Canopy Growth Begins Production at New Large Scale Bottling Facility

Canopy Growth Corp (TSX: WEED) (NYSE: CGC) announced today that they have acquired Health Canada licensing for their cannabis beverage facility in Smiths Falls, Ontario. With the advent of licensing, Canopy announced that it will begin the production of beverages today to enable products to hit store shelves as soon as legally possible.

Included within the new “state-of-the-art” 146,000 square foot beverage facility is a regional distribution center with automated excise stamp lines, an automated manufacturing facility, a chocolate factory, as well as a visitors centre. While Canopy has been mum on details related to the annual bottling capacity of the facility, within the amended management discussion and analysis for the quarter ended February 28, 2019, Canopy Growth identified that there are to be four bottling and canning lines included within the facility at time of start-up.

Based on Tinley Beverage’s (CSE: TNY) annual bottling capacity with a single bottling line at its new flagship Long Beach, California facility of 12 million bottles, this would infer that Canopy Growth’s capacity at its Smiths Falls facility is approximately 48 million per annum, assuming similar equipment is used. Despite the large capacity, the facility is expected to only require 14 employees to operate.

The cannabis giant intends to bring eleven beverage products to the Canadian market initially via the first round of production. Additional products are anticipated to be added to production throughout the year as demand permits. The firm had initially demonstrated to reporters thirteen different THC and CBD infused beverages, sans intoxicants, at the end of October for which there was a media blitz.

Site plan for Canopy’s newly licensed bottling facility.

The presented products however were controversial for some long time consumers, largely as a result of the minimal THC and CBD amounts to be included in the majority of Canopy’s beverage products. While regulations only permit 10 mg of THC per package, Canopy has elected to infuse the majority of their THC offerings with 2 – 2.5 mg of THC, while offering only a single beverage product with 10 mg of THC per bottle. CEO Mark Zekulin stated at the time of reveal that one bottle or can is intended to be the equivalent of consuming one alcoholic beer.

It is currently unclear whether production will include product variants based on Canopy’s recent stake in Biosteel, a nutritional beverage firm that targets athletes. At the time of acquisition Canopy had indicated the purchase was a result of the opportunities provided for CBD infused drink mixes for athletes.

Canopy Growth last traded at $24.28 on the TSX.

Information for this briefing was found via Sedar and Canopy Growth Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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