Midas Letter

Heritage Cannabis Holdings Corp (CNSX:CANN) (OTCMKTS:HERTF) (FRA:2UE) CEO Clint Sharples shares details of the company’s 2019 plans. Recently, Heritage finalized a deal to acquire the CannaCure Corporation and completed the acquisition of Purefarma Solutions, appointing Purefarma CEO Graeme Staley to the Heritage Cannabis board of directors. Heritage Cannabis is waiting for its Health Canada licenses, but anticipates beginning extraction in February, with products ready for sale by the end of Q1 2019. Other 2019 targets include completing the company’s greenhouse build in British Columbia and establishing extraction facilities in Ontario and British Columbia. Heritage Cannabis intends to be primarily a white label provider to meet demand during the current supply shortage.

James West:   Hey Clint, welcome back.

Clint Sharples:    Hey, thank you for having me again.

James West:   Clint, Heritage continues to execute on its business plan, and why don’t we start with an overview of some of the recent events that you’ve announced?

Clint Sharples:    Sure. So when we first started coming and talking to you, we were talking about the existence of one subsidiary, one

Aleafia Health Inc (CVE:ALEF) (OTCMKTS:ALEAF) (FRA:ARAH) grabbed headlines by announcing the acquisition Emblem Corp (CVE:EMC) (OTCMKTS:EMMBF) (FRA:E0M). The all-share transaction is valued at approximately $173 million and will significantly alter the medical cannabis landscape in Canada. Emblem CEO Nick Dean explains that the company’s investors should be excited about the deal’s 0.83 share ratio, which means Emblem shareholders will receive 41% of a stronger combined entity. Aleafia CEO Geoff Benic stresses the compatibility of the companies, emphasizing that Emblem’s 30,000 square foot extraction facility compliments Aleafia’s outdoor grow plans. Benic also notes that Emblem’s GrowWise Health clinics bring the combined entity’s total clinics to 40 while Emblem has the capability to supply product to Aleafia’s patients.  As a result, the combined company’s potential for patient growth and retention, as well as product innovation in the medical space, is significant.

James West:   Why here’s a pleasant surprise: we’ve got both Geoff Benic, CEO of Aleafia, and Nick Dean, CEO of Emblem, in the house to discus the recent combination of their two companies in an all-stock transaction. Gentlemen, welcome.

Geoffrey Benic:    Thank you.

420Investor and New Cannabis Ventures Founder Alan Brochstein, CFA shares his views on why new cannabis issuers have performed dismally this fall. Brochstein emphasizes that the broader market has played a role in this trend, as the downturn since October has weighed heavily on the space. He also highlights that since 2016, significant amounts of capital have been raised in the space and individuals have more options when it comes to cannabis investing. While it is easy for investors to cut their losses right now, Brochstein cautions that they would be wise to pay attention to the immense revenues generated by new issuers, despite stock volatility. Brochstein is happy to see US companies like Harvest Health & Recreation Inc (CNSX:HARV) (OTCMKTS:HTHHF) and Canadian counterparts such as Organigram Holdings Inc (CVE:OGI) (OTCMKTS:OGRMF) (FRA:0OG) providing detailed guidance. Brochstein notes that US investors now have a lot more options to invest in the United States and he believes this will be a big story to watch in 2019.

James West:   Hey, Alan, how are you going?

Alan Brochstein:   Hey, great, James, good to see you again.

James West:   You as well, you as well. So, Alan, you know the market’s been kind of in a tough spot lately, and I guess the best way to describe it is all the new issuers that have been coming to market have been absolutely dismal performers, and I’m curious as to your perspective on why that is.

Alan Brochstein:   Yeah, so, you know, I’m not able to confirm this precisely, but I’ve heard from another people it kind of started with the Curaleaf deal. And apparently, they had a big, you know, they were out there representing that the book was even bigger than it was, and people upped their orders, and then they ended up getting full allocations on the upsized orders. And so it left a bad taste in people’s mouth, apparently. I’ve heard that from a number of sources.

