Midas Letter

Cognetivity Neurosciences Ltd (CNSX:CGN) (OTCMKTS:CGNSF) (FRA:1UB) creates cognitive testing technology for early and quick dementia detection. COO Tom Sawyer provides an update on the company’s 2019 plans. Sawyer sees a bifurcation in the market for Cognetivity’s technology between clinical and non-clinical use. In terms of non-clinical uses, Cognetivity’s technology can be used in health care monitoring apps by individuals who want greater control of their health. Sawyer notes this market split is essential for Cognetivity, as the non-clinical applications of the company’s technology represent opportunities to generate profit before the clinical uses are officially approved.

Fraser Toms:  Hey, everybody, I’m joined by COO of Cognetivity Limited, Tom Sawyer. Tom, how’s it going?

Tom Sawyer:   Very well, thanks. Thanks for having me on.

Fraser Toms:  No problem. So I see you guys were down at the Cantech conference there. How’s that been going?

Tom Sawyer:   It’s been good. Busy day – my colleague’s giving me a talk right now, and a lot of good meetings, so yeah, it’s been positive, thank you.

Fraser Toms:  Awesome. So for those who don’t

Nutritional High International Inc (CNSX:EAT) (OTCMKTS:SPLIF) (FRA:2NU) Co-Chairman  Adam Szweras shares the company’s plans for a busy 2019. Nutritional High has a West Coast footprint with a presence in California, Nevada, Oregon, and Washington in addition to operations in Colorado and Illinois. Nutritional High is fully integrated in California and Colorado, and has made impressive steps in terms of its distribution platform. The company’s distribution gross margin in Colorado is 18-20 percent and its wholly-owned California distributor Calyx now generates profits between $1.3 and $1.5 million monthly. Nutritional High’s expertise is in extraction and edibles manufacturing and is producing Marley Natural products in Washington and Oregon. Nutritional High has plans to expand its Nevada operations and has launched a joint venture in Canada.

James West:   Joining me now is Adam Szweras. He is the co-chairman of Nutritional High, trading on the CSE under the symbol EAT. Adam, welcome.

Adam Szweras: Thank you, thank you for having me.

James West:   Adam, Nutritional High has been around for quite a number of years. I’ve been following it with kind of one eye, I didn’t participate in it any point yet, but so give us an overview.

Adam Szweras: Well, now’s a great time.

James West:   Convince me, convince me!

Adam Szweras: Well, I mean, Nutritional High started out with a focus on Colorado, over the last really two years we’ve shifted most of our focus to California and Nevada and the western US, so we right now have facilities in California, northern California we have a

Flower One Holdings Inc (CNSX:FONE) (OTCMKTS:FLOOF) CEO Ken Villazor explains why the company is a perfect partner for brands that want access to the lucrative Nevada recreational cannabis market. Flower One is the largest cultivator in the state and Villazor expects the company’s 400,000 square foot greenhouse expansion to be fully canopied by Q2. Regulations require companies to be licensed in Nevada to sell in the state; consequently, Flower One’s value proposition is accelerated access to the Las Vegas market with the skill and capacity to ensure consistent product availability. The company has recently entered into partnerships with several cannabis, derivative, and ancillary companies such as a California brands Old Pal and Palms Premium. In addition, Flower One has also struck deals with Rapid Dose Technologies and Flight Concentrates. Together, these deals help achieve Flower One’s goal of covering multiple price verticals and wide-ranging SKUs.

Fraser Toms:  Hey, I’m joined in this segment with Ken Villazor, who’s the CEO of Flower One Holdings, which trades on the CSE under the symbol FONE. Ken, how’s it going?

Ken Villazor:      Very good, thanks for having me on.

Fraser Toms:  No problem, I’m glad to have you on! So let’s just do a quick little wrap up of what your company is all about and what you’ve got going on right now.

Ken Villazor: Sure. Well we had the opportunity to be back here in December to be with James, to give kind of everyone an introduction to the company. We’re a US-based cannabis company, we’re focused currently in the Nevada market. I think what makes us really unique

Heritage Cannabis Holdings Corp (CNSX:CANN) (OTCMKTS:HERTF) (FRA:2UE) CEO Clint Sharples explains why the company plans to act as a wholesaler  to other LPs in 2019. Heritage Cannabis will create white label products and provide wholesale stock to LPs through existing supply agreements. One such deal is the company’s arrangement with CannTrust Holdings Inc (TSE:TRST) (OTCMKTS:CNTTF) (FRA:C9S). This week, the company will harvest its first crop at its Fort Erie facility as part of its fulfillment of the supply contract with CannTrust. Sharples explains that as a newer company in the industry, Heritage Cannabis has limited resources; consequently, its 2019 strategy is designed to bring the greatest return on investment as quickly as possible. Heritage Cannabis has purchased 50,000 kilos of hemp feed stock for extraction and when it is processed, represents potential revenue of up to $40 million for Heritage Cannabis.

