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JWC Joins CraftGrow Program

Amid post-legalization challenges, CraftGrow continues adding to its shelf.

Photo by Till Kraus for Unsplash

Nearly two weeks post legalization, it seems recreational cannabis sales in 2018 will be lower than expected. Limited distribution networks in some provinces, fulfillment difficulties in Ontario, inventory limitations in Quebec and excise stamp woes that could take several months to fix are dampening fervor.

JWC to participate in Craftgrow

Meanwhile, pot producer James E. Wagner Cultivation Corporation (JWC) (TSXV: JWCA) announced that the company would participate in Canopy Growth Corporation’s (TSX: CGC) CraftGrow program starting in November.

The program within the online marketplace Spectrum Cannabis could offer some growth to JWC amid the stagnating sector. Indeed, inclusion in the program will increase the availability of the company’s dried cannabis products.

The company says that it’s strength is in its proprietary aeroponics growth system.

JWC will use Canopy’s established distribution infrastructure to offer its aeroponically-grown cannabis to medical patients. Their program offering will begin with a high-CBD strain called “Cannatonic.” After that, JWC expects to provide several THC-dominant strains.

Canopy Growth Corporation is one of the largest cannabis companies by market capitalization. Moreover, it has a growing international footprint with operations in 12 countries.

In addition to production and distribution, the company engages in research and development through its wholly-owned subsidiary Canopy Health Innovations.

Its partly owned subsidiary Canopy Rivers Corporation invests in smaller companies in the sector.

How much does brand awareness matter now?

And, while brand awareness proves to be a problem in the space, Canopy Growth has partnerships with icons like Snoop Dogg and Constellation Brands. Furthermore, its brand name Tweed cannabis products are among the most recognizable.

Recognizable brands are valuable in the sector. Over 95 percent of customers surveyed last week said they were unaware of the brands they had just purchased.

On the other hand, if brand awareness doesn’t make a major impact on consumers, then perhaps Canopy won’t capture the Canadian recreational market share previously expected. In the long term, brand awareness will almost certainly create a meaningful impact, however it will take time for consumers to become more familiar with the various brands.

Written by Jason Bagg

Mr Bagg has over 20 years experience in financial services ranging from Capital Markets to Private Equity. Mr Bagg has helped clients build wealth, reduce taxes and plan for retirement. Drawing on his experience, Mr Bagg has spoken on different panels regarding investing and has written numerous due diligence reports and white papers in this area.

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