Vaughan, Ontario-based CannTrust Holdings (TSX: TRST), one of Canada’s leading cannabis producers—and winner of the 2018 Canadian Cannabis Awards “Top Licensed Producer of the Year”—received permitting from the Town of Pelham to proceed with its Phase III expansion, which when finished will put its total capacity at 100,000 kgs per year.
The stock rose 14% on the news to US$7.21.
Pelham had recently passed an ordinance that might have delayed CannTrust’s construction. But the company worked things out with Pelham to proceed with construction immediately. Given the undersupply of cannabis since legalization in October, any delay would have been costly for the company, as most producers are building at full speed to fill the supply gap.
CannTrust’s revised Phase III expansion is permitted up to 390,000 sf, 35% smaller than its initial application for 600,000 sf. However, with enhancements to the facility’s plan, CannTrust says it will still achieve a total capacity of 100,000 kg per year after completion. The enhancements include automation and a higher level of climate control.
The Phase III expansion is now expected to be complete in Q3 of 2020. Initial harvest will be in Q2 of 2020 and full production capacity is expected later in 2020.
“We believe (Pelham’s approval) reflects that we are a trusted member of the community… The demand for our medical and recreational products continues to be well in excess of supply and we are keen to move ahead,” said Peter Aceto, CEO of CannTrust.
“We also continue to evaluate…alternatives to meet and exceed our initial production capacity goals. We are actively pursuing acquisitions…both inside and outside Ontario… Our active patient count continues to increase, and the recreational market is currently undersupplied.”
Phase II expansion
CannTrust is still finishing its previously approved Phase II expansion. This fully-permitted expansion remains on course to bring its capacity to 50,000 kg per year. Construction should be complete by the end of January 2019, with the first harvest in Q1/19.
Founded by pharmacists, CannTrust serves over 60,000 medical patients with dried, extract and capsule products, and offers the industry’s broadest product portfolio. It operates its 450,000 sf Niagara Perpetual Harvest Facility and prepares products at its manufacturing center in Vaughan, Ontario.
It also develops nanotechnology for new products in the medical, recreational, beauty, wellness and pet markets.
CannTrust is expanding internationally, with a partnership with Cannatrek Ltd. in Australia and a joint venture with STENOCARE in Denmark.
It is also pursuing cannabis beverages and has partnered with Breakthru Beverage Group through Kindred Canada, for recreational distribution in Canada.
CannTrust also has partnerships with McMaster University in Ontario and Gold Coast University in Australia, both designed to contribute to research on the efficacy of cannabis.
Curious about how you can make money investing in cannabis? Sign up for Cannin Free Access and subscribe to the Cannin Chronicle. We’ll keep you informed on all things cannabis and even help you determine which cannabis companies have the highest growth potential.
Source Canntrust press release