Midas Letter

Neptune Wellness Solutions Inc (NASDAQ:NEPT) (TSE:NEPT) (FRA:NTU) CEO Jim Hamilton discusses the company’s 2019 plans. Neptune received its Health Canada licenses in early January and is pushing ahead with commercialization. He notes that in developed cannabis markets, approximately 70 percent of products are extracts and this robust extraction market suits Neptune’s core competencies perfectly. Neptune continues to be a significant player in the health and wellness space and this makes it well-suited for the cannabis sector, which increasingly emphasizes the importance of wellness products. Hamilton discusses the size of the CBD market in the US and notes that Neptune’s lengthy experience in food production and extraction is a perfect fit for the emerging edibles market. Neptune has a multi-year supply agreement with Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) for extraction and product development.

James West:   and now I’m here with CEO of Neptune Wellness, Jim welcome back.

Jim Hamilton: Jim, the Jims are together once again, right?

VitalHub Corp (CVE:VHI) (FRA:6OV) provides EHR and mobile healthcare solutions. CEO Dan Matlow updates viewers on the integration and commercialization of recent acquisitions H.I. Next Inc and B Sharp Technologies Inc. Matlow shares details of a new deal between VitalHub and the Province of Nova Scotia. VitalHub is helping Nova Scotia transform its social services by creating an integrated platform for the province. The initial contract is for 5 years with the possibility to extend for an addition five years. The base transaction will provide $9 million in revenue for VitalHub with the opportunity to expand service offerings and increase funds. VitalHub is looking to secure similar deals with other regional and provincial governments. The company’s 2019 plans include further acquisitions and possible European expansion.

James West:   I’m here now with Dan Matlow, CEO of VitalHub, trading on the TSX Venture under VHI. Dan, welcome back.

Dan Matlow:   Thank you, thanks for having us.

James West:   Yeah, it’s been a while since we’ve chatted. Tell me what has developed for VitalHub in the last little while since we talked.

Dan Matlow:   Oh God, I think we’re getting close to nine months to a year; I can’t remember exactly. We’ve made a great amount of progress since the beginning. You know, we had a business plan that was setting out to do some M&A in the h

Analyst Dmitry Zaytsev examines Aphria Inc’s (TSE:APHA) (NYSE:APHA) (FRA:10E) latest financials and the company’s announcement that CEO Vic Neufeld and Co-founder Cole Cacciavillani are stepping down. Zaytsev is surprised Aphria’s stocked rallied on relatively disappointing financial numbers and believes that the company’s stock bump likely reflected investors’ response to the management change. While Aphria earned a profit of 22 cents per share, Zaytsev cautions that a considerable amount of that profit is due to Aphria’s investments and related activities, not its recreational cannabis revenue. Zaytsev is particularly concerned by the increase in the company’s debt. Zaytsev shares his current Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) investment strategy. He thinks Canopy is one of a handful of Canadian names investors should keep because it has significant amounts of cash, won’t have to dilute stock, and will be able to deploy capital in the US.

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

Dmitry Zaytsev:    Happy to be here as always, James.

James West:   Tell me what you’re buying, what you’re liking, what you’re selling, what you’re hating. [laughter]

Dmitry Zaytsev:    We’re accelerating this process, this whole interview thing. I mean, I bought a bunch of Canopy around a week and a half ago but nowhere near the kind of allocation I wanted for a longer term position, so many only 20 to 30 percent of what I was looking for before this move started going. So very nice move right now; I’ve sort of scaled out a lot of that. Why? We just rallied way too far, too fast, in my opinion. And for the diversity’s sake, I bought a little bit of puts.

James West:   Wow. Okay, so that’s hedging your bets.

