PKP gets maximum five year processing licence renewal
Our Investment Peak Processing (ASX: PKP) has now secured the maximum five-year Health Canada renewal for its Canadian THC drink processing facility.
PKP’s licence now runs to September 2031 (previous renewals had just been one year).
A pretty run of the mill permit renewal - but for us its a good sign of
The longer term license means PKP can make more extended production planning decisions.
AND sign longer-term customer manufacturing agreements.
For example when in discussions for a new processing contract, the other party doing due diligence may have flagged a risk on this, but now has confidence in the 5 year term.
Now we want to see PKP turn the surety of a longer planning window into more customer orders and sustained production growth.
PKP recently launched a new product type
Just last month PKP announced its launch into a whole new segment - 65ml THC shots:
(source)
A small 10mg serving (the maximum allowed per container under Canadian rules) that can be used as a shot or mixed into a drink.
PKP says it expects production to grow to ~1,000,000 shots over the next 12 months.
The best part is PKP can produce these “in parallel” with PKP’s existing canning lines - so it’s brand new revenue that doesn’t use up any of PKP’s canning capacity.
Nice to see PKP entering a part of the market the majors in the THC space are also entering.
Organigram (45% owned by $190B British American Tobacco) launched a similar product in March:
(source - “Shred” is the brand Organigram has over $200m+ in sales from)
So it's good to see PKP prove its tech can be applied to producing these too.
IF anyone wants to go in and launch their own “shot drink”, again, PKP would be the natural partner.
(given the confidential nature of the processing and contracts, PKP hasn’t released which products it is producing).
You can see our Deep Dive on this news here; PKP is making THC shots now - looks like they are a hit with consumers
What we want to see next from PKP
There are three things we're watching over the next 6–12 months, along with maintaining positive EBITA.
🔄 Operational updates in Canada.
PKP did ~A$3.8M in cash receipts on ~1.25M units produced in the June quarter. (source)
The revenues were up despite a planned shutdown (1.25M units in FYQ1 compared to 1.6M in the prior quarter)
We want to see PKP improve on those metrics over the coming quarters:
- 🔄 Q2-FY27 numbers.
- 🔄 Improve capacity utilisation.
- ✅ Launched new product line - THC shots
- 🔲 More new brand partnerships in Canada
🔄 More manufacturing deals signed in the US
We want to see more deals signed in the US:
- ✅ Fryday Kush (Ice Cube) - first US brand-partner deal signed
- 🔲 More US manufacturing deals
🔄 US regulatory resolution
And of course the big one - the 11 December 2026 regulatory deadline. (source)
We are hoping to see the US land on a regulated framework (or a delay) rather than a hard ban on the THC drinks industry.
