Entourage Cannabis Play a Sign of Things to Come
WeedMD Acquires CannTx, Launches New Name Entourage: Cannabis for Medicinal and Recreation ā LPC
Long-time licensed producer (LP) WeedMD is āevolvingā the company says as the Canadian cannabis market changes and matures. It has purchased CannTX and has already rebranded as Entourage Entourage Health Corp. Under Entourage, cannabis will cover both medical cannabis and recreational. āIt really is that transformation and evolution of WeedMD,ā said Entourageās interim CEO, George Scorsis. āThe business has become a lot more sophisticated and it has evolved to a point that weāre not just delivering weed. We are delivering medicines to people, (and) we are delivering consumer-packaged goods to consumers.ā CannTX covers those āconsumer-packaged goodsā. The purchase will give WeedMD (now Entourage) access to the craft cannabis market. The two companies previously partnered together on a product collaboration shortly before announcing the takeover in May. āItās about us carving out our position in the industry,ā Scorsis said. āWhat we ultimately want to do is be able to drive and deliver good quality products that generate high margins for us.ā The new name refers to the āentourage effectā which happens when many cannabinoids work together. āAnd that is symbolic of our organization as well,ā Scorsis said. āOur organization is based on the people, and the sum of all the people provide us with the entourage effect.ā
The Future of Canadian Cannabis Consolidation Will Not Be the Past ā LPC
The Entourage cannabis play is a sign of things to come. Cannabis consolidation is nothing new, but it is constantly evolving. The Hexo/Zenabis deal was about positioning for the US market. The Tilray/Aphria deal was about positioning for global domination. But unrest in the cannabis industry began long before that, with consolidations threatening at least as early as February 2019. One analyst predicted consolidation in the cannabis industry, stating that the Canadians ādonāt need 100 companiesā. But with Entourage, cannabis production is more about shifting and diversifying. Although Entourage will certainly grow in size with the CannTX acquisition, it seems to be more about tapping into new markets ā i.e. the craft cannabis market. (Interestingly enough, CannTX also started life as an LP under MMPR.) The $17.5 million all-stock deal may also challenge what ācraft cannabisā means. Once the CannTX acquisition is complete (expected next month), Entourage will have nearly 300 workers at its WeedMD greenhouse in Strathroy, Ont., its WeedMD extraction and packaging plant in Aylmer, Ont., and its CannTX indoor grow-op in Guelph, Ont. That may seem big, but the reality is that there isnāt a definition for craft cannabis ā at least in the legal sense. Micro-cultivation does: itās defined as any cultivation area with under 200 square metres of growing area. According to MJBizDaily, ācraft cannabisā is loosely defined as producing less than 10,000 kg of cannabis per year that is hand-dried, hand-trimmed, and hand-packaged. And, CannTX only takes up a small portion of that. According to its LinkedIn page, CannTX has a minimum of 43 employees and a max of 50, which still makes it smaller scale. So, is it a matter of larger companies taking over smaller craft cannabis companies? Entourage cannabis options seem to be much larger now with the takeover/merger. And, it will be interesting to see how separate the two parts of the new company remain. If they play their cards right, it could be an interesting mix of small-batch cannabis with larger distribution reach. Read the Full Story at the London Free Press Do you have a business in Canadaās legal cannabis market? Are you a craft cannabis producer or own a chain or independent cannabis retail store? Letās tell your story here! A news article and your approvedĀ listing pageĀ make great ways to connect your brand with a qualified audience looking for what you are offering.Ā Learn more about submitting your article to LPC. Read the full article
