Midas Letter

High Hampton Holdings Corp (CNSX:HC) (OTCMKTS:HHPHF) (FRA:0HCN) is a California-focused, vertically integrated branding play. CEO Gary Latham provides some personal background on his tech experience and journey to the cannabis space. He explains the significance of the company’s recent announcement that it has obtained six new licenses to operate in Cudahy, California. These licenses fall across the entire production spectrum, from cultivation to retail delivery. Crucially, the company was able to secure these licenses before an anticipated slowdown in California’s licensing process. High Hampton already holds similar licenses in other parts of the state through its various subsidiaries.

James West:        What is the business model of High Hampton?

Gary Latham:  Good. First I want to tell you I’d really like to use Calamity Jane – I hope you guys aren’t going to take that off the table.

James West:   [laughter] It’s all yours. That was my mistake, it’s all yours. Mojave Jane was a great name too, though.

Gary Latham:  I like it. [laughter] I like it. We get a lot of good response to Mojave Jane; I can’t wait to add the sub-brand of Calamity Jane to that, that’s going to be beautiful.

Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) (FRA:M5BQ) Co-founder and CEO Sean Dollinger describes the evolution of the company from a vape retailer to an e-commerce platform. Dollinger envisions Namaste as an online marketplace of cannabis technology and equipment, with the flexibility to add new products to the platform. Namaste is developing a cannabis-inspired, branded food product line with Australian celebrity chef Pete Evans. Dollinger notes that the revenues of traditional LPs are often through B2B relationships. As a B2C company, Namaste has a different relationship with customers and has the power to educate, influence, and share. One advantage of this unique customer relationship is that Namaste’s customer base, at 1.26 million, far exceeds any customer number put forth by the LPs.

James West:   I am here now with Sean Dollinger, CEO of Namaste Technologies Inc, trading on the CSE or the TSX Venture under the symbol N. Sean, welcome back and happy New Year.

Sean Dollinger: Happy New Year. Great seeing you.

James West:   You too. Sean your stock was under quite a bit of pressure in the last part of last year as were most of the stocks as was the broader market. You’ve come out of the end of last year and into the new year wit

Cannex Capital Holdings Inc (CNSX:CNNX) (OTCMKTS:CNXXF) Director and CEO Anthony Dutton talks about the company’s planned merger with 4 Front Holdings, LLC and becoming a multi-state operator in the increasingly crowded American cannabis space. According to Dutton, 4Front is the perfect match for Cannex, as 4Front’s retail and distribution proficiency complements Cannex’s core competencies of cultivation and processing. The expanded footprint of the combined entities will have a presence on both coasts and Dutton reveals the new company is interested in further expansion. Dutton indicates the new company’s expansion targets will include high population states where recreational cannabis is already legal or on its way to becoming legal. Dutton indicates the company plans to focus on creating branded products, which realize higher margins, as the cannabis sector evolves into a consumer packaged products industry.

James West:   Anthony Dutton, CEO of Cannex Capital is here with me. Anthony, welcome back.

Anthony Dutton:    Thank you very much. Happy New Year.

James West:   Happy New Year to you, too! We can still say that, I guess.

Anthony Dutton:    Yes, I think.

James West:   Anthony, Cannex has really undergone quite the revolution in the first weeks of 2019 here. Tell me about all these new developments.

Anthony Dutton:    Well, they really stem from our early December announcement of our business combination with 4Front. I believe you had Josh Rosen on your show around then to tal

Strainprint Technologies Ltd is a medical cannabis data analytics platform. CEO Andrew Muroff explains that the company has three products on the market: a patient-focused app, a community portal, and subscription analytics. Strainprint’s patient app allows individual consumers to track their consumption of cannabis and the efficacy of the products they are using. The goal is to find the optimal cannabis profile for each consumer and recommend cannabis products to suit their needs. Strainprint also offers products for growers, retailers, researchers, and clinics, such as its analytics platform. Strainprint’s analytics allow cannabis companies and medical professionals to optimize production and treatment, and conduct better market and medical research by tracking real-time cannabis consumption and efficacy data across a broad spectrum of categories.

