Emblem Corp (EMC.V) Finally Makes Its Debut

Emblem Corp (EMC.V) finally made its debut on the TSX Venture Exchange this week. The IPO of Emblem Corp has been one of this year's most highly anticipated offerings. Canada is the hottest country right now for cannabis investors as it has the most favorable regulatory environment for cannabis in the world. With the election in the US of President-elect Donald Trump and his appointment of marijuana opponent Senator Jeff Sessions as Attorney General, investors are looking towards the Great White North for a more certain future.By 2024, Health Canada projects that the medical cannabis market in Canada will 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 as much as C$7 to C$10 billion.This week, we saw the Canadian Federal Task Force issues its recommendations on how to legalize recreational marijuana use. The proposals include a minimum purchase age of 18, federal oversight on production, provincial governments charged with retail distribution and maintaining criminal offenses for illicit production and trafficking. The Task Force was lead by Canada’s former attorney general and offered more than 80 recommendations on how Canada could become the largest developed-world country to legalize marijuana.The Canadian government's goal is to root out the criminal elements that have trafficked in marijuana and made a fortune doing so. Getting marijuana out from the black market and into a regulated environment would make Canada the first developed country to do so and provide a model for other governments worldwide. The Task Force's report estimates the Canadian black market for marijuana to be worth C$7 billion annually. This potential is what makes Canadian cannabis players like Emblem Corp so exciting for investors.Emblem is licensed under the Access to Cannabis for Medical Purposes Regulations (the "ACMPR") to cultivate and sell medical marijuana. Emblem carries out its principal activities producing marijuana from its facilities in Paris, Ontario pursuant to the provisions of the ACMPR and the Controlled Drugs and Substances Act (Canada) and its regulations. Emblem was incorporated under the CBCA on October 8, 2014 under the name KindCann Holdings Limited, then changed its name to Emblem Corp on September 1, 2016. Emblem came public via a merger with Saber Capital Corp, a capital pool company. According to the December 5 press release:

Saber Capital Corp. (SAB.H) ("Saber" or the "Company"), a capital pool company, is pleased to announce that, in connection with its previously announced proposed qualifying transaction (the "Qualifying Transaction") with 9045538 Canada Inc. (formerly Emblem Corp.) ("Emblem"), effective December 5, 2016, the Company changed its name to "Emblem Corp." (the "Name Change") and consolidated its common shares ("Common Shares") on the basis of one (1) post-consolidation Common Share for every four (4) pre-consolidation Common Shares (the "Share Consolidation").

Now that the transaction has been completed and Emblem started trading, there are 65,620,811 Common Shares issued and outstanding. The principals of the Company collectively hold 10,001,188 Common Shares and 14,065,285 non-voting special shares, which are subject to a Tier 2 Value Security Escrow Agreement dated December 8. In addition, 1,544,904 Common Shares held by non-principals of the Company are subject to the Escrow Agreement.Emblem also owns 50% of GrowWise, the remaining 50% being owned by White Cedar Pharmacy Corp. White Cedar has also granted to Emblem an option to purchase the 50% it does not already own. The option is exercisable during the 15-day period immediately prior to July 26, 2019 at a price equal to one-half of the book value of GrowWise’s assets net of any arms’ length liabilities of GrowWise.The Paris, Ontario facility is located on three acres of industrial zoned lands which is suitable for significant expansion. The Existing Facility consists of a 23,500 sq. ft. production building and a separate 3,500 sq. ft. administration building. In October, 2015 Emblem purchased a contiguous 1.2 acre parcel of land with a 5,000 sq. ft. administration building. The main 23,500 sq. ft. production building has been renovated to incorporate 2,400 sq. ft. of mothering and vegetation rooms and 3,200 sq. ft. of flowering rooms together with attendant drying, packaging & fulfillment areas, vault area and administration. The production building also has an additional three growing rooms comprising 4,800 sq. ft. that are currently being completed and equipped and are expected to be put into production in February/March of 2017. Once the Phase 2 Grow Rooms are completed, Emblem will be able to produce about 1,750 kgs of medical marijuana annually.Currently trading with a market cap of C$203 million, Emblem Corp possesses a a strong management team, a state-of-the-art facility in Ontario, and a patient development program. With the favorable Canadian regulatory environment and the winds blowing towards full legalization, Emblem Corp looks to be a must-own in the cannabis space. We will be updating our subscribers as soon as we know more. For the latest updates on Emblem Corp, sign up below!Disclosure: We have no position in EMC.V and have not been compensated for this article.