Midas Letter

Midas Letter

By James West and Ed MilewskiBusinessInvesting
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Midas Letter episodes

  • Mojave Jane Brands (CNSX:JANE) to Acquire CB Asset Management
    Gary Latham, CEO of Mojave Jane Brands (CNSX: JANE) (OTC Pink: HHPHF) (FSE: 0HCN) discusses the most recent company developments. Mojave has signed a binding LOI to acquire 100% of CB Asset Management, a fully licensed cannabis operator in Coachella, where Mojave already operates out of today. The acquisition is intended to expand Mojave’s extraction footprint, bringing their capacity from 100 litres  to 170 litres a month. In addition, the acquisition grants Mojave 4.5 acres of open property that  has been graded, prepped and is ready for building of greenhouses to commence cultivation. 
    Transcript:
    James West: I’m joined now by Gary Latham, CEO of Mojave Jane Brands, trading on the CSE under the symbol JANE. Hey, Gary, welcome back.
    Gary Latham: Good morning, James, how are you?
    James West: I’m doing really well, thank you. Most recent news that really caught our attention is you signed a binding LOI to acquire 100 percent of CB Asset Management, a fully licensed cannabis operator in Coachella with a 20-year lease on six acres in the Coachella Valley. You can grow a lot of cannabis on six acres, can’t you?
    Gary Latham: You can grow a lot on six acres, so this is a great opportunity for us. We’ve got, this is actually the property that Mojave Jane operates out of today. So we share a building with, effectively with our landlord, who is CBAM, and CBAM operates a – well, we operate a CO2 extraction facility; they operate an ethanol extraction facility on the other side of the building.
    And then in addition to that, they have about 4.5 acres of open property behind the building that’s all been graded and prepped and ready to drop greenhouses on and start cultivating. So you know, if you remember, James, our strategy has always been to be able to produce the products that the market demands from us, whether it’s flower or extracted products or concentrates or whatever, and then be able to get those out to the market; and we wanted to always have control of our supply chain to be able to do that.
    So this acquisition gives us an expanded extraction footprint, adds ethanol processing to our capabilities, ups our capacity from about 100 litres a month to about 170 litres a month, with room to grow. And then also gives us all the space and opportunity we need to cultivate at the level we want to do for feeding that product engine, if you will. So it’s a win for us across the board.
    James West: Sure. Now, you changed the name from High Hampton Holdings to Mojave Jane, and what was the reason for that?
    Gary Latham: Well, Mojave Jane is really much more representative, in our minds, of a California brand, and we’re firm believers that, you know, what works in California tends to work across the US and beyond, and so we liked the idea of having a brand that was much more closely identified with our California business operations here.
    So we tested a handful of different names; we kept coming back to Mojave Jane and all the possibilities of things that we can do with that name, that you’ll be hearing about in the near future, as well. So we’re really excited about it, and we’ve gotten great response to it. And being able to grab the ticker JANE was kind of a plus, as well.
    James West: Yeah, for sure. So you’ve got now all these different brands, and I guess with six acres of production, you’re going to be able to produce all your own feedstock for all these different products. Do you see a case where you’re still looking at a situation where your products are more highly demanded than you’re able to supply, or will you be able to keep up with your supply after this transaction closes?
    Gary Latham: Well, right now, the demand for extracted products and concentrates far outstrips the industry’s ability to deliver. So we see a lot of demand for compliant distillate and compliant concentrates, and so being able to feed our own engine, so to speak, is what allows u
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  • Zenabis Global Inc (TSE:ZENA) Closes Non-Dilutive Financing With Tilray, Inc (NASDAQ:TLRY)
    Zenabis Global Inc (TSX:ZENA) CEO Andrew Grieve gives James the intel on a recent transaction conducted through High Park, a wholly-owned subsidiary of  Tilray Inc (NASDAQ:TLRY). In the terms of agreement, Zenabis will provide High Park with a monthly supply of dried cannabis, in addition to the other customers they anticipate serving. Completion of their Atholville facility along with funding to complete 130 tonnes at Langley positions them for expanding capacity to meet demand.
    Transcript:
    James West: I’m joined now by Andrew Grieve, CEO of Zenabis Global, trading on the TSX under the symbol ZENA. Andrew, welcome back.
    Andrew Grieve: Thank you for having me.
    James West: You bet. Andrew, point of interest in the market is your $30 million non-dilutive financing by a Tilray subsidiary, High Park. Curious to understand, how did that come about?
    Andrew Grieve: That came about because we had an existing relationship with Tilray where we were selling them product, and we went to them and asked if they would be interested in purchasing significantly more product on a prepaid basis. They completed site tours of our facilities to confirm that they were confident we could deliver that supply, and upon completing those site tours, they came back and they said yes. And we got a deal done very quickly.
    James West: Wow, that was quick. What specifically, in your opinion, was it about Zenabis’s operation that attracted Tilray to you guys as a partner as opposed to the vast array of companies out there they could have chosen from?
    Andrew Grieve: They already had confidence in our ability to supply quality product, because they had purchased product from us in the past. And then in addition, they went to our Atholville facility, they saw that we were essentially complete from a construction standpoint. They knew that, from a licensing standpoint, we’d already achieved the vast majority of our licensing objectives there in Atholville. They knew what we’d submitted from a licensing standpoint; they knew that that volume was more than sufficient to cover the obligations that we agreed to from a supply standpoint. And then on top of that, they visited our Langley facility and saw that we were near substantial completion on that facility, saw that we were ready to submit from a site evidence package standpoint, and were very confident in what we put forward in terms of what we would be able to produce from that facility.
