Midas Letter

Weekend Unlimited (CNSX:POT) (OTCMKTS:WKULF) (FRA:0OS1) President and CEO Paul Chu is thrilled by the company’s good fortune. Weekend Unlimited participated in the lottery for the CSE symbol “POT” and won the right to use the ticker. Weekend Unlimited is a vertically integrated lifestyle brand play with brands such as Canna Candys and Verve beverages among its holdings. The company’s Weekend Unlimited Live is an event strategy designed to bring themed experiences to consumers. Weekend Unlimited Live is also an effective advertising strategy given the restrictive advertising rules in the cannabis space. Chu reveals that Weekend Unlimited’s Jamaican operations will have a travel experience component as well. In 2019 Weekend Unlimited is prioritizing beverages and edibles with a specific focus on intimate derivative products.

James West: Paul Chu joins me now. He’s the CEO of Weekend Unlimited Inc. Trading on the CSE under the symbol POT. Paul, welcome.

Paul Chu: Hello there.

James West: Good to see you. How are you?

Paul Chu: Fantastic. A lot colder than where I last saw you.

James West: I’m sure. You recently changed your trading symbol from YOL

DionyMed Brands Inc (CNSX:DYME) (OTCMKTS:HMDEF) is a vertically integrated, multi-state, cannabis brands company. CEO Edward Fields explains that 50 percent of DionyMed’s revenue is from direct-to-consumer sales. While the company is vertically integrated in Oregon, in California DionyMed focuses on direct-to-consumer distribution. DionyMed fulfills all orders for Eaze, an online cannabis retailer, in the Bay area. DionyMed is expanding to the rest of California under its own direct-to-consumer brand, Chill. Fields believes value accrues to brand holders and DionyMed aims to offer consumers an Amazon Prime-like experience. Fields anticipates the House of Representatives attempting another vote on banking normalization for the US cannabis industry and suggests that when such normalization occurs, the valuations of US cannabis companies will triple.

James West: I’m joined now by Edward Fields CEO of DionyMed Holdings Inc. Trading on the CSE under the symbol DYME. Edward, welcome to the show.

Edward Fields: Thanks so much, James. It’s great to be here with you.

James West: You bet, Edward. Can we start with an overview of what is the business of DionyMed?

Edward Fields: Yeah look, this is a cannabis brands company, 50 percent goes through traditional retail distribution and 50 percent of our revenue is via direct-to-consumer. We are the largest direct-to-consumer fulfillment platform in the industry delivering over 45,000 cannabis direct-to-consumer experiences every month.

James West:  Oh, wow. Okay. So, do you guys actually are you are vertically integrated supplier of the product or d

48North Cannabis Corp (CVE:NRTH) (OTCMKTS:NCNNF) CEO Alison Gordon discusses the merits of outdoor growing. Gordon credits the agricultural experience of Co-CEO Jeannette VanderMarel for providing the company with the knowledge necessary to undertake an 88 acre outdoor grow in 2019. 48North’s outdoor grow is 3 million square feet and will produce 40,000 kilos of cannabis at $0.03 a gram. Gordon believes the current supply shortage will be exacerbated by the legalization of edibles this fall and she sees outdoor growing as a possible solution to this problem. Gordon addresses the potential of biosynthetics to mass produce cannabinoids cheaply, but emphasizes no company has reached this stage. 48North has seen a surge in trading volume and Gordon credits this to the increased understanding of the importance of outdoor growing as a value catalyst for the company.

James West: Joining me now. Without further Ado and with much fanfare is the lovely and talented Alison Gordon CEO of 48 North. Alison!

Alison Gordon: I’m excited. I’m coming back next week to see everybody. You’ve got some big guests on.

James West: Big guests? You mean like tall or you mean like…

Alison Gordon: I mean like big names.

James West: Big names…

Pond Technologies Holdings Inc (CVE:POND) (OTCMKTS:IOGIF) CEO Steve Martin shares details about the Cantech Investment Conference and provides an update on the company’s acquisition of Regenurex. One takeaway from the conference is that more and more investors are focused on sustainable technologies, which is good news for Pond because its algae production process fits evolving market tastes. Martin also emphasizes algae’s value as an ingredient in health and wellness food products. He discusses Pond’s recent deal to acquire Regenurex Health Corporation, a health and wellness company that produces antioxidant products. The deal allows Pond to use its algae in antioxidant products, while utilizing Regenurex’s product knowledge and existing channels.

Fraser Toms:  Hey gang. We’re here with Steve Martin, who is the CEO of Pond Technologies Holdings Inc., trading on the TSX Venture under the ticker POND. Steve, how’s it going?

Steve Martin: It’s going very well, other than being on the ice planet of Hoth today, and I’m dressed appropriately for it, for shoveling and moving snow.