Clint Sharples:    2019 has brought a lot. I think the last time I was here, we were talking about we just completed our $7.5 million raise, we just closed two transactions, Cannacure based down in Fort Erie near Niagara Falls, and Pure Pharma, an attraction company based out of Kelowna, British Columbia.

Analyst Dmitry Zaytsev discusses the recent official Aphria Inc (TSE:APHA) (NYSE:APHA) (FRA:10E) takeover bid tabled by Green Growth Brands Ltd (CNSX:GGB) (OTCMKTS:GGBXF). Zaytsev has concerns about a number of aspects of the GGB offer. Zaytsev takes issue with GGB’s financing history, especially its agreement to pay All JS Greenspace LLC, which is helping to finance the capital raise to acquire Aphria, a commitment fee of $7.5 million if the deal does not go through. Most troubling for Zaytsev is the lack of transparency about the existing relationships between the two companies. He reveals that an Aphria subsidiary, GA Opportunities, is one of the largest shareholders in GGB, holding a 10 percent stake. GA Opportunities has partnered with All JS Greenspace LLC, a Schottenstein family holding that is financing the takeover bid, to create Schottenstein Aphria LLC. In addition, All J sold a pharma shell into Schottenstein Aphria LLC, which then used an RTO to launch Green Growth Brands. Zaytsev concludes the proposed deal will result in an automatic dilution for Aphria shareholders.

James West:   Dmitry Zaytsev is here. Dmitry, welcome back.

Dmitry Zaytsev:    Nice to see you, James.

James West:   Nice to see you, too. That’s so weird, they just walk you on the set while I’m talking to Margot. I can’t say hello, I can’t shake your hand –

Dmitry Zaytsev:    Tight schedule today.

James West:   Tight schedule, is that what it is? I guess, yes. So we were going to talk about you’ve been following very closely the potential merger I think we’re going to restrain the conversation to of the potential merger between Aphria and Green Growth Brands, acquisition of Aphria by Green Growth brands, in and all-spot deal, and so they’ve made an announcement today where Aphria is positioning itself as, at least management is advising its shareholders not to do anything, and Green Growth Brands has more or less made official its offer, which remains inadequate relative to what was said by Aphria management previously. What is your take on all of this?

Dmitry Zaytsev:    Yeah, so looking through all the filings, as you know, I’ve been following a lot of these

Gabriella’s Kitchen Inc (CNSX:GABY) (OTCMKTS:GABLF) is a cannabis wellness company operating in California. CEO Margot M. Micallef provides an update on the company’s product offerings as well as details about possible expansion. The company’s non-infused products are sold throughout the US and its THC-infused products are sold in California. The company is expanding its infused product line to include topicals and oils, such as infused cooking oils. Gabriella’s Kitchen is looking at possible Canadian expansion as well as product licensing agreements in additional states. Micallef anticipates the Farm Bill’s legalization of industrial hemp will be a significant catalyst for the company. The company’s non-infused products are currently sold in 3400 retail locations, and Gabriella’s Kitchen is working with its partners to create a similar retail footprint for its infused products.

Margot M. Micallef: We are a cannabis wellness company. We have a number of different brands: edibles, supplements, nutraceuticals, oils, etcetera, and we also have a line of uninfused products that are in the mainstream market.

So we started out life as a wellness company focusing on food, and we’re expanding into topicals, oils, nutraceuticals and tinctures, etcetera.

James West:   Well, fantastic. And do you sell your products mostly in the US market, or in Canada?

Margot M. Micallef: We sell mostly in the US market; we have a manufacturing facility and a distributing company, so we hold a manufacturing license and a distributing license in the State of California, and w

Plymouth Rock Technologies Inc (CNSX:PRT) (FRA:4XA) is a security screening technology developer. CEO Dana Wheeler provides an introduction to the company and states that Plymouth Rock’s goal is to develop radar and imaging processor systems to counteract active threat situations. The company is developing these technologies to respond to threats at greater distances, which potentially minimizes risk to innocent bystanders. Plymouth Rock has developed a shoe scanning technology for airports, which is designed to provide threat assessment and speed up security checks. Plymouth Rock’s technology can be both portable and fixed; as a result, it also has military applications and could be used for additional security in forward operating areas. Plymouth Rock has already raised $3 million and Wheeler anticipates needing to raise an additional $5 to $8 million for the company to produce its initial product offerings.

