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Outdoor cannabis specialist Christina Lake Cannabis (CNSX:CLC) is expanding the amount of land it  has under cultivation as it approaches the 2021 growing season. It is introducing three new strains of cannabis which have already undergone a rigorous two year testing cycle to confirm their suitability for commercial-scale growth.

Christina Lake said that 10% of its planned crop for 2021 is to consist of experimental strains, most of which have already passed the first year of testing. Some strains have demonstrated a THC content of 25% or higher.

Regular readers of The Armchair Trader will know that we are big fans of what we are now calling Cannabis 2.0, the second wave in the development of the cannabis sector in North America as well as the wider consumption of CBD products in the wellness and OTC medicine markets. With the election of Joe Biden in November we are expecting further liberalisation of this sector to come through in 2021.

Shares in Christina Lake Cannabis have had a good outing already this year, up from under 8c on the CNSX in Canada to hit a month high $1.07 on 26 January. The stock is up from 38 cents on 24 November.

Well-positioned to benefit from Cannabis 2.0

Companies like Christina Lake Cannabis are well-positioned to benefit from Cannabis 2.0. While there have been concerns voiced that there is an over-supply issue in the market, and that the cannabis price will drop in the short term, CLC seems to be well-positioned to cope with this. As an outdoor grower in a part of Canada that helps it to optimise yields, it can grow and process cannabis at a much lower price point than traditional growers of cannabis that use greenhouses.

“The value we create in cultivating cannabis is by no means limited to growing plants outdoors in an optimal climate such as that of Christina Lake,” said Joel Dumaresq, CEO of Christina Lake Cannabis. “In fact, the proprietary strains of cannabis that we have developed in-house to capitalise upon the environmental advantages we benefit from are arguably the backbone of our enterprise, because they enable us to maximise our yields of elements such as THC and terpenes based on our discretion in accordance with market demand.”

Dumaresq points to the integrated business model the company pursues: namely having cultivation, extraction and R&D all in one place gives CLC a unique position in the Canadian marketplace, which is one reason why we started following the stock in the first place. The team at CLC feel that by strategically allocating proven strains and high-THC experimental strains, they can sustain reliable and predictable rates of output, which is partly what Cannabis 2.0 is all about.

Massive genetic databank

CLC has already shared details about its genetic databank which consists of more than 600,000 seeds and over 100 different proprietary strains of cannabis. Over a period of approximately three years, it experimented with combining genetics to optimise the properties of a given plant’s biomass when grown under sunlight. These proprietary formulations are engineered with an objective of maximising specific elements of a given cannabis plant (or their respective extracts) such as tetrahydrocannabinol (“THC”) content and terpene profiles.

Based on our previous discussions with CLC we anticipate that this year will see a much larger and more productive crop than last year, which will help the company to also meet increasing demands for higher quality, more expensive CBD oils from the health sectors in Canada and the US, as well as potentially the European market.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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