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FSD Pharma is building a mammoth hydroponic indoor cannabis production and processing facility

Snapshot

The indoor hydroponic facility will be optimized for large-scale, medical-grade cannabis production and once complete, is expected to have over 3.9 million sq/ft available for production

FSD Pharma facility

Quick facts: FSD Pharma

Price: 5.25 CAD

CSE:HUGE
Market: CSE
Market Cap: $40.64 m
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  • Headquartered at the former Kraft plant in Cobourg, Ontario, with large expansion potential

  • Multiple strategic partnerships with companies and organizations, with strengths, experience and knowledge that complement

  • Holds both a cultivation licence and sale for medical purposes licence

  • At full capacity, the Cobourg facility will be able to produce 400,000 kilograms of dried cannabis per year


“HUGE” is the Canadian stock ticker for FSD Pharma Inc (CSE:HUGE) (OTCQB: FSDDF) (FRA:0K9) and it hints at the size of the company’s aspirations.

The firm's aim? The development of high-quality, indoor-grown, pharmaceutical-grade cannabis. But it’s even more than that. The company intends to target all legal aspects of the cannabis industry: cultivation, processing, manufacturing, extracts and research and development.

“We are building the largest indoor hydroponic facility in the world,” executive co-chairman Raza Bokhari tells Proactive. “We have our operations all under one roof. That gives us economies of scale and it gives us cost efficiencies.”

READ: FSD Pharma adds two leading cannabis researchers to Scientific Advisory Board

The cannabis company, through its wholly-owned subsidiary FV Pharma Inc, is a licensed producer under Canada's Cannabis Act, having received its cultivation license in October 2017 and its sale for medical purposes license in April 2019. 

FSD’s also has a research and development platform that is focused on cannabinoids and their potential in clinical applications. 

Cobourg facilities have room to grow

FSD Pharma is headquartered at the former Kraft plant in Cobourg, Ontario, about an hour's drive from Toronto, in a mammoth facility that sits on 72 acres of land with 40 acres primed for development and an expansion capability of up to 3,896,000 sq/ft.

The firm is in the midst of developing 220,000 sq/ft of indoor grow space at its Ontario facility and there’s ample space to grow. The company is hoping to add an additional 650,000 sq/ft to that number. 

At full capacity, the Cobourg facility will be able to produce 400,000 kilograms of dried cannabis per year by 2025. Not to mention that an indoor hydroponic production helps ensure the consistency of the product.

Strategic alliances

FSD Pharma has entered into strategic relationships a number of cannabis companies from joint ventures to strategic investment, or collaboration and profit-sharing agreements. This includes a strategic investment in High Tide Ventures, a privately held, Alberta-based retail distribution company, which owns some of Canada’s well-known retail cannabis accessory brands, including Famous Brandz, RGR Canada, Smoker’s Corner and Canna Cabana.

FSD invested in Cannara Biotech, which plans to be the largest indoor cultivation facility in Quebec. Cannara has a 625,000 sq/ft facility on 27 acres of land, located about an hour from Montreal. FSD and Cannara have a further agreement in place where FV Pharma will lease over 105,000 square feet of Cannara’s facility for the purpose of cultivating and/or selling cannabis and cannabis-derived products.

READ: FSD Pharma saw 'robust expansion' at Ontario facility in 4Q as it capitalized on market opportunities

FSD Pharma also has a collaboration and profit-sharing agreement with Canntab Therapeutics (CSE:PILL). Canntab is the first company solely dedicated to the research and development of oral dosage therapeutic formulations of cannabis.

The company also has a strategic partnership with SciCann Therapeutics, a Canadian-Israeli specialty pharmaceutical company. FV Pharma will receive premium access to the cannabinoid scientific research platform developed by SciCann Therapeutics in Israel, which includes a network of leading researchers, academic institutions and medical centers.

How it is doing

The firm has had a busy 2019. 

Notably, it has spent significant effort strengthening its management team, as well as its board, and scientific advisory board. 

FSD Pharma CEO Dr Raza Bokhari himself also stepped officially into the CEO role in June, after serving as interim CEO previously.

The highlight milestone of the spring, no doubt, however, was the awarding of its sales licence and the development of its expansion plan at the Cobourg facility. 

“After receiving the sales license for medicinal cannabis in April 2019, we are tightly focused on developing a robust expansion plan at our Cobourg, Ontario facility under the leadership of Dr Sara May,” said Bokhari. “Finalizing the next phase of expansion, with drawings, a construction budget and timeline is our top priority.”

The hydroponic indoor cannabis production and processing facility will have multiple business units co-supporting each other, operating under a single roof to exploit economies of scale and operational efficiencies.

Earlier in the spring, FSD Pharma signed an agreement to acquire US-based specialty research and development pharma company Prismic Pharmaceuticals. The speciality research and development pharmaceutical company is developing non-addictive prescription drugs with the goal of addressing the opioid crisis based on formulations utilizing micro-palmitoylethanolamide’s “entourage” effect on certain drugs impacting the endocannabinoid system.

The firm says it plans to continue to bolster its research & development platform, focused on cannabinoids and their potential for widespread clinical applications. The firm says it intends to create FDA-approved medications that will be commercialized internationally.

Inflection points

  • Strong potential with its research & development platform, focused on cannabinoids and their potential for widespread clinical applications

  • Continues to bolster strategic relationships. Its collaboration and profit-sharing agreement with Canntab Therapeutics is promising.

  • On schedule for construction, and robust expansion plans under strong leadership

CEO says FSD continues to ramp up

"We have a 25,000 sq/ft facility but we have capacity to build 3.9 million sq/ft and we have plans to do that by 2025. We are ramping up and so far things are going on schedule," said Bokhari in an interview with Proactive. 

Contact Katie Lewis at [email protected]

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