- Recent study delving into Canadian cannabis market revealed declining market shares for large Canadian cannabis companies
- Pac Roots and its peers have looked to increase their share of market, with Pac Roots recently increasing its total area under cultivation
- Key feature boosting Pac Roots’ prospects has been its focus on producing premium quality strains through meticulous cultivation process
A recent study centered around the Canadian cannabis market and carried out by investment banking firm ATB Capital Markets in early April 2021 came up with a startling conclusion: Large Canadian cannabis cultivators had surprisingly seen their market shares decline between the first quarters of 2020 and 2021, with smaller companies appearing to have picked up the slack (https://ibn.fm/Jw6Rb). The news bodes positively for Pac Roots Cannabis (CSE: PACR) (OTCQB: PACRF) (FSE: 4XM), a Canada-based cannabis company which has earned a well-established reputation for producing premium quality strains and products through use of a meticulous, genetics-focused approach towards harvesting their corp.
Earlier this year, Pac Roots revealed that it had successfully pulled off its initial harvest as part of its British Columbia-centered joint venture with Rock Creek Farms, resulting in a biomass yield of over 105 thousand pounds. PACR simultaneously revealed that its harvest is being processed and will be sold in its entirety to the Speakeasy Cannabis Club (CSE: EASY) (https://ibn.fm/qAgTO).
The Company followed up on the news of the initial harvest by recently announcing the acquisition of a massive, 250-acre restriction-free plot of land in the Fraser Valley, one of the most intensely farmed and productive agricultural districts in Canada. Pac Roots continues to seek to expand its overall supply capabilities.
“I believe this 250-acre asset package that we acquired in early September is a very important addition to our portfolio,” said Pac Roots CEO Patrick Elliott. “It’s land that is undeveloped and is owned outright by Pac Roots. It provides a long development pipeline whereby we can invite and incorporate partners, which lowers our CAPEX and development costs” (https://ibn.fm/1pM5T).
One of the key trends mentioned in ATB Capital Markets’ report was the fact that Edmonton, Alberta-based Aurora Cannabis, which led all licensed producers with an 18.2% market share in the first quarter of 2020, had seen this share decline to a mere 7.4% as of the first quarter of 2021. The investment bank went on to attribute the precipitous market share decline to declining demand for dried flowers, with Aurora now “focused on improving the company’s presence in higher-margin premium segments, as opposed to maintaining share in value segments” (https://ibn.fm/gm4Jp).
Pac Roots has sought to avoid the fate of its competitors by relentlessly focusing on a genetics-based cultivation approach, allowing PACR to produce 50 super-elite strains and roughly 350 tested cultivars, which in turn has resulted in the company maximizing yields, boosting profitability and minimizing labor costs. In fact, as Pac Roots’ CEO explained, their cultivation processed differed radically relative to any of their peers.
“We don’t deal with seeds. It’s different from most hemp farmers where seeds are thrown off of the back of a tractor,” said Elliot. “We grow these seedlings, clones, clippings or cuttings from a live plant and we grow them for the first month indoors and plant them. What this does is ensure is that you are going to get exactly what you expect out of that cultivar, and it also survives that first month which is the toughest month.”
With smaller companies offering higher-value products taking incremental market share from Canada’s erstwhile cannabis cultivators, Pac Roots Cannabis and its unique and high-value product catalogue stand well-positioned to benefit.
For more information, visit the company’s website at www.PacRoots.ca.
NOTE TO INVESTORS: The latest news and updates relating to PACR are available in the company’s newsroom at http://ibn.fm/PACR
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