So the reality is, we’ve seen, in very weak overa

The Supreme Cannabis Company Inc (CVE:FIRE) (OTCMKTS:SPRWF) (FRA:53S1) President John Fowler shares his excitement about the company’s recently announced partnership with Khalifa Kush Enterprises (KKE), the cannabis brand of hip hop star Wiz Khalifa. Under the terms of the deal, Supreme will be the exclusive producer of KKE’s branded products in Canada and in international markets (excluding the United States). This includes developing a Health Canada compliant strain based on the premium Khalifa Kush strain. Fowler believes pricing in the cannabis space is similar to the wine industry, where consumers frequently pay more for premium products Fowler expects cannabis consumers to be equally willing to by premium products at similar price points to the wine industry and this is one of the reasons for the Supreme-Khalifa Kush Enterprises partnership. Fowler addresses the company’s uplist to TSX and a major US listing and discusses several changes the company needs to make to meet US uplisting requirements.

Brandon Colwell:   It’s John Fowler, president of the Supreme Cannabis Company. How are you doing today?

John Fowler:  I’m very good. Thanks for having me.

Brandon Colwell:   So, what have you guys been up to recently?

Khiron Life Sciences Corp (CVE:KHRN) (OTCMKTS:KHRNF) (FRA:4KH) President Chris Naprawa believes Mexico’s rapid move to legalize cannabis is the biggest news to hit the sector to date. With a population of 130 million people, the Mexican market is significantly larger than its Canadian counterpart but lacks the competition. That’s good news for Khiron, as the Colombia-based company already has a considerable footprint in Latin America. In November, Khiron extended its partnership with Farmalisto, the region’s leading drug store, into Mexico to distribute Khiron’s wellness brand Kuida. Khiron has brand exposure to 200 million people in Latin America and the company recently made announcements that several of its SKUs are now available in Chile and Peru.

James West:   Chris, welcome back!

Chris Naprawa: Thank you, James.

James West:   Things are really starting to pop for Khiron across Latin America, and I’m pleased to note that I had a conversation with Vicente Fox a couple of weeks ago, and Mexico is really coming on strong.

Chris Naprawa: It sure is.

James West:   And one of the things I want to focus on here, because it seems to m

CannTrust Holdings Inc (TSE:TRST) (OTCMKTS:CNTTF) (FRA:C9S) CEO Peter Aceto discusses the company’s Q3 revenues and addresses concerns about CannTrust’s expansion plans in Pelham, Ontario. He states that Phase 2 of the company’s expansion, which will allow CannTrust to produce 50,000 kilograms of cannabis annually, should be completed by the end of January. Unfortunately, Pelham has placed a temporary moratorium on cannabis permits. As a result, CannTrust’s Phase 3 expansion, which would push production to 100,000 kilograms of cannabis annually, is currently halted because it requires the approval of additional permits. However, Aceto stresses the company is having productive conversations with town representatives and expects to complete Phase 3 construction by the end of 2019. CannTrust is still planning to uplist to a major US exchange and is taking steps to move to the NYSE.

James West:   Peter, welcome.

Peter Aceto:  Thank you. It’s an honour to be here.

James West:   Yeah, you bet. So Peter, this is your first time on as the new CEO of CannTrust, so I want to start with an overview of the company’s financial performance in the last reported period, quarter ended September 30th, wherein it was revealed that CannTrust is actually a pro

Pure Global Cannabis Inc (CVE:PURE) (OTCMKTS:PRCNF) (FRA:1QS) CEO Malay Panchal envisions Pure Global as a cannabis 3.0 company that focuses on developing and manufacturing medical and wellness products. Unlike many leaders in the industry, Panchal, a pharmacist by trade, brings significant patient experience and pharmaceutical connections to the company. Panchal believes the consumer cannabis market is primarily comprised of wellness products; as a result, Pure Global is developing nutraceutical and bioceutical products to meet this demand. Pure Global has developed its own vertical farming system, designed to significantly increase yields, for its Brampton facility. While the company is in the midst of obtaining its sales license from Health Canada, Pure Global is also looking for partnerships and affiliations with medical groups and clinic networks.