Fraser Toms:  Oh, yeah, today I had like 2.5 feet of snow in my driveway, it was a mess, which prevented a lot of people, potentially, from coming to Cantech, where you guys have your booth on display.

Steve Martin: We do.

Fraser Toms:  So how’s that been so far?

Steve Martin: Well it seems like quite a few people made it there, you know, I think it’s an important enough event, and people want some exposure to the kind of technologies and the opportunities that are around. We’re been a great show for us; we had many past investors and many possible

iAnthus Capital Holdings Inc (CNSX:IAN) (OTCMKTS:ITHUF) (FRA:2IA) CEO Hadley Ford provides a recap of the company’s completed merger with MPX Bioceutical Corp (CNSX:MPX). Ford explains that there are 3 keys to success for US cannabis companies and the MPX deal helps iAnthus meet each condition. The deal grows iAnthus’ footprint as a MSO, was finalized at a reasonable cost to capital, and grows an experienced team that can replicate the company’s products and expansion process market by market. The company will continue to scale its size and profits; it has increased its footprint to 11 states after receiving its most recent license in New Jersey.

Narrator: iAnthus Capital Holdings owns and operates licensed cannabis cultivation, processing, and dispensary facilities throughout the United States. iAnthus announced that they have acquired that they have acquired all of the issued and outstanding common shares of MPX Bioceutical Corporation.

The combined company now has operations in 11 states, that will permit iAnthus to operate 63 retail locations and 15 cultivation and processing facilities. They have retail and production capabilities in Arizona, Maryland, Nevada, California, Massachusetts, and New Jersey, which include existing assets in New York, Florida, Massachusetts, Vermont, Colorado and New Mexico.

iAnthus Capital Holdings trades on the CSE under IAN.

BLOCKStrain Technology Corp (CVE:DNAX) (OTCMKTS:BKKSF) uses a blockchain platform to test, register, and track cannabis. CEO Robert Galarza describes his company as “23andMe for the cannabis industry.” He emphasizes the importance of product consistency and establishing consistent strain identities, especially in the medical cannabis space. BLOCKStrain’s technology can help LPs achieve product consistency and the company offers value added services such as providing LPs with genetic data to track plant evolution. By creating a cannabis registry, BLOCKStrain technology helps distinguish legal cannabis from illicit sources. BLOCKStrain generates revenue through its cannabis testing program.

here with me. He is the CEO of BLOCKStrain Technology. Robert, welcome.

Robert Galarza:    Thank you for having me.

James West:   Yeah, Robert, so I actually caught a couple of seconds of your speech at Cantech, and then I had some guy walk up to me and start just yammering in my ear and I was like, ‘No, I want to hear this!’ But I was lost because of my unfortunate social proclivities.

Robert Galarza:    It happens. When you’re popular, it happens. It’s not a problem.

James West:   [Laughter] Well it’s more due to infamy at that point. Um, so Robert, tell me about BLOCKStrain Technology; what does it do?

Robert Galarza:    Yeah, really at the core, we’re, like the 23andMe for the cannabis industry. So we have an extensive background in the space, we’ve been in it for eight years on the tech side; California-based, initially, and we moved to Canada in 2015. We’ve be

AlphaNorth Asset Management is an investment firm primarily focused on Canadian small cap names. Portfolio Manager Tina Byers, CFA explains that AlphaNorth manages a hedge fund prioritizing sub-$100 million market cap companies with the potential for high-growth as well as two mutual funds with focused on companies with market caps between $100 million and $1 billion. Byers reveals that the hedge fund is focused on technology and biotechnology companies but also has a stake in several resource plays. She discusses the impact of the cannabis sector on the resource space and admits that the cannabis boom has impacted retail commodities investing. This is especially true in the case of industrial metals, which are slower moving and cannot currently compete with the returns generated in the cannabis space. Byers points to Yangarra Resources Ltd (TSE:YGR) (OTCMKTS:YGRAF) (FRA:702B) as a name to watch because the company grew its production by 65 percent in 2018.

James West:   So Tina, tell me: what do you do at Alpha North Asset Management?

Tina Byers:   I’m a portfolio manager at Alpha North, so we have three funds. Our flagship fund is a hedge fund; we look at sub-$100 million market cap companies, and it’s diversified, so really focusing on high growth opportunities. And we have two mutual funds as well that are focused on the 100 million to billion market cap. So, mostly small and micro cap space.

James West:   Okay. Would it be impertinent to ask how much assets under management at Alpha North?

Tina Byers:   We have about 40 million right now.

James West:   Okay, great. You – do you guys participate in the cannabis space at all?

