The marijuana market is maddening. With all of the fluctuations, there are few trends we can trust. But not every pot stock is giving up hope. Many big players, Aurora Cannabis (TSX:ACB, PINX:ACBFF) included, are placing their bets on organics.
According to the Agricultural Marketing Resource Center, the organic market in the United States surpassed $30 billion in 2011. And the trend for organic foodstuffs has been growing steadily at nine percent annually. In some markets, the same healthy and organic growing methods are being applied to marijuana.
Speaking of organic weed, enter the new guy —The Green Organic Dutchman (TSX:TGOD), an organic marijuana producer who just earned an official listing on the Toronto Stock Exchange last week. According to their website, TGOD uses “sustainable, all natural principles” to grow and cultivate their premium green.
Their sustainable technique caught the attention of Health Canada last November. They approved the cultivators to grow an additional 14,000 kilograms when TGOD’s license application was originally for 1,000 kilograms. They were later approved for another facility in Quebec. TGOD now operates on 175 acres, one of Canada’s largest land packages to date.
On that land, The Green Organic Dutchman is building brand new greenhouses. TGOD announced $160 million in private funding in January of this year, $55 million of which came from an exclusive and strategic investment from Aurora Cannabis. This investment is backing the new greenhouses. The facilities, totaling 97,000 square feet, will bring in a lavish 116,000 kilograms of organic pot per year.
Best Buds: Aurora Cannabis and The Green Organic Dutchman
Aurora’s investment in The Green Organic Dutchman should not come as a surprise, given that the powerhouse just scooped up their rival CanniMed (TSX:CMED) in one of the largest acquisitions in cannabis history.
But their new strategic partnership with TGOD is not your typical buy-out. The investment appears to be for the long-term. In fact, the giant is not allowed to wholly acquire TGOD for the next eighteen months in order to give the company a chance to reach its full potential in this unpredictable market.
Giving the pot stock room to grow is a wise strategy, given that TGOD is capable of cultivating over 116,000 kilograms of pot. TGOD will guarantee 23,000 kilograms to Aurora’s growing garden, which could bring some stability to the cannabis giant.
Aurora CEO Terry Booth spoke on this in the company’s press release earlier this year, adding, “This strategic partnership between Aurora and TGOD is mutually beneficial in that it accelerates TGOD’s market access and penetration…while providing Aurora with a significant, sustainable supply of premium organic cannabis and the opportunity to benefit from TGOD’s commercial success.”
Aurora Cannabis Goes Organic
As the second-largest cannabis producer in Canada, Aurora has the potential to build a strong reputation around environmentally friendly marijuana. It could be their focus on organic and sustainable strategies that keeps Aurora Cannabis on top during these inconsistent times.
Last November, Aurora acquired Larssen Ltd., a Canadian design house for greenhouses. The newly named Aurora Larssen Projects Inc. (ALPS) is now at the center of all of Aurora’s facilities, including the new ones being built by TGOD. According to the press release, Larssen sets the bar when it comes to fully automated and environmentally friendly greenhouses, and their unique designs promise exceptional yields for organic cannabis crops.
Joining forces with Aurora gives The Organic Green Dutchman access to ALPS technology as well as an exclusive sneak peek into Aurora’s epic 800,000 square foot Aurora Sky facility.
The Organic Green Dutchman intends to use ALPS technology in its coming facilities, Csaba Reider, TGOD CEO, confirmed in the press release by saying, “Together with Aurora and its subsidiary ALPS, the industry-leading design consultancy for high-technology hybrid greenhouses, we will be able to accelerate our business plan and establish TGOD as the world’s premier provider of premium organic cannabis.”
As these two pot stocks come together and combine their cannabis expertise, hopefully, the market will start to reflect their same optimistic attitudes. In the meantime, The Organic Green Dutchman is building their leadership team to reflect their dedication to sustainable and compliant cannabis production.
Photo credit: Paul Evans