Isracann Biosciences Inc., an Israel-based company, received the necessary plant design and land use permits from the Israeli Ministry of Agriculture. Isracann’s plans call for the construction of greenhouse facilities, which will be built to comply with the Israeli Good Agricultural Practices Guidelines (IMC-GAP) and Good Safety Practices Guidelines (IMC-GSP). It will be over 200,000 square feet.
The company Isracann Biosciences (WKN: A2PT0E) is pleased to announce that it has received the necessary plant design and land use permits from the Israeli Ministry of Agriculture.
This will allow them to prepare the building permit and award construction contracts for the planned construction “Phase I.”
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Isracann Biosciences expects to begin cultivation in 2020
Before construction can begin, the building project must be approved by the Israeli settlement commissioner and the Israeli Ministry of Health.
These approvals are still pending, but are expected in a few weeks. The company will soon complete the contract award, so it is believed that nothing should stand in the way of construction starting this year. The significant price increases are expected in the coming weeks.
At present, 230,000 square feet of arable land are fully financed so that cultivation can begin as early as the first quarter of 2020. In the first year of production, a turnover of $28 million is already expected.
Israeli company expects quick returns
Canadian cannabis companies are currently valued at 4.9 times their annual turnover. This would mean a rapid increase in Isracann’s shares price, as the company is currently valued at less than two times its annual turnover.
We also expect strong margins and a rapid return on investment due to low cultivation costs of $0.40 per gram of cannabis. This is less than half the cost in Canada.
“Phase I” comprises the production of two Isracann Biosciences plants with a total area of up to 30,000 square meters. Each of the greenhouses is based on a 5,700 square meter floor plan with an estimated annual production capacity of 5,750 kg of dried cannabis flowers.
The facilities will be built to comply with the Israeli Good Agricultural Practices Guidelines (IMC-GAP) and Good Safety Practices Guidelines (IMC-GSP).
Isracann Biosciences competes with IMC Cannabis
The only competitor currently holding an Israeli asset is IMC Cannabis. In the last financing round, the company accumulated capital at a valuation of $130 million.
Isracann Biosciences (WKN: A2PT0E) is currently valued at just $36 million and, therefore, it has considerable catch-up potential.
Some major investors and banks invested $7.5 million (CA$10 million) in Isracann Biosciences (WKN: A2PT0E) at a price of $0.38 (CA$0.51) in the last financing round.
There is the opportunity to enter at a lower price than major investors, at a current price of $0.27 (CA$0.36).
Currently, the company is valued at just $36 million, with over $15 million in cash in the company treasury. Comparable companies in Canada usually have a valuation of over $200 million.
We are therefore firmly convinced that Isracann (WKN: A2PT0E) will climb towards the mark before the end of the year, as the current market capitalization does not reflect a fair valuation in its approach.
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