACMPR, which it expects to receive soon.

Focused on branding premium cannabis flower and extracts, DOJA is bringing a handcrafted approach to the cannabis space. The company's marijuana is grown indoors, and all flower is hand-trimmed and hang-dried to enhance flavor, quality and crystal content.

As part of its focused efforts to foster the "cannabis lifestyle" and help build a cannabis subculture, DOJA recently debuted its first Culture Café, located in Kelowna. This high-end café and cannabis access center hosts events such as cannabis information nights and doctor discussions for medical cannabis patients, and individuals can also schedule private events at the facility. Following national recreational cannabis legalization, DOJA plans to move toward incorporating a cannabis dispensary within the venue and to open additional culture cafés.

Potential Industry Comparables

Other cannabis players poised to support and capitalize on Canada's burgeoning cannabis lifestyle include Nutritional High International Inc. (OTCQB: SPLIF), a company focused on developing, manufacturing and distributing premium and consistently dosed cannabis-infused products, including edibles and oil extracts for nutritional, medical and adult recreational use. Nutritional High recently entered into a definitive agreement in connection with a joint venture (http://nnw.fm/H5byH) with Abba Medix Corp., a wholly owned subsidiary of Canada House Wellness Group Inc. (CSE: CHV), to manufacture cannabis oil extracts and cannabis-infused products in Canada under the ACMPR. As part of this joint venture, Nutritional High and Abba will build-out a production facility at Abba's Pickering location to house a cannabis oil extraction operation that is focused on the production of oils and extracts. Nutritional High is also working closely with Abba to secure a supplemental license from Health Canada to produce medical cannabis oils, with sights set on serving Canada's recreational market as soon as the proper regulatory frameworks are in place.

One of the biggest providers of cannabis oils and solutions in North America, Golden Leaf Holdings Ltd. (OTCQB: GLDFF) is another standout cannabis company on the Canadian landscape that is taking part in the growth of the cannabis lifestyle in that country. Through its branded Chalice Farm retail dispensaries as well as through third-party dispensaries, Golden Leaf Holdings cultivates, extracts, manufactures and distributes its cannabis products. The company recently acquired Medical Marijuana Group Consulting Ltd., which is a medical marijuana consulting company adept at finding and securing insurance coverage for medical cannabis patients and also a leader in cannabis treatment for veterans. The acquisition secures long-term, loyal and profitable customers and will strengthen Golden Leaf Holdings' Canadian market strategy. In November 2017, Golden Leaf also secured, through its subsidiary, a cultivation license from Health Canada for a state-of-the-art grow facility in Ontario, with an intention to submit expansion plans for additional growing space, oil extraction labs and edible production space.

Contributing to Canada's cannabis lifestyle in a more unique way, New Age Farm Inc. (OTC: NWGFF) is an agricultural services company that offers turnkey growing infrastructure and innovative solutions and services for licensed growers and processors of luxury marijuana crops. Through its subsidiary company, NHS Industries Ltd., New Age Farm owns 5.5 acres of prime agricultural land in Langley, B.C., that encompasses more than 48,000 square feet of greenhouse capacity and 80,000 cubic yards of saleable peat soil. The Langley property was spun out as a separate business in 2016, allowing New Age Farm to separate its Canadian and U.S. operations and to pursue further business in Langley as Canada moves toward recreational cannabis legalization. When Canada legalizes recreational marijuana, NHS plans to be ready to accept licensed tenant-growers at its Langley Property. When the Langley Property is completed, it will house a cutting-edge production, processing and warehouse facility where small-scale marijuana grower-producers can produce value-added products derived from their crops. This will increase potential revenue for the growers and will also maintain an ongoing seed-to-sale revenue stream for NHS. Clients will be able to utilize the NHS facility for purposes of growing, processing, storing and distributing their products all from one location, enabling them to lower their overhead.

Another company striving to foster the cannabis lifestyle not just in Canada but on a worldwide scale is MedReleaf Corp. (TSX: LEAF). A licensed Health Canada producer, MedReleaf is the first, and currently the only, ICH-GMP and ISO 9001 certified cannabis producer in North America. The company's mission is to improve quality of life for its patients and to expand global understanding of cannabis and its therapeutic benefits through a broad range of research initiatives. MedReleaf is R&D-driven and offers a variety of premium-quality medical cannabis products that are sourced globally and are carefully cultivated in two state-of-the-art facilities located in Ontario.

As public opinion regarding cannabis continues to evolve and legalization measures advance around the world, the emergence of a legal cannabis lifestyle and subculture is clear. The named Canadian players are endeavoring to foster this developing cannabis lifestyle in Canada and worldwide as Canada prepares for blanket legalization of recreational marijuana use and positions itself to be a global marijuana leader.

For more information on DOJA Cannabis Company, visit DOJA Cannabis Company Ltd. (CSE: DOJA) (OTC: DJACF).

For a more in-depth look into DOJA Cannabis (CSE: DOJA) (OTC: DJACF), view the full report on Microsmallcap.com.

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