Midas Letter

Radient Technologies Inc (CVE:RTI) (OTCMKTS:RDDTF) (FRA:RD8) is an extraction solutions provider that produces cannabis resin. CEO Denis Taschuk discusses the company’s strategic partnership with industry heavyweight Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) (FRA:21P). Aurora holds a 15 percent stake in Radient and can increase its ownership share to approximately 20 percent of Radient. While Radient’s revenue projections vary from product to product, the company’s recent announcement that it had received its Health Canada standard processor license was followed by a spike in its share price. Taschuk anticipates commercial production beginning by the end of February or the start of March and acknowledges the company will be focused on meeting its commitments to Aurora in 2019. Taschuk is not worried about market saturation in Canada and notes that the European demand for oils is considerable.

Narrator: Radient Technologies is a Canadian manufacturing company creating natural ingredients for customers in the food and beverage, supplement and pharmaceutical industries.

Radient has developed a new technology for the extraction of active ingredients from cannabis and hemp. Its patented, microwave-assisted processing technology is based on the selective heating of moisture that is present in natural materials, using microwaves as the energy source.

The technology creates a targeted, pressure-driven extraction process.

Radient Technologies trades under RTI on the TSX Venture.

Horizons ETFs Management Senior Vice President Mark Noble addresses the impact of the Farm Bill’s passage on TSX-listed companies. Noble notes that the company’s fund, Horizons Marijuana Life Sciences Index ETF (TSE:HMMJ) (OTCMKTS:HMLSF), is invested in companies listed in Canada that operate legally. As a result, the fund does not have exposure to companies with US cultivation to stay aligned with the TSX’s rules. Noble addresses Canopy Growth Corp’s (TSE:WEED) (NYSE:CGC) (FRA:11L1) recent New York State hemp license and notes that as the license is legal because of the Farm Bill, it is compliant with TSX rules. Noble discusses the potential size of the global medical cannabis market and estimates it at $55 to $70 billion annually.

James West: I’m now joined by Mark Noble. He’s the Executive Vice President of Horizons ETFs. Mark, welcome.

Mark Noble: Hey, great to be here.

James West: You bet. Mark, it’s your first time here.

CB1 Capital Management CIO Todd Harrison shares his opinion on 2019 cannabis industry catalysts. He discusses the possibility of the World Health Organization voting on the rescheduling of cannabis in March; however, he believes the issue is more likely to be addresses in 2020. Harrison is optimistic that recent comments by the nominee for US Attorney General, William Barr, will lead to reconciliation between state and federal law as it pertains to cannabis. Harrison emphasizes the importance of banking normalization and reform for the US cannabis industry and believes when such reforms are enacted, institutional investors will flood the space. While cannabis is a crop worth $300 billion worldwide, CB1 Capital also sees it as an ingredient with a $1 to $2 trillion market cap globally. Harrison likes multi-state operators like iAnthus Capital Holdings Inc (CNSX:IAN) (OTCMKTS:ITHUF) (FRA:2IA) and KushCo Holdings Inc (OTCMKTS:KSHB) as a picks-and-shovels play.

Todd Harrison: How you doing James?

James West: I’m rocking the free world thanks. A bit of a dip in at least a pause in the effusive upside in the cannabis space lately today.

Todd Harrison: Yeah, a little bit. It’s called gravity. I mean, I think that MJ is up 60 some odd percent from the December low in a straight line. So, you know a little back end fill probably makes sense you could argue it’s healthy, but seeing a lot of rotation between Canada and the US.

You know, we got a lot of catalyst in front of us. I think we talked about it last time we were on the show in terms of some of the things we’re looking at going forward, but happy to walk through those two with you.

James West: Yeah, you bet tell me about the catalyst you see going forward.

Todd Harrison: Well, I mean there’s a few that we just had you know, the WHO, this was very odd in November, the World Health Organization actually, you know came out with your recommendation for cannabis their recommendation to the United Nations regarding rescheduling.