James West:   My guest is Malay Pachal – sorry, Panchal. My guest this segment is Malay Panchal, he’s the CEO of Pure Global Cannabis Inc., trading on the TSX Venture under the symbol PURE. Malay, thank you, and welcome to the show.

Malay Panchal: Thank you, James, for having me.

James West:   You bet. So Malay, Pure Global is a newly arrived LP to the whole mix. Tell me

48North Cannabis Corp (CVE:NRTH) (OTCMKTS:NCNNF) CEO Alison Gordon is thrilled with the company’s two new deals with industry giant Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1). The first of the two deals is a financing agreement stipulating that Canopy Growth will purchase stock in 48North for a total strategic investment of $3 million in the company. In addition, the partners also concluded a supply agreement; as a result, 48North will be a wholesale supplier of premium, dried flower product to Canopy Growth. The supply arrangement also includes a best-efforts commitment from Canopy Growth to carry 48North Cannabis products in Tokyo Smoke and Tweed stores. Gordon reveals that the company’s stock has risen approximately 35 percent since the Canopy deals were announced. This good news comes on the heels of the company closing a $10 million private placement and the release of its Q1 2019 financials, which illustrated 48North is EBITDA positive.

James West:   My next guest is obviously the fabulous Alison Gordon. She’s the CEO of 48North Cannabis Corp., trading on the TSX Venture under the symbol NRTH. Welcome back, Alison.

Alison Gordon: Thank you, James.

Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) CEO Bruce Linton shares details of the company’s 2019 strategy. Linton discusses the significance of the infused beverage market and the clear advantage Canopy Growth has over its competitors as it draws on Constellation’s formidable beverage experience. Linton explains why the company’s deal with established German manufacturer Storz & Bickel is important for Canopy’s product development. He stresses the importance of Canopy showing profitability in the Canadian market within 18 months and exporting that model to other markets. He notes that players in the cannabis space have to be forward-looking and reveals that Canopy has already anticipated what will happen when derivative products are legalized in Q4 2019. Canopy Growth Corp has been busy in December, inking deals with flower cultivators and extractors like 48North Cannabis Corp (CVE:NRTH) (OTCMKTS:NCNNF), Valens GroWorks Corp (CNSX:VGW) (OTCMKTS:MYMSF) (FRA:7LV), and MediPharm Labs Corp (CVE:LABS) (OTCMKTS:MLCPF).

James West:   Bruce, welcome back.

Bruce Linton: Thanks James, good to be back.

Neptune Wellness Solutions Inc (NASDAQ:NEPT) (TSE:NEPT) (FRA:NRU) CEO Jim Hamilton explains how the wellness company behind Omega 3 Krill Oil’s popularity is making the switch to the cannabis industry. Neptune Wellness believes cannabis presents a more lucrative return on investment for shareholders and the company’s expertise in wellness, extraction, branding, and distribution meant it was a perfect fight for the space. Neptune Wellness is a B2B company that has an established and profitable nutrition business as it moves its cannabis sites to readiness. The company’s expertise at creating formulated products backed by user experiences demonstrated through data makes Neptune Wellness an excellent partner for cannabis companies with existing cannabis and consumer packaged goods expertise.

James West:   My guest now is Jim Hamilton, CEO of Neptune Wellness Solutions, trading on the TSX under the symbol NEPT. Jim, welcome.

Jim Hamilton: It’s a great pleasure to be here, Jim. It’s always a great pleasure to meet another Jim, actually.

James West:   Absolutely, Jim. This could get repetitive.

Jim Hamilton: Well I have to tell you, Jim, I’m very exc