Mettrum Health Corp Is Today's Cannabis Focus

While most US cannabis investors are focused on home grown marijuana plays, up in The Great White North there’s a lot happening. By 2024, Health Canada projects that the medical cannabis market in Canada will reach $1.3 billion and have ~450,000 patients out of a population of 35 million.Prime Minister Justin Trudeau was elected after including legalization of recreational marijuana. On April 20th, 2016, the Canadian Health Minister Jane Philpott announced that Canada would introduce legislation to decriminalize and regulate cannabis in spring of 2017. The recreational market in Canada is estimated to be worth $7 to $10 billion.One company investors need to pay attention to is Mettrum Health Corp. The stock trades in Canada on the TSX Venture Exchange under the symbol MT, in the US under MQTRF, and in Germany under 7MH.First up, a little background on the company. Mettrum Health Corp is a Toronto-based company and a licensed producer of medical cannabis under the Access to Cannabis for Medical Purposes Regulations (Canada) issued pursuant to the Controlled Drugs and Substances Act (Canada) (the "ACMPR"), which came into effect on August 24^th, 2016. Mettrum received its first license from Health Canada under the Marihuana for Medical Purposes Regulations (the "MMPR") on November 1, 2013 and began production of medical cannabis at its first production facility in Bowmanville, Ontario.Mettrum received its second license from Health Canada under the MMPR on December 11, 2014 for its other wholly-owned subsidiary, Agripharm Corp., at Mettrum Creemore facility in Clearview, Ontario. Mettrum received its third license from Health Canada under the MMPR on December 17, 2015 for Mettrum Ltd. at its new 60,000 square foot production and distribution facility in Bowmanville, Ontario. Mettrum is a leading producer and vendor of medical cannabis under the ACMPR system.In addition, through its wholly-owned subsidiary Mettrum Hempworks, Mettrum also is a licensed producer and distribution of industrial cannabis (hemp) products, including Mettrum's functional food line, Mettrum Originals™, under the Industrial Hemp Regulations (Canada) issued pursuant to the Controlled Drugs and Substances Act (Canada).In the first quarter, revenues increased 54% to C$4,170,514 versus C$2,714,468 during the fourth quarter ended March 31, 2016. The average selling price per gram increased to $8.88 during the first quarter ended June 30, 2016 from C$8.23 during the fourth quarter ended March 31, 2016. Gross profit increased by 67% to C$3,320,828 or 80% of sales, from C$1,993,109 or 73% of sales during the fourth quarter of fiscal 2016. Cash growing costs were reduced to C$2.00 per gram for the quarter ended June 30, 2016 from C$2.49 for the fourth quarter ended March 31, 2016. Client count as of August 22, 2016 was 13,300.In September, Mettrum entered into an agreement with Cannabis Care Canada Inc. ("CCC") to sell to CCC its wholly-owned subsidiary Mettrum (Bennett North) Ltd. ("Bennett Road North"), which is licensed to produce and sell dried cannabis and cannabis extracts for medical purposes. Under the terms of the agreement, CCC will pay $7 million in cash to acquire Bennett Road North and enter into a three-year Supply Agreement that is expected to generate up to $40mm in revenue for Mettrum over the next three years. As part of the transaction, CCC will assume all outstanding obligations associated with Bennett Road North.Mettrum will continue to consolidate operations at its new facility and headquarters, at 314 Bennett Road ("Bennett Road South"). Bennett Road South occupies 60,000 sq/ft on seven acres of land. Mettrum has begun construction to double its total production capacity, currently at approximately 6,000 kg per year, to 12,000 kg before the end of its current fiscal year ending March 31, 2017, and plans to have total production capacity of approximately 25,000 kg by the end of the fiscal year ending March 31, 2018. CEO Michael Haines said:

"Given the scale of our operations at Bennett Road South and Creemore, it was very timely to find a purchaser for Bennett Road North who is also a great strategic partner. We are extremely excited to enter into this agreement which does three important things for Mettrum. First, it allows us to continue to lower operating costs by streamlining and consolidating our operations at our new headquarters. Second, it strengthens our already robust balance sheet in a non-dilutive manner. Lastly, and most importantly, it greatly enhances the scale of our business through our supply agreement, and access to a new market, with Cannabis Care Canada Inc."

Currently trading with a market cap of C$248 million, Mettrum ended August with roughly C$27 million in cash on its books. Mettrum looks to be one of the best plays in not only Canada, but also in the entire cannabis space. We believe investors should look towards Canada for not only its favorable regulatory environment, but also well-financed and well-run companies like Mettrum. We will be updating our subscribers with the latest on Mettrum and other cannabis names. For complete coverage, sign up below!Disclosure: We have no position in Mettrum Health Corp and have not been compensated for this article.