James West:   Welcome back. I’m joined now by CEO of Plymouth Rock Technologies, Dana Wheeler. Rock trades on the Canadian Securities Exchange under the symbol PRT. Dana, welcome.

Dana Wheeler: Thank you.

James West:   Dana, quick overview: what is Plymouth Rock Technologies all about?

Dana Wheeler: We actual

Amex Exploration Inc (CVE:AMX) (OTCMKTS:AMXEF) (FRA:MX0) CEO Victor Cantore shares details of the company’s drill program returns of 12.6 grams of gold over 4.6 metres. The project site contains both high grade and low grade gold and the 300 metre strike length contains visible gold as well. Amex Exploration Head Geologist Kelly Malcolm joins the discussion from the project site via Skype and walks viewers through a collection of rock samples from the Hole 22 intercept. Malcolm stresses the project’s consistent vein system and that all intercepts in the zone display visible gold. Cantore shares that Amex Exploration raised $500,000 in December and that financing round will pay for the entire project, which is projected to cost $160 per metre.

James West:   And I’m back here now with Victore Cantore, CEO of Amex Exploration, trading on the TSX Venture under the symbol AMX. Victor, welcome back.

Victore Cantore:   thank you, thank you for having us here. It’s really exciting.

James West:   It has been a long time that we have been fol

Newstrike Brands Ltd (CVE:HIP) (OTCMKTS:NWKRF) (FRA:0N8) CEO Jay Wilgar shares details of the company’s recreational successes and Niagara operations. Newstrike is one of just 7 LPs with product available in at least 7 provinces. Newstrike is currently completing the expansion of its 500,000 square foot Niagara production facility. When at full capacity in 2020, the location will produce 23,000 kilos annually. Newstrike is also focused on preparing for the roll out of vapes, edibles, and derivatives when those products are legalized in October. Wilgar admits that “nobody is killing it in Canada yet” in terms of recreational sales and notes the company wants to perfect its Canadian operations before following through on international opportunities.

James West:   Joining me now is Jay Wilgar, CEO of Newstrike Brands. Jay, Welcome back.

Jay Wilgar:   Thank you very much for having me back.

James West:   Jay, what’s 2019 looking like for Newstrike Brands?

Jay Wilgar:   Well, I think 2018 behind us was a very exciting year

James West:   The end of the year sure could have used a different ending.

Jay Wilgar:   Well, it could have, yeah, I mean, that wasn’t the most exciting part, but 2019 is going to be really big for us. We look at going int

Westleaf Inc (CVE:WL) is a vertically-integrated cannabis company operating in Western Canada. CEO Scott Hurd shares that Westleaf’s 115,000 square foot production facility is under construction in Battleford, Saskatchewan, which will complement its existing multi-purpose facility in Calgary. Hurd explains that the cornerstone of Westleaf’s strategy is its retail distribution. Hurd notes that because advertising and packaging regulations are so strict in Canada, LPs are currently selling undifferentiated product. In a market in which it’s difficult to create brand recognition, Westleaf believes the retail experience offers the best opportunity to control consumer experience and build brand awareness. Unfortunately, most retailers offer consumers undifferentiated experiences; in contrast, Westleaf’s retail franchise brand, Prairie Records, connects with customers through music while providing brand awareness through branded music merchandise like records. Westleaf is planning to open 30 retail locations across British Columbia, Alberta, and Saskatchewan, with 20 locations operational by the end of 2019.

James West:   Hey, we’re back in studio and right now with me I’ve got Scott Hurt and he’s the co-founder and CEO of Westleaf Cannabis trading on the TSX Venture under the symbol WL. Scott, welcome to our little show.

Scott Hurd:   Thanks for having me.

James West:   Scott, give us an overview: what is Westleaf all about?

Scott Hurd:   So Westleaf is one of the only, or one of the very few, vertically integrated cannabis companies.

James West:   That’s a bold statement.

Scott Hurd:   Well, what I mean by that is, we own or control assets across the entire cannabis value chain, so starting with production and cultivation – we have