Midas Letter

3 Sixty Secure Corp (CNSX:SAFE) (OTCMKTS:SAYFF) (FRA:62P2), a wholly-owned subsidiary of 3 Sixty Risk Solutions Ltd, is a leading security provider to the cannabis sector. CEO Thomas Gerstenecker explains that 3 Sixty is the first pick-and-shovel ancillary approach to seed-to-sale security in the cannabis space. 3 Sixty provides security consulting, guarding, monitoring, and secure transportation of cannabis products across Canada. He highlights the significant need for such services in the cannabis space and notes that the company has experienced 2800 percent revenue growth in the past 16 months, with revenue now at $2.4 million monthly. The company counts industry leader Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) among its clients, as well as provincial entities, such as the LCBO and the OCS.  3 Sixty completed its RTO in January and added licensing expert David Hyde as president as part of that transaction. The company’s 2019 strategic plan includes a larger footprint in Canada and expansion to the United States.

Original article: 3 Sixty Secure Corp (CNSX:SAFE) Cannabis Security Provider Generating $2.4M in Monthly Revenue

©2019 Midas Letter. All Rights Reserved.

Algae-C is a biosynthetic company using algae to produce cannabinoids. Founder and President Dr. Mather Carscallen emphasizes the superiority of algae as a chassis because it can be grown in a variety of ways and is not dependent on specific inputs for growth. In addition, algae have an abundance of the natural precursors to grow cannabinoids, unlike yeast and bacteria. Dr. Carscallen also highlights the usefulness of algae waste products as a super food because it produces high levels of Omega 3, protein, vitamins, and minerals. He reveals that the company is undertaking commercial growth trials this summer and plans to achieve commercial scale production of cannabinoids by Q1 or Q2 2020. Many at Algae-C, including Dr. Carscallen, have significant experience producing algae at a commercial scale in the alternative fuels industry. While Dr. Carscallen believes there will always be a purist market for products derived from plant material, he suggests that biosynthetic cannabinoids will be a game changer for the space from a consistency, quality, and price perspective.

James West:   I’m joined now by Dr. Mather Carscallen. He is the President and founder of Algae-C Inc. Mather, welcome to the show.

Mather Carscallen: Thanks very much.

James West:   Mather, let’s start with an overview: what is it, exactly, that Algae-C does?

Mather Carscallen: So we’re a biosynthetic cannabinoid company, and as our name states, we produce biosynthetic cannabinoids using algae.

James West:   Does that mean that you can use algae to grow plants?

Mather Carscallen: So for argument’s sake, algae are like microscopic plants. So we’re basically taking the genes from cannabis plants and we’re putting them in the algae so that they produce cannabinoids.

James West:   And so what cannabinoids can be produced? Which ones can’t be produced, or is there any such limitation?

Mather Carscallen: There’s not really a limitation. The only limitation is just the time and energy needed to perfect the actual gene insertions and finding the strain of algae that will produce it in the quantities and quality that you’re looking for.

James West:   Okay, and why algae? I mean, others are trying to develop biosynthetic cannabinoids on yeast and bacteria, for example; what attracts you to algae?

Mather Carscallen: Right. So I mean, you can really start to see the superiority of algae when you break it down into kind of three steps. So I mean, you’ve got your inputs, your nutrients; then you’ve got the organism itself; and th

WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) (FRA:4WE) CEO Keith Merker explains the significance of the company receiving approval from Health Canada for new packaging lines. WeedMD has built a new packaging room at its Aylmer, Ontario facility, complete with two semi-automated packaging lines designed to create a significantly more efficient system. Merker believes the new system will increase both the volume of product leaving the facility and improve the company’s bottom line. WeedMD recently released its 2018 financial results, with an impressive YOY revenue increase of 465 percent. While WeedMD is in the final stages of receiving its Health Canada license to grow outdoors, the company is prepared for approval and has 25,000 clones ready for planting. Merker suggests that growing outdoors is a truly disruptive advantage in the Canadian cannabis space and suggests the bulk of the outdoor product WeedMD will grow will be used for extraction. Merker shares details of the company’s three-stage conversion of its Aylmer facility from an indoor grow space to a premier extraction processing hub using supercritical CO2.

James West:   I’m joined now by Keith Merker, CEO of WeedMD Inc., trading on the TSX Venture under the symbol WMD. Keith, welcome back.

Keith Merker: Always good to be here.