    James West: Sure. Interesting. How much cannabis is $30 million worth on a prepaid basis?
    Andrew Grieve: So it isn’t actually covered in the release that we put out, and the reason why is because they can choose from a few different formats that we could provide them product in. It’s a meaningful amount of cannabis in terms of the amount that is available for purchase, but it’s not all that significant relative to our 2020 total capacity. So our 2020 production capacity is going to be at least 130 tonnes, based on what we’re nearly finished building out, and so this is not a very meaningful commitment relative to the available supply that we have for 2020.
    James West: Sure. So presumably, Tilray would be incentivized to undertake this, because you’re offering them a discount to the market price of cannabis, and not being in the press release, I don’t expect you to tell me what that formula is. But is this – and it doesn’t represent a major portion of your total production, which is great to hear. So my question for you is, does the discount that you gave to Tilray, is that something that’s going to be determined as a fixed number over the life of the supply agreement? Or is it something that is fluctuating relative to the given cost of cannabis at any given moment where they take delivery?
    Andrew Grieve: No, it’s a fixed price agreement.
    James West: It’s a fixed price agreement. Okay, so then that, presumably, means that – puts a floor price on your cannab
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  • Bruce Campbell on Top Stock to Play the Emerging US Cannabis Industry: Halo Labs Inc (NEO:HALO)
    Bruce Campbell, B.COMM, CFA, CAIA, the founder of StoneCastle Investment Management Inc. and the portfolio manager of the StoneCastle Cannabis Growth Fund (CNSX:CGOC) joins James West to discuss his expertise in the cannabis space and current attractive investment opportunities. Mr. Campbell recently highlighted Halo Labs Inc (NEO:HALO) (OTCMKTS:AGEEF)  (FRA:A9KN) in The Globe and Mail as a cannabis oils producer with a “potential high-growth story that is very much under the radar”. The Toronto-based company, which launched in Oregon in 2016, has expanded into Nevada and California and has recently struck a deal to buy Bophelo Bioscience – a medical cannabis producer in the African nation of Lesotho. Lesotho provides Halo Labs with the ability to grow great cannabis and service the 60 million market of South Africa while planning to provide Europe with extracts produced at a low cost with EU GMP standards. The StoneCastle Cannabis Growth Fund Portfolio Manager also highlights Halo Labs’ expertise in extraction and different extraction solutions. Plus, the company’s innovative product design, with their Dab Tabs and Shatterizer product catalogue, which could “revolutionize the business to a certain degree”. 
    Original article: Bruce Campbell on Top Stock to Play the Emerging US Cannabis Industry: Halo Labs Inc (NEO:HALO)©2019 Midas Letter. All Rights Reserved.
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  • Permex Petroleum (CNSX:OIL) Low Expenses and High Operating Netbacks
    Mehran Ehsan, CEO of Permex Petroleum Corporation (CSE:OIL)(OTCQB: OILCF) sits down with James in studio for an introduction into the company. Permex Petroleum is a uniquely positioned junior oil and gas company with assets and operations across the Permian Basin of West Texas, and the Delaware sub-basin of southeast New Mexico. In an economy with failing oil prices Permex operates in an environment with some of the lowest operating expenses and some of the highest operating netbacks. Ehsan anticipates an increase in production to be over 1,000 barrels a day for the first half of 2020.
    Original article: Permex Petroleum (CNSX:OIL) Low Expenses and High Operating Netbacks©2019 Midas Letter. All Rights Reserved.
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  • Honourable Deputy Prime Minister of Lesotho on Cannabis Making the Nation Famous & Respectable
    The Honourable Deputy Prime Minister of Lesotho Monyane Moleleki sat down with James West at the Cannabis Europa Conference in London, England to discuss all things cannabis within the country of Lesotho. Lesotho was the first African country to legalize the cultivation and manufacturing of cannabis and has attracted international investments from major cannabis companies. His excellency outlines the nations deep history of administering herbal medicine and how the cannabis plant fits in line with Lesotho’s traditions. Lesotho parliament has passed legislation of cannabis for pharmaceutical products and are now modernizing their regulation to become more compliant and progressive. Honourable Moleleki believes that being on the cutting edge of legal and regulatory framework, investors can feel more comfortable to invest within the country. He also discusses the country’s compliant EU GMP standards for extraction, current cannabis investment and the company’s currently growing within the country. Halo Labs Inc (NEO:HALO) (OTCMKTS:AGEEF) (FRA:A9KN) currently cultivate, manufacture and export cannabis products in Lesotho with a strategic partnership with Bophelo Bioscience. This partnership provides Halo with over a 14 hectare land package with an option on an additional 194 hectares.
    Original article: Honourable Deputy Prime Minister of Lesotho on Cannabis Making the Nation Famous & Respectable©2019 Midas Letter. All Rights Reserved.
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  • Khiron Life Sciences Corp (CVE:KHRN) Participation in National Cannabis Roundtable
    Khiron Life Sciences Corp (CVE:KHRN) (OTCMKTS:KHRNF) (FRA:4KH) Chief Compliance Officer and Former DEA Agent, Matt Murphy joins James via Skype to discusses compliance and security programs on the cultivation site and team in Latin America, along with participation in the National Cannabis Roundtable (“NCR”). As part of its leadership role in LatAm, Khiron is at the forefront of implementing rigorous, DEA-level security protocols at its cultivation site in Bogota, Colombia. With Matt’s experience, Khiron can ensure consistent regulatory standards across all operations and all jurisdictions.  Earlier this year Khiron joined the newly formed NCR, which focuses on advocating for a rational legal framework for cannabis reform in the US. Khiron will work alongside the NCR’s Honorary Chairman, John Boehner, former Speaker of the House.
    Original article: Khiron Life Sciences Corp (CVE:KHRN) Participation in National Cannabis Roundtable©2019 Midas Letter. All Rights Reserved.
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  • Dragonfly Biosciences Premium CBD Retailer across Europe

