EXMceuticals Inc. - Initiation of Coverage

Emerging low-cost operator in the high growth CBD and cannabis extracted ingredients market with the potential to create the world’s largest cannabis ingredients supply chain solution

EXMceuticals (EXM) is focused on the sustainable cultivation of cannabis and hemp, from which it will extract and sell pharmaceutical grade ingredients. It intends to be the largest volume, lowest cost producer and supplier of cannabis ingredients and cannabidiol (CBD) products to the pharmaceutical, nutraceutical, therapeutical & cosmetic markets.

  • International footprint

    EXM is headquartered in Canada, with its cultivation operations located in several countries in Central/Southern Africa - Uganda, Malawi & the Democratic Republic of the Congo (DRC). In Portugal, EXM has applied for a license to establish a research lab, a nursery and a center for processing & distribution, with the facility acting as a base for distribution in the EU and North America.

  • Africa an ideal location for the expansion of cannabis/hemp cultivation

    Central Africa provides an ideal location for cannabis cultivation, particularly given the favourable climate, quality of soil and availability of labour. In the DRC, EXM has been granted first right of refusal over concessions of over 100,000 acres, giving it the potential to create one of the largest cannabis ingredients production facilities in the world.

  • Focus on providing high quality ingredients to global players

    EXM’s target clients will be operators in the pharmaceutical, therapeutical, nutraceutical & cosmetic industries which require large volumes of high quality cannabis derived ingredients, primarily CBD & terpenes, for their products. EXM is looking to offer a secure ingredient supply chain & plans to enter into long-term off-take agreements, as well as explore opportunities to sell in the spot market. The recreational cannabis market will not be targeted.

  • Legalisation & regulation of cannabis provides huge growth opportunities

    Bank of America Merrill Lynch estimates that the total addressable global cannabis market (legal + illegal sales) is currently worth US$166 billion. This highlights the huge growth potential for industry participants as governments continue to legalise and regulate the market. In addition to this, it estimates that CBD in the three core markets of the US, Europe, and Canada, could represent roughly US$7 billion today, growing to nearly US$40 billion by 2032.

  • Valuation suggests significant upside potential

    Our DCF valuation is $389.1 million, or $7.65 per share, almost 6 times the current share price. This assumes funding of $15 million in 2019. Being highly conservative in our assumptions, we see significant upside potential to our valuation. Accordingly, we initiate coverage of EXMceuticals with a stance of Conviction Buy.


    EXMis a research client of Align Research. Align Research own shares in EXM. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/

    For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

Table: financial overview
Year to June 2016A 2017A 2018A
Revenue (C$) - - -
Net income (C$) (304,074) (154,003) (334,790)
Source: CSE listing document