James West:   Hey, Andrew Muroff is here. He’s the CEO of Strainprint, Andrew, welcome.

Andrew Muroff: Thank you for having me.

James West:   Andrew, tell me what Strainprint is.

Andrew Muroff: We are a DNA analytics company in the cannabis industry. We are one of the very companies that actually tracks data on patient use and patient outcomes, and we have the largest data set.

James West:   Cannabis and Big Data?

Andrew Muroff: Cannabis Big Data. So there’s a lot of data that’s on the supply side; we’re on the demand side, demand and use side.

James West:   I see, so if I am a cannabis retailer, I would want to license this data to give me an idea of where the trends are in the marketplace?

Andrew Muroff: So competitive intelligence, business intelligence if you’re on the medical side, treatment guidance. So it’s everything from strain efficacy, product formulation, you know, what am I missing in my product set that people are asking for, or how are my products comparing to other people’s products.

James West:   Oh, so you’re the guy who kind of finds out what the people are smoking.

Andrew Muroff: Yeah, and a lot of times it’s not smoking. A lot of times it’s other delivery mechanisms. There’s a lot of vaping.

James West:   Oh, okay, so tell me: what is the favoured method of delivery for Canada?

Andrew Muroff: Well, we can’t answer that question that broadly – we can, we shouldn’t answer it that that broadly, we should answer it by demographic, by gender, we can narrow it down to – we know what women vape more than men; men tend to smoke more than females.

James West:   Who smokes more, men or women?

Andrew Muroff: Men smoke more than women, typically, and typically it’s younger men, 50 below. 50 and above are vaping more, and a lot of people are taking their flower that they’re buying from legitimate sources and they’re making their own edibles.

James West:   Oh, is that right?

An

InMed Pharmaceuticals Inc (TSE:IN) (OTCMKTS:IMLFF) (FRA:MWG2) is a drug development company focused on cannabinoid-based medicine. President and CEO Eric A. Adams provides an overview of the company’s activities. InMed does not use the cannabis plant for its research and development program; instead, the company is biosynthesizing cannabinoids. InMed is developing a treatment for epidermolysis bullosa (EB) also known as the “butterfly child syndrome.” While its EB treatment has the potential to be a blockbuster drug, similar to Epidiolex in its impact, it is in the clinical trial phase and is still a few years away from market. In the interim, InMed hopes its biosynthesis process will be profitable soon and the company is looking to develop products for skin and eye conditions as well. InMed is in a position to fund this research, having raised $24 million in 2018.

James West:   Eric Adams joins me know. He’s the CEO and President of InMed Pharmaceuticals. Eric, how are you today?

Eric A. Adams: I’m doing great, thanks for having me.

James West:   You bet, Eric. We had an attempt at a conversation yesterday, but unfortunately, Skype didn’t cooperate with us, so

AltaCorp Capital Inc is Western Canada’s largest investment bank and is backed by ATB Financial. Managing Director and Senior Equity Research Analyst David M. Kideckel, PhD, MBA provides an overview of the company’s cannabis coverage. The firm covers medical, recreational, and pharmaceutical cannabis, which are all core AltaCorp research capabilities. AltaCorp recently launched coverage of GW Pharmaceuticals (NASDAQ:GWPH) (OTCMKTS:GWPRF) (FRA:GWZA) and is the only Canadian firm to cover the British cannabis company, famous for developing the epilepsy treatment Epidiolex. In the Canadian space, AltaCorp is interested in Auxly Cannabis Group Inc (OTCMKTS:CBWTF) (CVE:XLY) (FRA:3KF). Auxly’s East Coast footprint, white label products, and high-margin product segments all appeal to AltaCorp analysts.

James West:   Hey, David Kideckel is here with me now. He’s the Managing Director of research at AltaCorp Capital Inc. David, welcome.

David Kideckel:    Thanks for having me, James.

James West:   You bet. David, AltaCorp is Western Canada’s largest investment bank – it’s probably one of the best-kept secrets. Give me a quick overview of what AltaCorp is and who’s behind it.