Whether or not that can make it into the March vote for the UN remains to be seen that’s been a lot of chatter soft chatter that this is going to be a 2020 vote but hope springs eternal, you know, if we can get this thing rescheduled on global basis at think it’s going to open up a lot of doors. So that’s one thing th

New Frontier Data is a data analytics platform providing unbiased and vetted industry reports for the legal cannabis sector. Founder and CEO Giadha Aguirre De Carcer reveals New Frontier Data helps stakeholders and operators understand both a macroeconomic view of the industry as well as provides the ability to monetize specific data sets. The New Frontier Data platform has an index tracking all publicly traded cannabis companies in Canada and the United States and closely monitors additional hotbeds like Germany, Australia, and Israel. She notes a key distinction between North American markets, which are cannabis-focused, and the rest of the world, which is hemp-centric. She reveals the most difficult aspects of the cannabis space to track have to do with dosage and strains because of the lack of standardization. For research results to improve, greater standardization is integral.

Brandon Colwell:   Joining us all the way from Washington – Giadha, how are you doing today?

Giadha Aguirre De Carcer:    I’m doing great, thank you for having me.

Brandon Colwell:   Absolutely. Now, I’m not sure when they finally cued in the microphone, there – I hope you heard the segue, because that was perfect to what we were just talking about, is that a lot of people right now are seeing so many different… no they hadn’t? But we’re speaking about so many different players right now, and there’s so much going on in the Canadian landscape, in the United States, and abroad, but there aren’t many people out there doing a good job of measuring that. And at New Frontier Data, that’s something where you specialize in.

Giadha Aguirre De Carcer:    Indeed, it was quite a perfect segue, and I was listening to the segment – very interesting, I actually agree with a lot of what you’re saying. So the market is certainly getting very crowded.

But yes, so New Frontier Data, we’re a Big Data company, we cover solely the cannabis industry globally. We’re a bunch of data geeks, and we provide very objective – we do not take a position in any way – intelligence, in the cannabis sector.

Brandon Colwell:   Absolutely, and that’s needed. It really, really is, because there’s too many guessing, there’s too many people going with speculation and all that, and you know, when you’re looking at these larger banks and these larger companies who you actually see as this legitimate sector that has been coming out of what has been in prohibition for many, many years, a lot of people who thought this was a flashy thing to get into, they’re going to start fading, and real companies are going to start moving forward. And I can imagine you’re going to be tracking who those people are going to be.

Giadha Aguirre De Carcer:    Indeed, absolutely. In fact, funny enough, you were asking how many companies that are currently publicly traded; we just launched on our platform, which is called Equio – actually is from th

PI Financial Corp Special Situations Analyst Jason Zandberg, CFA shares his take on recent developments in the cannabis space. Zandberg addresses the glut of companies that have gone public recently. He highlights names like OrganiGram Holdings Inc (CVE:OGI) (OTCMKTS:OGRMF) (FRA:0OG) and the Supreme Cannabis Company Inc (TSE:FIRE) (OTCMKTS:SPRWF) (FRA:53S1) that he thinks have performed well in the Canadian recreational market. Zandberg examines the advantages of the Florida market in terms of size, recent regulatory changes, and its possibility of going recreational. The PI Financial Corp analyst notes Trulieve Cannabis Corp (CNSX:TRUL) (OTCMKTS:TCNNF) caught the market by surprise, winning a ruling that allows the company to secure the state’s maximum 30 cannabis retail licenses in addition to its 14 retail locations that existed before the regulations were introduced. Zandberg highlights that Florida’s repel of its ban on smoking cannabis will increase the number of patients in the state and drive retail progress. He discusses US multi-state operators with market caps between $2 and $5 billion dollars like Acreage Holdings Inc (CNSX:ACRG.U) (OTCMKTS:ACRGF).

Brandon Colwell:   Joining us live from Vancouver is Jason Zandberg, special situations analyst at PI Financial Corp. How are you doing today, my good man?

