Washington State Cannabis Legalization Yields Opportunities for Investors

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Washington State Cannabis Legalization Yields Opportunities for Investors

Whitefish, MT / July 9, 2014 / The sale of recreational marijuana began in Washington State this week, joining Colorado in an experiment that has the world watching closely. With thousands of marijuana enthusiasts expected to wait in lines to pay upwards of $300 per ounce for the drug, if Colorado’s legalization is any guide, investors are eagerly waiting to do the same in order to capitalize on the rapidly growing industry.

Big Cannabis

The U.S. cannabis industry grew 64% in 2013 and is expected to reach $2.34 billion by the end of 2014, according to ArcView Market Research. Marijuana Business Daily anticipates that the market for medical and retail marijuana sales will accelerate to $8.2 billion by 2018, driven by decriminalization laws in Washington State and Colorado, which represents a four-fold increase over expected 2014 sales.

For its part, Washington State expects to collect some $190 million in cannabis tax revenue over the next four years. These figures are in-line with Colorado’s ~$70 million in recreational sales and ~$133 million in medical sales that generated approximately $17.4 million in tax revenue over the first six months of 2014, which were spent on education and prevention efforts among other things.

These large dollar amounts have attracted a number of public companies to the space, ranging from large pharmaceutical companies like GW Pharmaceuticals plc (NASDAQ: GWPH) to smaller provides of ancillary products and services like MCig Inc. (OTC: MCIG), which are well positioned to expand along with the market over the coming years amid ongoing decriminalization.

Starting Small

Washington State officials issued 24 marijuana retailer licenses across the state this week, enabling stores to begin selling to the public on Tuesday, July 8, 2014 after a required 24-hour waiting period. Thousands are expected to show up to participate in the event, along the same lines as Colorado’s legalization, with Seattle’s sole location expected to draw more than 2,000 marijuana buyers.

Businesses receiving their licenses this week represent the first of 334 licenses allotted by the Washington State Liquor Control Board (“WSLCB”) for retail sales who have successfully completed the licensing process. Locations receiving licenses were selected by taking into account population, geographic dispersion and the individual applicant’s readiness to be licensed, as determined by regulators. 

Investment Opportunities

Several public companies are well positioned to capitalize on Washington State’s rollout, including Abattis Bioceuticals Corp. (ATTBF) (CSE:ATT), which has established a cannabis testing lab in the state through its Phytalab subsidiary.

Phytalab chemical tests have been legitimized and proven based on Bioanalytical Method Validation for accuracy and precision. In fact, Dr. Sexton literally helped write the book on the analytical testing of cannabis known as The American Herbal Pharmacopoeia Cannabis Monograph. The company’s reports are based on FDA guidelines for describing botanical medicines and compliant with all requirements.

In addition to Phytalab, Abattis also owns a 34% equity interest and 73% economic interest in Washington-based Instant Payment Systems LLC. The company offers secure and comprehensive payment processing that meets the needed controls, reporting, and privacy needs of dispensaries and their patients. The system aims to set the standard for payment and patient tracking within the industry.

Looking Ahead

In 2016, anywhere from a half dozen to a dozen ballot initiatives are slated in various states pushing for the legalization of cannabis in some manner. The most important will be California, which has a population of about 40 million and an already supportive view of marijuana. With Washington State and Colorado already having legalized recreational pot, many more states are likely to join the ranks.

Many publicly traded companies are uniquely positioned to benefit from these trends, but Abattis Bioceuticals may be the most diversified play for investors. With several different subsidiaries operating throughout North America, the company provides investors with exposure to everything from Washington State testing services to Canada’s new Marihuana for Medical Purposes Regulations (“MMPR”).

CannabisFN Executive Interview | Mr. Michael Withrow, CEO of Abattis Bioceuticals (ATTBF) from TDM Financial.

In the end, the combination of Washington-based cannabis testing and payment processing makes it a unique play on the state’s recent legalization, while its other subsidiaries provide exposure to numerous other areas of the industry.

For more information about Abattis Bioceuticals Corp., see the following list of investor resources:

Company Website

CannabisFN Profile


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