David Kideckel:    Sure, so I think AltaCorp Capital, one of Bay Street’s best-kept secrets, full capital markets investment bank based here in Toronto with offices both in Calgary, Denver and Buenos Aires. We’re backed by Western Canada’s largest bank, called ATB Financial, which provides companies a full suite of banking products, whether that’d debt, lending, etcetera.

So on the one hand, we have the capital markets side, and then we’re also backed, our majority shareholder is ATB Financial.

James We

FTMIG Co-founder, Director, and Consultant Brandon Colwell provides cannabis market analysis and an update on the BridgeMark scandal. Colwell points out that Canopy Growth Corp’s (TSE:WEED) recent surge tracks an earlier move by small cap names Eve & Co (CVE:EVE) and Australis Capital Inc (CNSX:AUSA) and shares why that might indicate a pending reversal to the negative for Canopy. Colwell updates viewers on the growing BridgeMark scandal, which now involves 11 companies and 26 firms. He discusses the recent launch of Shoppers Drug Mart’s online medical cannabis sales and suggests that while Shoppers’ likely won’t be a leader in terms of dried flower sales, he expects the company to thrive in terms of the health and wellness cannabis market.

ut doesn’t this feel like every other time where we’re just doom and gloom, everybody thinks cannabis done, and then we get a bit of a run, it keeps going, and then all of a sudden, what the trigger is the articles that are coming out. The news articles. The Globe and Mail, Financial Post, they’re all saying, Oh, you know, we hit our bottom, everything’s rosy, everything’s fine! It feels like a bull trap. It feels like they’re just trying to get retailers to get the last little bit, all the institutions have already been loading up when everyone was screaming that everything was done. I think we see a little bit of a sell. I don’t see enough – I personally think we’re going to have a little bit of pullback.

Is it going to be all of this is going to be gone? I don’t think so. I want to see higher lows put in, I want to see some support levels, you know, kept, and another leg. I’m not sold yet.

James West:   Okay, now switching gears a bit, you guys were sort of big-time leading canaries on the whole BridgeMark Scandal, and what’s the status of that? It seems like there’s been a bit of, you know, it’s starting to get a little bit more feisty over there.

Brandon Colwell:   Yeah. So funny this is a name I hadn’t heard before. So I actually have that up as well, the article, and I don’t know if you just want to put that on one of the back screens or something like that, but a business newspaper in Vancouver came out with another article, and it’s stating that they’re pushing forward with this investigation. There’s a certain name here, you have to always remember, you know, some of these are allegations, other things are facts, but at the end of the day, innocent till proven guilty, putting it out there, that’s why we have a judicial system.

But a man named Aly Babu Mawji has now been allegedly put in the middle of this BridgeMark scheme, where in Germany, back in 2012, he was sentenced to 38 months in jail for a scheme that had 25.7 million Euros, a pump and dump scheme that he was convicted for. So now they’re saying that he was part of this, but what’s interesting here is, there’s now 26 firms ass

Midas Letter Lead Financial Writer Benjamin A. Smith shares his thoughts on Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) moving up the charts and describes how he was able to anticipate this rebound. He also addresses Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) (FRA:21P) picking up steam and what it means for the large cap names this year. Smith offers his thoughts on 2019 macro catalysts in the sector and the importance of the STATES Act in the US space. He discusses the impact of big names on Wall Street like Piper Jaffray covering the cannabis space and what it meant for Canopy’s recent surge. Smith interprets what Wall Street’s interest will mean for MSOs in the US cannabis sector.

James West:   Hello, Ben!

Ed Milewski:  Ben.

Benjamin A. Smith: Hey guys, hey James.

James West:   Hey, you got a new camera, by the looks of things – you’re in focus!

Benjamin A. Smith: Yeah, looks like the camera thing was indeed the issue here. So technical difficulties have been fixed.

James West:   Now Ben, just to jump right into it, here, you have been making some fair comments to say the least. I mean, in particular, I saw that there was a lot of appreciation for your sentiment that Canopy was going to start moving again. And boom, here we are, and it’s up $5.