Dmitry Zaytsev:    Well, I’ve scaled out of those positions that I had earlier. I a

WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) (FRA:4WE) CEO Keith Merker shares details of the company’s recent joint venture with Pita Pit Canada, a successful quick-service restaurant chain, to launch retail service provider Pioneer Cannabis Corp. Merker is enthusiastic about the deal because it combines WeedMD’s extensive cannabis knowledge with Pita Pit’s retailing, franchising, and distribution experience. Merker suggests that cannabis retail and franchising will be more difficult than typical retail enterprises and as a result, partnering with an experience food and beverage company gives WeedMD a strategic advantage. Merker also discusses the company’s edibles strategy in anticipation of Q4 2019 legalization. He highlights the company’s existing joint venture with Phivida Holdings Inc (CNSX:VIDA) to create infused beverages at WeedMD’s Strathroy facility.

James West:   Guess who’s here? It’s Keith Merker, CEO of WeedMD. Keith, welcome back.

Keith Merker: Thanks for having me.

James West:   Keith, it’s 2019. New year, new set of regulations in the United States, rules changing all across Canada. We’re going to have beer. We’re going to have drinks. we’re going to have physical stores in Ontario

Micron Waste Technologies (CNSX:MWM) (OTCMKTS:MICWF) CEO Alfred Wong provides viewers with an update on Micron Waste’s progress. The company’s Cannavore, a cannabis waste digester, is undergoing final testing at Aurora Cannabis Inc’s (TSE:ACB) (NYSE:ACB) (FRA:21P) Aurora Mountain facility. Once completed, the Cannavore will roll out across Aurora’s production facilities. Micron Waste received a US patent for its waste treatment process. Importantly, the patent covers Micron Waste’s water treatment procedures. Micron Waste’s technology reduces the cost-per-gram for cannabis producers because the Cannavore reduces labour and landfill costs. Wong believes the Cannavore is perfect for companies like Aurora, which have clear corporate and environmental responsibility goals.

James West: Right now, I’m joined by Alfred Wong. CEO of Micron Waste Technologies, trading on the CSE under the symbol MWM. Alfred, welcome back.

Alfred Wong: It’s nice to be back.

James West: You bet. Alfred last time we spoke, the Micron Waste machine that digests canna

The Mint Corporation (CVE:MIT) (OTCMKTS:MITJF) Executive Director Vikas Ranjan provides an introduction to the company and explains how Mint provides financial services to the unbanked. Mint is a fintech platform that provides payroll and banking services to the underbanked in the United Arab Emirates. With 5 million unbanked workers in Dubai alone, Mint solves an important problem for companies that are prohibited by law from paying employees in cash. Mint provides a high level of banking services through its payroll card and mobile app. Ranjan notes that once the company secures a customer through its payroll operations, Mint can offer them different attractions and value added services such as bill payment and money transfers through its mobile app. Mint recently announced it had gained another 100,000 customers on its platform to bring its total number to over 600,000 customers. With more than 2 billion people who are unbanked globally, Mint envisions its platform as a plug-and-play technology suitable for expansion to other regions.

Ed Milewski:  Hello, everyone. Welcome to Midas Letter Live. I’m Ed Milewski. Today we have with us Vikas Ranjan. Vikas has done a number of things in the financial world; he’s a founder of Gravitas Financial, and Gravitas Financial is the largest shareholder of a company called Mint Corporation.

Vikas Ranjan: That’s right.

Ed Milewski:  Now when I think of mint, I think of money-printing.

Vikas Ranjan: [laughter]

Ed Milewski:  And if you’ve got a money-printing machine, I want to know about it. No, all kidding aside, G

Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) (FRA:21P) CCO Cam Battley shares details of the company’s just announced US $300 million convertible debenture. Battley reveals that the notes mature in 2024 and highlights that if the option is exercised in full, the total amount of the deal increases to US $345 million. Battley realizes the announcement initially weighed on Aurora’s stock, suggesting investors feared further dilution of Aurora’s shares. Battley confirms that the notes can be settled in cash or stock and at Aurora’s discretion. He indicates the company intends to settle in cash, without additional dilution. Battley is excited about the number of institutional shareholders who took part in the convertible debenture. He believes bringing more institutional investors into the space will reduce volatility in Aurora’s stock specifically and the cannabis sector more broadly. This deal allows Aurora to bolster its coffers and maintain flexibility as the industry evolves and additional economic opportunities develop.