    Hannah Skingle stopped to speak with James while both attending the Cannabis Europa Conference last week in London. Skingle is the Chief Operating Officer at Dragonfly Biosciences, a private seed-to-shelf CBD company, headquartered in London with distributions across Europe. The UK has seen recent changes to medical cannabis laws, bringing with it attention to cannabis based products and increased demands for CBD health and wellness goods. Dragonfly Biosciences is well poised in that market with their CBD products in major UK supermarkets; Boots, Tesco, Sainsbury’s and premium brands such as Harrod’s.

    Original article: Dragonfly Biosciences Premium CBD Retailer across Europe

    ©2019 Midas Letter. All Rights Reserved.

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  • Deepak Anand on Supply and Distribution of CBD and Medical Cannabis in Europe

    James sits down with Deepak Anand, a well-known figure in the legal cannabis scene, and the CEO and Co-Founder of Materia Ventures. Materia Ventures deal with the supply and distribution of CBD and medical cannabis based products, predominantly in Europe. The company will be launching their products very soon in the Danish and UK markets. The CEO outlines Materia’s completed Series A round of financing, the company’s valuation and their go-public strategy. Mr. Anand also sits on the Board of the Centre for Medical Cannabis (CMC) and provides his informed insights of current cannabis regulations around the world including the United States, China, and various nations inside Europe.

    Original article: Deepak Anand on Supply and Distribution of CBD and Medical Cannabis in Europe

    ©2019 Midas Letter. All Rights Reserved.

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  • Halo Labs Inc (NEO:HALO) Global Cannabis Extraction Strategy and Timeline

    Halo Labs Inc (NEO:HALO) (OTCMKTS:AGEEF)  (FRA:A9KN) is a company focused on extraction, creating quality cannabis oils and concentrates.  CEO Kiran Sidhu shares their intention to expand globally with an African (Lesotho) production and extraction strategy, with European distribution potential.  This is part of a long-term strategy to have the ability to compete directly with countries like India and China that traditionally have low-cost production and manufacturing abilities.  Mr. Sidhu shares his timeline for their strategy and looks ahead to profitability.  He also shares his thoughts on the global cannabis demand including the often overlooked African interest in cannabis.

    Original article: Halo Labs Inc (NEO:HALO) Global Cannabis Extraction Strategy and Timeline

    ©2019 Midas Letter. All Rights Reserved.

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  • Aurora Cannabis Inc (TSE:ACB) on UK becoming Medical Cannabis Global Leader

    Aurora Cannabis Inc (TSX:ACB)(NYSE:ACB)(FRA:21P) CCO Cam Battley visits James at the Cannabis Europa Conference in London, UK. Cam Battley was a guest speaker and discusses the potential for the UK to be a leader in medical cannabis on a global basis. While regulations at the moment make it a challenging process to provide medical patients with accessible cannabis products, Battley knows that Aurora can overcome those hurdles.

    Original article: Aurora Cannabis Inc (TSE:ACB) on UK becoming Medical Cannabis Global Leader

    ©2019 Midas Letter. All Rights Reserved.

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Midas Letter RAW is the irreverent, intelligent show about investing for the little guy. Ed Milewski, former stock broker and reformed accountant brings his cynical and off-beat chart observations…