Ed Milewski:  Ben told me that when you were away, we were just chatting, he says, keep your eye on Canopy; it’s getting loaded for a move, here.

James West:   Wow.

Ed Milewski:  And there you go, so you wait two weeks, so I know it’s a long time, but-

James West:   So Ben, let us ask you: what is the story, morning glory, behind the move on Canopy today?

Benjamin A. Smith: Well, you know, the big catalyst, of course, is the Piper Jaffray recommendation of Canopy stock; of course, that went a long way. But some of these recommendations from

Copperbank Resource Corp (CNSX:CBK) (OTCMKTS:CPPKF) (FRA:9CP) Executive Chairman Gianni Kovacevic tells the story of energy and the market place, from the first discovery of oil in Texas at Spindletop in 1901, to the surge in Chinese oil usage in the 2000s. Kovacevic points out that oil and copper have typically had a 90 percent correlation but suggests that with copper’s falling grades and a lack of new discoveries, the metal will separate from oil. He predicts copper will need to get to the $5-$6 range as a result of the copper deficit and notes that 45 percent of the world’s primary copper comes from Peru and Chile. In anticipation of this inevitable surge, Copperbank’s portfolio is heavily invested in the copper market.

James West:   My guest now is Gianni Kovacevic, author of My Electrician Drives a Porsche and he’s the executive chairman of Copperbank. Gianni, welcome back.

Gianni Kovacevic:  So nice to be back here. We were very busy today up at the Empire Club, the economic outlook for 2019.

James West:   Wasn’t that great? I thought it was fantastic, because Pierre was like completely bullish saying

CB1 Capital Management CIO Todd Harrison shares his interpretation of the market’s recent bullish turn. He points to Fed chair Jerome Powell walking back earlier comments on interest rate rises as a potential macro catalyst but also cautions the markets, including the cannabis space, need to work through the technical damage done in Q4 2018. Despite recent action, Harrison believes the current rebound is transitory. Harrison is more optimistic about the cannabis space and he suggests Wall Street’s increased interest in the cannabis sector is a precursor to greater institutional participation in the space, which will act as a catalyst for the industry. CB1 Capital is a long-term investor in the cannabis space and is particularly interested in efficacy-driven solutions developed by cannabis biotech companies. Harrison reminds investors to pay attention to the consumer side of the cannabis equation, as he expects the Farm Bill’s legalization of industrial hemp to have massive applications for wellness products.

James West:   Todd, how are you doing today?

Todd Harrison: Hey, how are you guys?

James West:   Happy New Year.

Ed Milewski:  Hey, Todd.

Todd Harrison: Happy New Year, we spoke last week. We had a conversation [laughter]

James West:   Well, that’s because I’m doing too much CB1 and CB2. Apparently, you know that they’ve found, they’re surmising, they’re pontificating in the research clinical sector that short-term memory loss was actually part of the survival strategy of people who consumed cannabis, it was sort of like a by-product of the symbiotic relationship between plants and humans. Short term memory loss, because if you lose your short-term memory, you’re relaxed and you have no anxiety and you sleep well, because you can’t remember what you were worried about by the time you go to bed.

Ed Milewski:  I think that’s true. I’m tired and I want to go to sleep.

James West:   I’m tired, and I want to go to bed. Uh, anyways, Todd, so since we chatted way back there last week, the market has gone into a decisively positive and, you know, bullish phase. Do you see this lasting, and is this something, if you were to point to the macro-catalysts that would be responsible for this sudden effusiveness in the first quarter of 2019, what would it be?

Todd Harrison: I think certainly if you’re talking about the macro tape I think Powell walking back some of his quantity of tightening language with the balance sheet certainly helps sentiment. It got pretty panicky the last week of the year, but now we’re back up; we talked about this, a lot of resistance levels here across the US indices, the sub-indices, and across the world. It doesn’t mean we can’t go higher, I just think there’s a fair amount of technical damage that was done in the fourth quarter that we need to work through.

But yeah, in the cannabis space, I think a lot of the tax loss selling we talked about