There is an interesting interview with Anthony Durkacz, Director of FSD Pharma ($HUGE) over at motherlodetv.net. (https://wp.me/p93sE0-J4) Worth reading the whole thing but a couple of takeaways:
"For FSD Pharma the medical market is more interesting in the longer term than recreational pot. “The pharmaceutical market is much bigger than the recreational marijuana market. A single medicine can have a value over 7 billion dollars but there are many different medicines for many different health ailments so compared to the recreational market it is huge,” said Durkacz."
HUGE has also got the advantage that it has worked out an agreement with Auxley, a publicly traded marijuana streaming company, to build out the actual facility. “Auxley was founded by the people who founded the Canopy Growth Hersey plant indoor grow operation. “Right now they are at our site building. We already have a 25,000 square foot grow facility which HUGE owns outright and they are building an additional approx. 220,000 square feet,” said Durkacz. “Auxley is paying for the build. We will operate the facility. The way the deal works is that we recover all the costs of growing the crop plus a 10% “kiss” and then we split the actual crop 50.1% for FSD and 49.9% for Auxley. Frankly, Auxley knows a lot more about building this sort of facility than we do.”
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The recreational market for pot is making all the news at the moment and there are plenty of publicly traded companies working in that space. But if the American experience is anything to go by, the margins in recreational marijuana are going to be shrinking as supply meets and then exceeds demand. Essentially - and particularly in Canada where "branding" and advertising will be pretty much forbidden - recreational marijuana will become a commodity.
HUGE understands that and, while they will certainly fight their corner in the recreational pot space, they are looking to the pharma end to make the real money.
It is an interesting differentiator. $HUGE shares touched .20 CDN today and as the company's strategy is understood there is every reason to think they will keep going.
