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How Tech Is Transforming The Cannabis Sector

Cannabis

2019 could be a huge year for cannabis investors, for three simple reasons.

First, demand is expected to shoot up thanks to advancing legalization, with Canada’s full legalization leading the way. Just in Canada, demand is expected to top 1 million kilograms by the end of 2018.

Second, the capital investments in new production made in 2018 should begin to pay off, as cash flows improve and costs fall.

Third, cannabis will enter the mainstream in the US and internationally.

Whole Foods Market predicts that hemp products will be a Top 10 food trend in 2019. Investment has been surging into cannabis stocks, and the sector should continue to grow as more and more applications for cannabis products attract investor attention.

So far, a few big hitters have gotten all the attention, riding the Green Wave to double-digit growth during 2018.

But a much smaller company is about to make an impact.

Wayland Group (CSE:WAYL, OTCMKTS:MRRCF) is a vertically-integrated cannabis producer.

Like the other heavy hitters of the industry, such as Cronos Group and Canopy Growth Corp., Wayland focuses on cultivating cannabis for delivery to markets around the world.

But Wayland has a secret.

While Cronos and Canopy get all the attention, Wayland has been quietly perfecting production methods that are aiming to be the most efficient in the world.

By harnessing cutting edge tech, including the latest advancements in AI and automation, Wayland has cut the costs of cultivation down so low their gross margins are forecast to be staggering.

This makes Wayland the biggest untold story in the business.

Harnessing superior tech to beat out the competition is the reason this company aims to become the most profitable in Cannabis.

Remember, early investors in Amazon knew it was a tech company first, with methods that would put every other retailer out of business.

And Wayland Group, by focusing on efficiency first and foremost, is aiming to pull off a Cannabis 2.0 miracle of its own.

#1 Huge Potential Profit in a $150 Billion Market by 2025

Wayland (CSE:WAYL, OTCMKTS:MRRCF) has only been at this since 2017.

But they’ve already worked everything out: investment, vertical integration, low production costs and gunning for big profit margins.

From their main production center in Canada, Wayland can produce cannabis for 60 cents per gram.

Wayland can produce for 5 cents per gram in Latin America.  Wayland can sell the same type of product to EU markets where it sells for C$16 per gram.

That’s a 31,899% gross profit from Latin America and 676% from Canada if Wayland can get its product to Europe.

And with the global medical cannabis market projected to be $150 billion by 2025, the potential for future profit is immense.

(Click to enlarge)

Wayland has global reach. It can produce in North America and Europe, has just signed contracts to take over assets in Latin America, and can move product to markets around the world.

In September 2018, Wayland delivered its first batch of CBD capsules to be sold in the Greater Munich region of southern Germany.

Total German demand for cannabis products is estimated to be 5 million grams. The market there has grown FAST: from only 800 medical marijuana patients in 2017, there are now more than 79,000.

In Italy, where Wayland has just signed on to a joint venture with CBD Italian Factory, demand is expected to be 1.2 million grams. In the UK and Switzerland, demand will be about 20,000 grams each.

As global demand increases, Wayland plans to grow right along with it…and expects to undercut every competitor by producing the product for less than most anybody else.

#2 How They Do It

There are four keys to Wayland’s (CSE:WAYL, OTCMKTS:MRRCF) highly profitable business plans.  No one else is doing this anywhere near the level they are, as far as they know:

1) Operational Efficiency: They Only Use a fraction of the Staff Traditional Growers Need

The team at Wayland has a background in bringing disruptive tech.

Wayland can do what to their knowledge no other cannabis producer has managed to do: apply cutting-edge tech to streamline the cannabis cultivation process.

The company collects every scrap of data from its cultivation process and feeds it into an Artificially Intelligent Master Grower.

AI tech means that Wayland can manage a colossal cultivation complex with far fewer staff.

The company’s Canadian growing facilities require a staff of only 26 people—compared to the 500 or so needed to run the operations of some other big-time producers.