Jason Zandberg:    Fantastic, thanks f

Dixie Brands Inc (CNSX:DIXI.U) (FRA:0QV) designs and manufactures cannabis relief products. CEO Chuck Smith shares details of Dixie’s joint venture with Khiron Life Sciences Corp (CVE:KHRN) (OTCMKTS:KHRNF) (FRA:4KH). The agreement gives Dixie access to the underdeveloped Central and South American cannabis space, a market of more than 600 million customers. Smith believes the partnership makes sense for both companies as Khiron’s compliance and Latin American footprint is unmatched, while Dixie has an extensive portfolio of CBD and THC products. The passage of the Farm Bill opens up broad scale distribution options, which the company is prepared for with established products such as its CBD pet platform and its human wellness products. Dixie’s goal is to be a global leader in cannabis consumer packaged goods and the company plans to expand to 4-6 news states in 2019.

Chuck Smith:  The Khiron deal is transformational, you know, for the company, and I can’t tell you how excited I am about it. This really opens up 600-plus-million potential consumers for a region that has up to this point been under-developed and under-tapped for the cannabis market that is growing very fast. As you can see the various companies coming online with either a medical regime or a CBD and THC regime.

Sean Dollinger, Co-Founder and Former CEO of Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) (FRA:M5BQ) discusses the circumstances of his termination by the company’s Board of Directors. Dollinger explains that his termination was the result of a special committee led by Brandon Spikes and Laurens Feenstra. The committee was convened to investigate allegations made as part of a Citron Research short seller report released when Namaste was in the midst of a bought deal in the fall. Dollinger reveals the allegations were investigated by bodies such as the CSE, and no improprieties were found. Dollinger indicates the case is already being reviewed by the Ontario Superior Court.

James West:   We’re joined now by Sean Dollinger, founder of Namaste, Inc. Sean, welcome back.

Sean Dollinger:    Hey, thanks for having me on, James.

James West:   Sean, bit of a surprise, I’m going to say it – [laughter] – just a surprise, palace coup, I don’t know what you call it. The Board of Directors at Namaste has tried to terminate your contract. You’re initiating a legal response. I don’t want to jeopardize your legal response by asking the wrong thing, but first, let me just ask you: does the representations put out in the press release by the Board of Namaste as it currently stands, ex of you, is any of that accurate?

Sean Dollinger:    Well, let’s start off by going back to that it’s a special committee that went ahead and did this. Just for the record, obviously, as you said, I started this company from scratch with Kory Zelickson, who we co-founded this basically from my garage just five years ago, right? And you know, we’ve worked extremely hard, and over those years, we’ve put everything into it. And then this special committee obviously that was put together to make this decision, were two individuals, right? It’s basically Laurens Feenstra and Brandon Spikes, who joined the Board just last March.

But they haven’t really been involved with the day-to-day or understanding what this company is really all about. You know, like, for example, Branden Spikes, I’ve never even met him face to face. He was supposed to come in last Friday for the whole meeting and the interview to review all the findings, and he lost his passport while he was at the airport, and he doesn’t even come in for the meeting to meet face to face. And even our Board calls, the whole time on Board meetings, he would be busy, you know, doing other things.

And then Laurence, who works for Google, he was very bus

Origin House (CNSX:OH) (OTCMKTS:ORHOF) (FRA:CY4) President and General Counsel Afzal Hasan talks about the company’s recent brand acceleration partnerships. Origin House partners with unique and exciting brands and entrepreneurs in California and uses its expertise and vertically-integrated platforms to grow its brand partners. The company’s deals with Humboldt’s Finest and Henry’s Original exemplify this strategy and Hasan notes that both deals support communities that are critical for the long-term success of the cannabis industry. Hasan reveals that because Origin House is involved in every step of the value chain , the company can offer partnering brands a selection of services, which gives Origin House significant flexibility. Hasan shares his thoughts on the Ontario retail lottery process, and indicates that while Origin House was interested in discussing potential working arrangements with the winners, no rational deals were available.