Tina Byers:   We do. In terms of what we’re invested in, we haven’t been looking strictly at the LPs, I guess. We do trade them in and out; in terms of an investment, we think that a lot of them are overvalued, but we’ve been looking a lot at ancillary services like extraction companies or some technology companies or beverages – kind of a different angle to the cannabis space that I think is a little bit more undervalued.

James West:   Wow. That’s probably a good thing, especially looking at the LP prices today. Okay, so what sector is Alpha North most interested in, would you say, in terms of, you kn

Argo Gold Inc (CNSX:ARQ) (FRA:P3U) (OTCMKTS:ARBTF) Field Geologist Bill Kerr provides an update on the company’s Woco Prospect drill program and explains the history of gold discovery in the area. Argo has begun a 2500 metre drill program and plans to drill approximately 20 holes over the course of 30 days at the Northwestern Ontario site. The site features high-grade, surface showing gold that expands at depth. Argo’s drill program will be the first in the area since 1994. The Woco Prospect is situated near four existing mines and Argo controls the southern extension of the Uchi Lake Prospect in addition to Woco. Kerr walks viewers through issues with the reporting from the area’s historic drill programs and shares his optimistic outlook about Argo’s current Woco Prospect exploration.

Ed Milewski:  Joining me now we have Bill Kerr, field geologist with Argo Gold Mines. Bill, nice to see you.

Bill Kerr:    Thank you for inviting me.

Ed Milewski:  And I understand you’re about to head up to the Woco project, which is your flagship project?

Bill Kerr:    Yeah, it’s a property just east of Red Lake, and we’re starting a 2,500 metre drill program about a week from now, a week and a half fr

Analyst Dmitry Zaytsev has a bearish outlook regarding upcoming financials in the cannabis space. He notes that the average OCS purchase is approximately $70 and estimates Canadian recreational cannabis revenue in calendar Q4 2018 to be $150 million. He suggests LPs captured 60 percent of that recreational total; as a result, the LPs are competing for approximately $90 million in recreational revenue. Consequently, Zaytsev thinks there is a disconnect between established revenue numbers and analysts’ predictions for upcoming financial reporting. One company Zaytsev believes will hit its targets is Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) (FRA:21P). Zaytsev attributes the recent surge in the Canadian cannabis space to short covering and FOMO sentiment. Ultimately, he believes US companies offer a better value proposition and are more likely to deliver better revenue numbers than the Canadian names.

James West:   Joined now by Dmitry Zaytsev. Dmitry, welcome back.

Dmitry Zaytsev:    Happy to be here, James.

James West:   Dmitry, you have a less than rosy outlook on upcoming financials that are going to be released starting very quickly here. Give us an overview of what you’re thinking.

Dmitry Zaytsev:    Yeah, so just big picture, I don’t know if it’s less rosy, but I think it’s good to be realistic about what the expectations are from analysts; what the expectations are from investors; and what the numbers are that are actually coming out.

So on this first slide, just to remind everyone, you know, share prices go up and down, but the market capitalization of a lot of these firms has rallied significantly. So I have the Top 8 cannabis firms by market cap here, that are based in Canada.

James West:   And those numbers are in the billions on the left?

Dmitry Zaytsev:    So it’s in the millions, but it’s 20, yes, so it’s 20 billion, for example, if you’re looking on the fourth line there.

James West:   Interesting. So WEED’s well up above 20 billion.

Dmitry Zaytsev:    Yeah. And so some of the deals, you know, haven’t gone through yet, so it’s as deals close and, you know…

James West:   Can you put that chart up again, please? Thank you. Okay, so Tilray is 25 billion; oh that’s when it was at $300 a share.

Dmitry Zaytsev:    Yeah, and this is in Canadian dollars, right?

James West:   Okay.

Dmitry Zaytsev:    So th

Canada House Wellness Group Inc (CNSX:CHV) (OTCMKTS:SARSF) (FRA:509A) is an integrated cannabinoid therapy company. Founded by military veterans, Canada House Wellness serves veterans and non-veterans alike. CEO Chris Churchill-Smith explains that the company has three subsidiaries: Canada House Clinics, Abba Medix, and Knalysis Technologies. Canada House Wellness has 12,000 registered patients through Canada House Clinics and has 11 clinics across the country. Churchill-Smith projects the company’s LP, Abba Medix, will produce 2,000 to 3,000 kilos of premium cannabis at its Pickering facility and that product is available to patients through Canada House Clinics. Abba Medics recently partnered with Cannabis OneFive as part of a move toward earning EU GMP certification.

James West:   Hey, I’m with the CEO of Canada House Wellness now, Chris Churchill – sorry, it was hyphenated.

Chris Churchill-Smith:  That’s right, Chris Churchill-Smith.

James West:   Chris Churchill-Smith.

Chris Churchill-Smith:  You’re halfway there.

James West:   All right! Chris, it’s the first time