Horizons ETFs Management (TSE:HMMJ) (OTCMKTS:HMLSF) SVP Mark Noble explains the benefits of the financial services company’s two new cannabis ETFs. Horizons’ BetaPro Marijuana Companies 2x Daily Bull ETF (TSE:HMJU) is a leveraged fund offering investors 2 times the exposure to the daily performance of the North American MOC Marijuana Index. The second new offering is BetaPro Marijuana Companies Inverse ETF (TSE:HMJI) and is an inverse fund offering investors minus 1 times exposure of the daily performance of the North American MOC Marijuana Index. Noble explains that these new ETFs allow retail investors to capture short term moves in the cannabis space while providing greater liquidity and limiting risk. In particular, he emphasizes that the Inverse ETF (TSE:HMJI) offers retail investors a chance to take short positions, which can be harder to access for individual retail investors.

Narrator: Introducing the world’s first marijuana-focused ETF: Horizons Marijuana Life Sciences Index ETF: HMMJ. Diversified exposure to companies in the rapidly growing cannabis industry. HMMJ offers easy access to a new frontier of investing.

Horizons ETFs.

Neptune Wellness Solutions Inc (NASDAQ:NEPT) (TSE:NEPT) (FRA:NTU) is a B2B company producing ingredients, turnkey solutions, and white label products for CPG companies. CEO Jim Hamilton is thrilled with the company’s 2019 performance and the addition of Martin Landry to Neptune’s management team. Hamilton believes the company’s recent deal to acquire North Carolina-based hemp processor SugarLeaf Labs, LLC, is a match with significant synergies. He notes that the SugarLeaf deal provides access to lucrative opportunities in the United States while emphasizing the importance of the passage of the Farm Bill for American hemp processors. He explains that SugarLeaf’s core competency is its large-scale extraction capability, which pairs well with Neptune’s experience providing quality ingredients and solutions for CPG manufacturers. Hamilton believes demand for extracted products is under served in regulated markets and highlights the expandability of Neptune’s Quebec-based facilities.

Narrator: Neptune Wellness Solutions is a health and wellness products company founded in 1998, and is headquartered in Laval, Canada.

The company is engaged in the extraction, purification, and formulation of science-based products.

Neptune Wellness offers speciality ingredients such as Maximil, a patented ingredient that enhances the absorption of lipid-based nutraceuticals and various other marine and seed oils.

In January, Neptune Wellness received its Health Canada license to process cannabis, which allows the company to manufacture and purify cannabis extracts and cannabis oil, and to sell its services to other license-holders.

Production activities are expected to start soon at Neptune’s 50,000-square-foot certified facility in Sherbrooke, Quebec.

Neptune Wellness Solutions is listed on the Toronto Stock Exchange and the NASDAQ, and trades under the ticker symbol NEPT.

Matica Enterprises Inc (CNSX:MMJ) (OTCMKTS:MMJFF) (FRA:39N) CEO Boris Ziger provides an overview of the company and discusses Matica’s readiness for the legalization of edibles this fall. The company has cultivated its first crop at its 10,000 square foot Dorval, Quebec facility and anticipates receiving its sales license later this year. Ziger discusses the company’s financials and notes that Matica has $7 million in cash, which it will use to fund the construction of a greenhouse near Montreal. Ziger explains the advantages of operating in Quebec, which include cheaper utilities and a government mandate to purchase from Quebec LPs. Ziger shares details of the company’s recent purchase of Trichome Treats Inc, an award-winning chocolatier and explains how the move helps Matica create a line of adult-use extracts including premium edibles and beverages.

Fraser Toms:  Joining me now is Boris Zieger, the CEO of Matica Enterprises, trading on the CSE under the symbol MMJ. Boris, how are you doing today?

Boris Ziger:  I’m great, great to be here.

Vapen MJ Ventures Corporation (CNSX:VAPN) is a vertically integrated agricultural technology company based in Arizona. President and CFO Bob Brilon is thrilled with the company’s first week as a publicly-traded entity and highlights that its trading volume is increasing daily. He provides an overview of Vapen MJ and notes its exponential revenue growth over the past few years. Brilon emphasizes Vapen MJ’s key differentiators, like product quality, brand recognition, and customer service, as vital for keeping its existing customers. He discusses the award-winning Vapen brand and the company’s extraction capabilities as an important factor in sourcing partnerships and joint ventures in other states and internationally. Brilon explains that in 2018 the company generated $18 million in revenue and $6 million in EBITDA from its Arizona license and expects that revenue number to grow to $22 to $26 million next year. Vapen MJ is currently undertaking a $4 million raise and Brilon expects to use the proceeds from the raise to pursue expansion opportunities.