That’s a fraction of the staff that traditional growers need... and it keeps production costs down.

2) Automation Efficiency: Partnership with Rockwell Automation

The AI Master Grower is powered by Rockwell Automation, and Wayland is the first cannabis company to embrace automation as a key feature of the cultivation process.

With a tiny staff of 26 employees, Wayland can run an entire complex capable of producing thousands of grams of cannabis for export.

That brings production costs way, way down. At the Langton facility in Canada, Wayland deploys the AI Master Grower to oversee 365,000 square feet and a potential annual capacity of 65,000 kilos.

Here’s Wayland CEO Ben Ward discussing their automation drive

And how they can sell product directly online.

3) Energy Efficiency: 88%-To-Net-Zero

Wayland can cut big costs by embracing renewable energy sources and energy efficient practices.

Their facilities are powered by natural gas co-generation, and they utilize recycled water for their hydroponics, which cuts down on waste that can accumulate from bad growth practices.

The Langton facility has been categorized as “88-percent-to-net-zero,” meaning that it doesn’t have to rely much on external sources of water and power. A natural gas well on-site means electric charges have been reduced from $0.20/kilowatt hour to $0.05/kilowatt hour.

The company has worked out a quick-dry method with former JPL scientists.

4) Technological Breakthroughs: Improving Profit Margins

Wayland has brought advances in pharmaceuticals to cannabis cultivation.

The company has deployed VESIsorb medical tech for its cannabis products.

When cannabinoids are ingested, they enter the body but tend to get clumped in the digestive system, interfering with absorption and diminishing the overall effect. VESIsorb disperses the CBD molecules so they’re easier to absorb, providing higher and more immediate levels of CBD absorption.

(Click to enlarge)

That makes Wayland’s products faster and more effective at delivering the results customers and patients are after.  Just as importantly, it improves their profit margins.

These four reasons are why Wayland is on a possible trajectory for fast, efficient growth unlike most we’ve seen in the cannabis sector.

#3 From Zero to 95,000,000 Grams in 2020?

Wayland (CSE:WAYL, OTCMKTS:MRRCF) is planning to step up production as we head in to 2019.

Thanks to mass automation, the company believes it can quickly ramp up output: from just 2,400 kilos in 2018, Wayland intends to be producing 36,000 kilos in 2019, and within a year that figure is planned to climb to 95,000 kilos.

And that’s just from the company’s Canadian facilities.

In Switzerland, Wayland plans to soon be producing 14,000 kilos of CBD product, and another 120,000 kilos out of Germany. When concentrated, all that output results in about 15,000 kilos of CBD isolate.

The company is based in Ontario, but it has growth operations in Germany and Switzerland. In November 2018 it announced an acquisition in Colombia and a joint venture in Italy.

In December, the company announced an agreement to purchase 819 hectares of land in the San Juan Province in Argentina.

The purchase, made for $8.5 million, was exactly what Wayland wanted. The climate is perfect for cannabis cultivation, has excellent infrastructure and a good local labor pool.  The property is already irrigated, which means low development costs.

Wayland is entering the un-tapped UK market by acquiring Theros Pharma Limited, a well-known British cannabis firm.

And to reach markets in the Asia-Pacific region, the company has signed a contract to make an acquisition in Australia, taking over control of Tropicann Pty Ltd.

Global demand could be as high as $150 billion by 2025. The customer base for medical marijuana has grown by leaps and bounds:

From a few hundred to 30,000+ in Germany.

From 23,000 to more than 300,000 in Canada between 2015 and 2018.

In the United States, more than 900,000 medical marijuana patients in California alone.

Competition over markets could be fierce, as all the major cannabis companies have spent 2018 investing in output. But Wayland should have the edge, thanks to its low production costs.

#4 One of Only 5 in the World

Wayland (CSE:WAYL, OTCMKTS:MRRCF) has a big head-start over other potential competitors.

It’s an approved GMP certified producer in the EU, one of only five, along with Canopy Growth Corp., Cronos Group, Tilray and Aurora.

Of those five companies, Wayland is the only one not trading above a $5 billion market cap.

Instead, Wayland is still relatively small.

Its market cap is around $250 million, but its potential output and its profit margins should make it a very worthy competitor to many of its larger rivals.

It has a technology edge that puts it ahead of all small-time producers that might try to break into the market and get EU certification, and it has as much potential as big companies like Cronos, Tilray or Canopy Growth.

#5 From $4 Million to $100 Million in 2019

Right now, Wayland’s revenue stream is small: only about $4 million.

That compares to the other major cannabis producers like Canopy and Tilray, which have been spending big but haven’t yet made much out of it. Canopy, for instance, realized only $40 million CAD in revenue in 2017.

But from $4 million this year, Wayland expects to bring enough product to market to realize $100 million in sales next year.

That’s 2500% revenue growth.

And that’s just the beginning.

Wayland has the tech edge to challenge for much more.

While Canopy, Tilray and Cronos Group got big fast, Wayland is taking its time. And investors have already started to notice.

The company’s automated production techniques, energy efficiency and global reach means it can produce product at a fraction of the standard cost all around the world.

In 2019, cannabis will enter the mainstream. Demand is set to grow. And Wayland’s (CSE:WAYL, OTCMKTS:MRRCF) low production costs will give it an edge over its competitors. This company could shoot up like a rocket. And with the growth of most other major cannabis companies likely to slow in the coming year, this company will start getting more and more attention.

Savvy investors should watch carefully.

Other cannabis stocks investors are watching closely:

The Supreme Cannabis Company, Inc. (OTCMKTS: SPRWF) (TSX.V: FIRE)

Supreme Cannabis is engaged in production and sale of medical marijuana. The Company is focused on the wholesale sector of the medical cannabis market in Canada and operates an approximately 342,000 square foot greenhouse facility located in Kincardine, Ontario.

Recently, Supreme announced an international partnership with Khalifa Kush, a brand run by rapper Wiz Khalifa. The agreement covers a variety of consulting services, from strain development to product lineup, expected to include pre-rolled marijuana joints, extracts, capsules, and cannabis oils.

Wiz Khalifa noted, “My team and I have spent the past year finding a partner that shares our vision, values and passion for cannabis. The team at Supreme Cannabis understands the importance of high-quality cannabis and how to produce high quality cannabis at scale.”

MedMen Enterprises Inc. (OTCMKTS: MMNFF) (CSE: MMEN)

Valued at more than $1.65 billion, with 800 employees and 18 licensed marijuana facilities in California, Nevada and New York, MedMen is a large U.S. marijuana firm and one of the biggest dispensaries around. Its stores are affectionately known as the "Apple Stores of weed," and the company has done well marketing marijuana in the three U.S. states.

The company announced a 50/50 joint venture, MedMen Canada, with Canadian-based Cronos Group, the first ever marijuana firm to be listed on the Nasdaq. Its IPO proved somewhat disappointing, with the stock price falling shortly after the initial wave of enthusiasm dropped off.  But the company has still managed to raise over $100 million since 2017.

Recently, MedMen announced the closing of yet another acquisition, bringing its total licensed-and-operational assets to 70, spread across 12 U.S. states.

Aphria (OTCMKTS:APHQF) 

Aphria is a Canada-based cannabis company which focuses on the production, sales, and distribution of legal marijuana. The company’s business model focuses primarily on online sales, which is perfect for its patients. A simple point and click and the medication will arrive at the patients in no time.

Aphria’s products are developed to treat a variety of different patients and symptoms. The company offers several smoke-free medications for those who are unable to consume the products in that manner. Aphria also produces low-THC products for patients who are more sensitive to marijuana’s psychoactive properties.