James West:           How have you been?

Afzal Hasan:  Great, thank you. Thanks for having me on again.

James West:   Yes, you bet. So Origin House, this is interesting, is coming close to the stock price that was at when I last started accumulati

AltaCorp Capital Inc Research Analyst David M. Kideckel, PhD, MBA provides an update on AltaCorp’s operations and shares his thoughts on the emerging biosynthetic cannabinoids space. Backed by Western Canada’s largest bank, ATB Financial, AltaCorp is the only firm to cover medical, pharmaceutical, and recreational cannabis from an equity research standpoint. Significantly, AltaCorp is the only company covering GW Pharmaceuticals, plc (NASDAQ:GWPH) (FRA:GWZA), makers of the drug Epidiolex. Kideckel notes that large scale equity deals are still the missing link for the sector. Kideckel discusses the emergence of biosynthetic and chemically derived cannabinoids in the space, which are cheaper to produce and provide higher percentages along with greater purity.

Benjamin Smith:    Welcome to Midas Letter Live. Today in studio we have a very special guest: I’m with David Kideckel from AltaCorp Capital by ATB Financial. David, welcome to the show.

David Kideckel:    Thanks for having me, Ben.

Benjamin Smith:    Now getting right into things here, I know you’re a research analyst at AltaCorp, and you’ve managed to raise a $57 million equity raise for HEXO Corp recently, and you also have other significant deals along with that in the cannabis space. Now, what – are you considered one of the main book runners and co-managers in the space?

David Kideckel:    Sure, so let me start off by just giving a preface: I haven’t raised the money, in fact, I’m in research; that would be our banking team that’s raised the money. But certainly we were a co-manager with HEXO, involved in a number of other multiple deals very recently, including Cardiol Therapeutics on the TSX, a cannabinoid-derived pharmaceutical company; Origin House, Fire & Flower, which is a retail company that will be going public within the next two weeks.

So we’re a very well-diversified or positioned in a very well diversified way. On the one hand, from a research standpoint, we cover medical and recreational cannabis, and then on the other side, we also cover cannabinoid-derived pharmaceuticals.

Now, at AltaCorp Capital, we’re backed by ATB Financial, or as I like to say, probably the best well-kept secret on Bay Street. ATB Financial, the largest bank in all of western Canada. So as a corporation, AltaCorp Capital, what we offer on the one hand is the capital markets, that’s research, sales and tr

Enthusiast Gaming Holdings Inc (CVE:EGLX) (OTCMKTS:EGHIF) Founder and CEO Menashe Kestenbaum explains the importance of the video game industry and the growth of esports. Kestenbaum reveals that the industry is worth $150 billion annually, with esports constituting $2 billion of that revenue by 2020. Enthusiast Gaming is a lifestyle brand for gamers that has grown from 75 million community members in October to 125 million members today. When Enthusiast Gaming launched in 2016, it generated $350,000 in revenue and Kestenbaum anticipates generating $10 million this year. Kestenbaum acknowledges that different types of gamers have different lifetime value to Enthusiast Gaming. This understanding informed the company’s decision to purchase The Sims Resource, a Sims gaming online space. The Sims Resource has 90 million users, the vast majority of who are female gamers, and generates $5.25 million EBITDA.

James West:   Menashe Kestenbaum joins me now. He’s the CEO of – are you ready for this? I don’t know, where did it go? The Gaming company, goddamn it.

Menashe Kestenbaum: Enthusiast Gaming.

James West:   Enthusiast Gaming. Are you a gaming enthusiast?

Menashe Kestenbaum: Yes.

James West:   That’s an understatement? All right, let’s start off with –

Menashe Kestenbaum: Let’s start off with what is an enthusiast gamer, because you asked am I –

James West:   Tell me what an enthusiast – boy, you interview me! Okay, what is an enthusiast gamer?

Menashe Kes