James West:   Welcome back, everybody! As promised, in the house today, Cam Battley, CCO of Aurora Cannabis. Cam, welcome back.

Cam Battley:  Nice to see you.

James West:   Cam, the hot topic of

Wayland Group (CNSX:WAYL) (FRA:75M) (OTCMKTS:MRRCF) CEO Ben Ward explains the company’s LOI with ICC International Cannabis Corp (CNSX:WRLD.U). Under the terms of the agreement, Wayland will sell 49.9 percent of its international assets (valued at USD $258 million), to International Cannabis Corp and will receive 300 million shares in ICC. Ward explains that the deal completes Wayland’s vertical integration strategy and gives the company broad distribution. As part of the agreement, Wayland will supply Cosmos Holdings with 10,000 kilograms of EU GMP-certified product per year. Crucially, Wayland now has access to over 27,000 pharmacies in Western Europe, which reach an estimated 390 million people. By pairing assets with ICC, Wayland has achieved a distribution footprint other LPs have achieved through outright purchase, but at a fraction of the cost.

James West:   Ben, that was quite the awesome press release you guys put out January 15th where you have sold 49.9 percent of your international portfolio of assets to International Cannabis Corp., valuating the entire European at US $258 million. What is the compelling reason for selling half of your business to another company?

Canaccord Genuity Group Inc (TSE:CF) (OTCMKTS:CLORF) Analyst Matt Bottomley warns that this year cannabis companies are going to have to justify increasingly lofty valuations. While Bottomley believes that all cannabis companies need to back fill to match valuations, he indicates that the domestic space is much more appealing in the US than in Canada. He suggests that US MSOs are going to show positive EBITDA before Canadian LPs. On the other hand, Canadian LPs have international opportunities that their American counterparts cannot currently match. Bottomley indicates that Canadian LPs will need to see meaningful revenue from international markets to justify valuations. However, Bottomley cautions that the global cannabis rollout is still in its infancy and estimates that it will take a decade for the international market to mature.

James West:   Matt Bottomley is here. He’s a research analyst with Canaccord Genuity. Matt, welcome back.

Matt Bottomley:    Good to see you again.

James West:   You too. Matt, it’s 2019, different crop of cannabis stories out there though some are the same. What is the main thrust of your interest in 2019 in the cannabis space?

Matt Bottomley:    Well, a lot of the companies that

OrganiGram Holdings Inc (CVE:OGI) (OTCMKTS:OGRMF) (FRA:0OG) CEO Greg Engel is pleased by the company’s recent milestones. OrganiGram is now a national player in the recreational space, supplying every province except Quebec; in addition, the company also recently produced its 1,000,000th pre-roll. While the company plans to release its first rec sales numbers in mid-February, Engel reveals OrganiGram’s brand recognition has soared on the strength of its consistent supply and the quality of its products, such as Rio Bravo, from its recreational Edison line. The company’s approach to legalization focused on guaranteeing a select number of SKUs were consistently available to the rec market while ensuring medical patients had a full range of products available. OrganiGram is currently building out its European operations, with a focus on Germany and Serbia. Engel believes Europe represents a considerable opportunity, especially in terms of CBD products. He provides an update on OrganiGram’s partnership with Hyasynth Biologicals, a yeast-based synthetic cannabinoid producer.

James West:   And now I’m joined by Greg Engel, CEO of Organigram Holdings. Greg, welcome back!

Greg Engel:   Hey, great to be on again, James.

James West:   Yeah, it’s been a while since we’ve seen you. I was just commenting to Ed that on December 20th he coul