In addition to its commitment to high-quality products, Aphria is also engaged in broadening its international presence,  with key acquisitions across the globe, but especially in Latin America. In a recent press release, the company announced a supply agreement to provide medical marijuana in Paraguay. "Latin America continues to represent an important growth opportunity within the global medical cannabis industry, and we are excited to be among the first to enter the rapidly emerging market in Paraguay," Aphria President Jakob Ripshtein explained.

The Green Organic Dutchman (OTCMKTS: TGODF) (TSX: TGOD)

The Green Organic Dutchman is primarily a research and development company focusing on cannabinoid-based products. Most of its products are dried organic cannabis, oils and edibles, but it also is involved in breeding plants to create new strains and distributing seeds for medical applications.

Recently, the Canada-based Dutchman announced a pivotal distribution partnership with HelloMD, a leading online medicinal cannabis company. The Dutchman will begin selling its premium organic product to HelloMD in late January for online distribution.

Andrew Pollock, Vice President of Marketing at the Dutchman, explained, “Patients deserve premium organic cannabis and through the partnership with HelloMD, we are pleased to provide increased access to TGOD’s product lines with the highest level of customer service and functionality to our patients.”

Molson Coors (NYSE: TAP) (TSX: TPX-A)

Molson Coors is an iconic multi-national beer company, with brands that are recognizable across the United States and Canada. Besides just its Molson and Coors lines, the company has also ventured into more niche beverages to take advantage of the growing craft beer market, buying up brands like Leinenkugel’s and Blue Moon.

Not to be left behind in the marijuana boom, Molson Coors is also developing a line of non-alcoholic cannabis-based beverages with its partner, the Hydropothecary Corporation.

Molson Coors Canada president and CEO Frederic Landtmeters noted, “While we remain a beer business at our core, we are excited to create a separate new venture with a trusted partner that will be a market leader in offering Canadian consumers new experiences with quality, reliable and consistent non-alcoholic, cannabis-infused beverages.”

By. Charles Kennedy

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**

Notice for Forward-Looking Information

Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes that cannabis use and sales will grow as currently predicted; Wayland’s intended acquisition of various foreign companies and expansion into international markets; Wayland’s plans to bring automation and the latest technology to projects in various locations throughout the world; that it could be granted growing licenses; that Wayland can close on its announced purchases and joint ventures; that through efficiency and technology Wayland can substantially lower its production costs below competitors; that Wayland can sell its product at huge gross margins;  that Wayland will create a range of cannabis consumer brands, to be distributed through their own digital platforms and retail facilities; that Wayland can successfully integrate pharmaceutical breakthroughs into its products; that Wayland can achieve its sales targets and gross profit margins as planned; and that it will be able to carry out its business plans

Readers are cautioned to not place undue reliance on forward-looking information. Forward looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from those contemplated in the forward-looking information, and even if such actual results or events are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Wayland. Such risks and uncertainties include, among other things: that a regulatory approval that may be required for the intended acquisitions and subsequent sales are not obtained or are obtained subject to conditions that are not anticipated; growing competition for intended acquisitions in the cannabis industry; announced or expected acquisitions or joint ventures may not close because of inability to come to final terms, or inability to obtain regulatory compliance; potential future competition in the markets Wayland operates for sales; competitors may quickly enter the industry; general economic conditions in the US, Canada and globally; the inability to secure financing necessary to carry out its business plans; competition for, among other things, capital and skilled personnel; the possibility that government policies or laws may not permit legal cannabis sales or growth or that favorable laws in place may change; interruption or failure of information or other technology systems; the cannabis market may not grow as expected; Wayland’s technology and drive for efficiency may not achieve the expected results and its accomplishments may be limited; Wayland may not successfully develop a cannabis consumer brand; and it may not be successful in developing a cannabis based treatment for medical uses; even if it develops a successful treatment, it may not be able to protect its intellectual property; its patent applications may be rejected or successfully challenged; Wayland’s business plan also carries risk, including its ability to comply with all applicable governmental regulations in a highly regulated business; incubator risk investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal laws; and regulatory risks relating to Wayland’s business, financings and strategic acquisitions.

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