In 2016, the world’s medical cannabis market was valued at $14.3 billion and is approximated to grow at a rate of 21% between 2017 to 2024 and reach a value of more than $63 billion in 2024. At present, California is considered to be the largest market of cannabis products and earlier this year, new laws concerning recreational cannabis became effective there. Aside from California, Canada is also deemed to be powerful in terms of sales from cannabis products. Many analysts believe that in 2018, the Canadian cannabis market will reach more than $5 billion in sales.
To date, Canada is one of the two countries (together with the Netherlands) that exports medical cannabis. As a result, this has allowed numerous firms to have a direct benefit of the legalization of medical cannabis in more than 20 countries across the world.
Pivot Pharmaceuticals’s proposal
In Canada, one of the leading medical cannabis companies is Pivot Pharmaceuticals Inc. (it is also known under the Ticker “PVOT”). Last week Pivot Pharma made news by announcing its proposal to acquire the licensed cannabis producer Agro-Biotech Inc. Once the transaction is completed (probably by the second week of April this year), Agro-Biotech will continue to run independently.
Pivot Pharma is a recognized company in the medical cannabis industry because of its way of developing the way of dosing and bioavailability of cannabinoids with other drugs and modes of administrations. In addition to that, Pivot Green Stream Health Solutions (PGS), Pivot Pharma’s medical cannabis sector is already conducting numerous studies to develop their products and discover novel treatment methods to address people’s medical needs. Recently, Pivot Pharma was able to acquire the right to two drug delivery methods for tetrahydrocannabinol (THC), cannabidiol (CBD), and other cannabinoid-based products.
In relation to the said proposal for acquisition, Pivot Pharma has agreed to pay a finder’s fee to Tremblant Management, equivalent to a percentage of 2.5% of the total value of Agro-Biotech’s shares (about $97,000,000). This shall be paid upon closing of the said transaction.
What will happen after the acquisition?
The Agro-Biotech management team, as well as their stakeholders, seems to be excited of the collaboration. According to Yan Dignard, president of the company, the collaboration will open doors for their company to further innovate in cannabis production. In return, with the help of Agro-Biotech, Pivot Pharma will be very successful as it will be able to manage and direct the process of cannabis manufacture, starting from the seed up until the finished product. Agro-Biotech can offer its experience as well as expertise as a producer of medical cannabis to do this.
Indeed, as the medical cannabis industry and scientific research continue to expand in many places worldwide, it is not really that surprising for companies to join forces in order to become more successful. And as more medical cannabis laws become effective in more states and countries, the collaboration of different companies may result to changes in the industry; thus resulting to the broadening knowledge on the medical potentials of cannabis.