Narrator: Vapen MJ Ventures Corporation is an agricultural technology services and property management company. Vapen executes all aspects of cultivation, extraction, manufacturing, retail dispensary, and wholesale distribution of high margin cannabis and CBD products.

Vapen MJ has 75 million issued and outstanding shares, with inside ownership sitting at 80 percent with a three-year escrow.

Vapen MJ Ventures Corporation is listed on the CSE under the symbol VAPN.

Canopy Rivers Inc (CVE:RIV) (OTCMKTS:CNPOF) President Narbe Alexandrian shares details of the company’s strategic investment in BioLumic Ltd, a company that has created a sustainable ultraviolet crop yield enhancement system. Alexandrian explains that the company’s investment in BioLumic is its first move into the agricultural technology space and highlights BioLumic’s photomorphogenesis UVB process as an IP differentiator. Alexandrian notes that as the price of cannabis decreases, cost advantages like those provided by BioLumic can provide significant value. He discusses the company’s recent announcement that its minority investor, Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1), has entered into a supply agreement with Canopy Rivers portfolio company, PharmHouse Inc. He explains that the offtake agreement with Canopy Growth has de-risked the PharmHouse facility conversion in Leamington, Ontario. Alexandrian emphasizes the importance of the cosmetics space and addresses Rivers’ investment in High Beauty Inc, makers of cannabis beauty brand, high.

Narrator: Canopy Rivers is the investment and operating platform of Canopy Growth Corporation. The company has developed an investment ecosystem of cannabis operating companies across the Cannabis sector. Canopy Rivers works collaboratively with Canopy Growth to identify strategic counter parties seeking financial and or operating support and affiliation with a Canopy Growth group of companies. Canopy Rivers trades on the TSX Venture under the ticker symbol RIV.

Willow Biosciences Inc (CNSX:WLLW) (OTCMKTS:CANSF) (FRA:45CN) is a synthetic biology company focused on ingredient production. Willow completed a $29 million financing in April and went public last month. CEO Trevor Peters discusses the company’s interest in opioid research and efforts to develop commercial pathways to produce active pharmaceutical ingredients from cannabinoids. Peters believes Willow’s yeast-based process provides both a faster timeline and significant cost savings when compared to cultivators using plant-based ingredients. He highlights the repeatability, scalability, and purity of Willow’s process and notes the company can tailor its end product to meet the need of CPG companies and pharmaceutical customers. He predicts that once Willow is fully operational, the company will be able to produce 300 kilos of isolates every 10 days. Peters explains Willow’s recent decision to consolidate all issued and outstanding common shares of the company and reveals the process will leave the company with approximately 68 million outstanding shares.

Fraser Toms:  Hi, and we’re joined by Trevor Peters. He’s the CEO of Willow Biosciences. Trevor, how’s it going?

Trevor Peters: I’m very good, thanks. Thanks for having me.

The Chart Guys founder and analyst Charting Man Dan McDermitt discusses how the internet has empowered investors to take greater control of their financial futures. He explains that the funnel effect, which drove profits in the early days of the cannabis space, is gone. McDermitt notes that fundamentals matter significantly more right now than in previous years and are causing dramatic reactions to individual names in the space. Charting Man Dan highlights that recent S&P 500 consolidation provides a good entry point for investors looking to take positions in the cannabis space. He breaks down SPY’s latest moves and emphasizes key support levels for the index. He addresses how Canopy Growth Corp’s (TSE:WEED) (NYSE:CGC) (FRA:11L1) recent consolidation mirrored action in the S&P and discusses the possibility of CGC forming a weekly higher low. Charting Man Dan indicates that cannabis stocks now have longer-term ranges and explains Cronos Group Inc’s (TSE:CRON) (NASDAQ:CRON) (FRA:7CI) high bull volume on its monthly chart means for investors.

Fraser Toms:  Hey, we’re glad to be joined by Charting Man Dan – Dan McDermitt of The Chart Guys. He is in Asheville, North Carolina, right now. How’s it going, Dan?

Dan McDermitt: Very good, glad to be back.

Fraser Toms:  Yeah, so we were just chatting just a little bit. Just out of curiosity, I was sort of asking you how you got into trading in the first place, because you’re – as you were saying, it probably helps you’re not a typical suit and tie Wall Street guy.

Dan McDermitt: