TORONTO — Yesterday’s announcement that The Tragically Hip, Canada’s most beloved rock band, is partnering with a medical cannabis producer came as interesting but not exactly shocking news. Industry insiders tell Leafly they see the move as a sign of the increasing acceptance of medical marijuana in Canada—and also illustrates the sector’s large growth potential.
Federal legalization, the band members wrote, 'is a common-sense policy and a change for the best.'
The band will team up with Newstrike, a licensed producer of medical cannabis products. Newstrike is a newly combined company that includes Hemisphere Pharmaceuticals, based in Brantford, Ontario. “After much discussion and assessment on our part, we’ve decided that this company, and the many creative people in it, are a perfect fit for The Hip,” the group announced. “Medicinal cannabis is legal in Canada, and it already greatly benefits the health and well being of many of our fellow Canadians.” Prime Minister Justin Trudeau’s move to federally legalize the adult use of cannabis, the band members wrote on thehip.com, “is a common-sense policy and, in our opinion, is a change for the best.”
In its news release, Newstrike cited an opportunity to harness “the artistic and business acumen of the band members in brand development within the government’s evolving regulatory framework.” CEO Jay Wilgar later told a Canadian wire service that band members are now significant investors in the company and added that the agreement is a business partnership, not a marketing deal.
News of the deal came just one day after Newstrike confirmed that it had closed its previously announced merger with HPI Holdings. Common shares of the new company are scheduled to begin trading on the Toronto Stock Exchange on June 1. How important is the Tragically Hip deal to Newstrike? The company’s new TSX symbol will be “HIP.”
Entertainers’ Involvement ‘Not Surprising’
The announcement didn’t surprise Cam Battley, executive vice president of Aurora, one of the country’s biggest licensed producers.
“You see a growing acceptance of medical cannabis in part because so many Canadians have family members or friends who have used it to treat some medical conditions,” says Battley. That being the case, he says, it’s not surprising that [Ontario-based licensed producer] Canopy Growth has partnered with Snoop Dogg or that [New Brunswick-based] Organigram is working with the Trailer Park Boys.”
In November, Organigram signed a deal with TPB Productions, which owns and manages intellectual property rights associated with Trailer Park Boys, a popular Canadian television series.
The number of Canadians registered to purchase medical marijuana from licensed producers is growing at a dramatic pace. Between September and December 2016 alone, the number of registered MMJ patients jumped from 98,000 to 130,000 according to Health Canada. Cannabis Canada Association puts the current number at more than 150,000.
“More physicians are gaining knowledge about medical cannabis and more patients are requesting prescriptions for it so it’s only normal that that others are recognizing the benefits of it and that a rock band would get involved,” says Colette Rivet, Cannabis Canada’s executive director.
Attracting Investors From All Over
This increasing acceptance of medical marijuana in Canada is fueling the growth of the industry and leading notable investors from all walks of life, not just the world of entertainment, to get involved.
“Cannabis has proven to be an excellent investment with certain companies,” says Battley, noting that Aurora’s market capitalization has increased from $70 million to almost $1 billion since he joined the company in March 2016. “We’re now working with companies that have never been involved in the cannabis sector before,” he says.
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For example, Aurora, which is based in Alberta, recently partnered with Radient Technologies to work on the development of cannabinoid extracts. The company extracts natural ingredients for a range of industries including food and beverage, nutrition, supplements, pharmaceuticals and cosmetics.
More to Come
Is The Hip’s entrance into the medical cannabis industry a sign of things to come?
“I think so,” says Rivet. “Health Canada is now focusing on getting more applicants licensed [to produce medical cannabis] so the companies need more investors.”
An increasing number of people are looking at the Canadian cannabis industry and deciding to get involved in some capacity, says Battley, and that trend will continue. “In the years ahead,” he says about The Tragically Hip’s announcement, “we’re going to be seeing more of this.”