Midas Letter

Sokoman Iron Corp (CVE:SIC) (OTCMKTS:SICNF) (FRA:3PJ) CEO Tim Froude provides an update on the company’s Phase 2 summer drilling program at its flagship Moosehead project site. Sokoman is striving to finish its proposed 10,000 metre drilling program before the end of the year and has completed 25 holes and taken over 1000 samples. The company is currently waiting for sample results to return, but Froude hopes to have additional updates on Phase 2 results before Christmas. Phase 3 drilling at the site will commence in January, as the infrastructure at the Moosehead site allows for year round drilling. While Sokoman’s stock is liquid, it has been impacted by the general malaise afflicting the mining industry despite the value of the Moosehead project.

Brandon Colwell:   And we’re joining today, for a second or third time now…

Tim Froude:   Third time, actually.

Brandon Colwell:   Third time, Tim Froude, CEO of Sokoman. Welcome.

Tim Froude:   Thank you for having me, Brandon.

B.S: Absolutely. So a lot has been going on over the summer; obviously that’s the main drilling time. Do you have an update for shareholders?

Tim Froude:   Yeah, well, we’re right in the midst of Phase 2. Obviously we had a very successful Phase 1 with a significant discovery hol

Heritage Cannabis Holdings Corp (CNSX:CANN) (OTCMKTS:HERTF) (FRA:2UE) President Clint Sharples believes the company is beginning to look like an industry leader. In October, the company completed a definitive agreement to acquire CannaCure Corporation. In addition, Heritage Cannabis has three subsidiaries with licenses for production or extraction. Heritage has purchased 10,000 kilos of CBD concentrate, which it plans to sell to international markets at $40 per gram of CBD, potentially creating $40 million in revenue. Heritage is looking to partner with an EU GMP certified company and is also working with Canadian micro-cultivators to produce Heritage’s feed stock. Heritage is on target for continual revenue growth and 2019 revenue projections show the company being EBITDA-positive by the end of next year.

James West:   My guest this segment is returning for, I believe, the third time: Clint Sharples, President, Chairman and Director of Heritage Cannabis Holdings Corp., trading on the CSE under the symbol CANN. Clint, welcome back.

Clint Sharples:    Thanks. Great to be here again.

James West:   Yeah, so Clint, this company, Heritage Cannabis, is startin

Faircourt Asset Management and Ninepoint Alternative Health Fund CEO Charles Taerk addresses the global market sell-off in October and recent financial statement releases by leading cannabis companies. In particular, Taerk highlights the financial statements released by Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) and Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) (FRA:21P) as particularly disappointing to the broader markets. Taerk points to the excellent numbers released by CannTrust Holdings Inc (TSE:TRST) (OTCMKTS:CNTTF) (FRA:C9S) and notes it was the only cannabis company to generate positive EBITDA in the quarter. He indicates that most retail investors aren’t paying attention to the details when it comes to the cannabis space and that’s an advantage for the Ninepoint UIT Alternative Health Fund, which is up 27 percent year-to-date. Taerk anticipated the sector downturn and the UIT took profits in anticipation of the market slowdown. The fund is reducing its exposure to Canadian LPs in favour of US companies, believing American companies to be undervalued.

James West: Hey, welcome back. My guest in this segment, returning for the, I don’t know, 10th time, is Charles Taerk, President and CEO of the Nine Point UIT Alternative Health Fund. Charles, welcome back.

Charles Taerk: Thanks very much for having me.

The Chart Guys stock trader Charting Man Dan McDermitt provides technical analysis and insight on the correlation between cannabis stock prices and the S&P 500. Charting Man Dan states that that S&P is a critical gauge of the overall market, which is why cannabis stocks have tracked so closely. McDermitt also reveals that cannabis stocks have lacked volume lately and when that occurs algorithms takeover, which are correlated to the S&P especially for companies listed on the NYSE and NASDAQ. McDermitt’s market outlook heading into American Thanksgiving is not positive and recommends defensive positions for retail investors. He endorses locking in profits and suggests using stop losses to prevent dramatic overnight drops. Looking ahead, McDermitt states investors will find out in the coming days whether the market is going to breach its February lows.  He walks viewers through the technical analysis of two charts: Canopy Growth Corp (NYSE:CGC) (TSE:WEED) (FRA:11L1), which follows the S&P closely and ancillary cannabis company Innovative Industrial Properties Inc (NYSE:IIPR), which has bucked market trends.

James West:   My next guest is Charting Man Dan McDermott, who’s one of the principals behind TheChartGuys.com. Dan, welcome back.

Dan McDermitt: Glad to be back, James. Thanks for having me.

James West:   Hey, Dan, your input is always highly valued here, and your insight into what is moving the market from a technical basis is peerless in my regard. I’d like to talk to you about some of the events we’ve seen. For example, we’ve sort of noticed a correlation in the last 10 days or so that where the cannabis sector has become more dependent on what’s happening with the S&P, and I’ve wondering if you’ve observed that, and what sort of is your take on that.

Dan McDermitt: Absolutely, I would certainly agree. The S&P 500 is very critical to the overall gauge of the market sentiment, and it’s going to be reflected in most markets, especially one that’s so high risk and a little bit less developed, like the MJ space currently is.

In

CB1 Capital Management CIO Todd Harrison discusses the share structure of US multi-state cannabis operators that have recently listed on Canadian exchanges. Harrison admits there is “lots of hair” on these companies but reveals CB1 Capital is still investing in recently-listed US entities regardless of these issues. GW Pharmaceuticals plc (NASDAQ:GWPH) (OTCMKTS:GWPRF) (FRA:GWZA), makers of the epilepsy medication Epidiolex, is CB1 Capital’s favourite play and illustrates the fund’s preference for long-term investment in US cannabis biotech and life sciences companies. Harrison believes the market is beginning to understand the potential of the consumer side of the cannabis space but notes investors are still lagging behind in terms of recognizing the significance of efficacy-driven medical solutions. Harrison cautions against investing in pure cultivators, as they have the worst margins, and stand to lose the most as each new country and entire continents come online.

James West:   Hey, welcome back. Joining me again is Todd Harrison, the founder and – sorry, founding partner and CIO of CB1 Capital Management. Todd, thanks for joining me again today.

Todd Harrison: Thank you.

James West:   Todd, I wanted to run through a couple things with you and get your thoughts on, we’ll start with this idea that we have a lot of these companies in the US coming to the Canadian market with very large market caps – you know, we’ll use Acreage Holdings as an example – came to market with a $2.4 billion market cap, call it, after doing a $25 per share IPO, and the companies are demonstrating this propensity to come to market with a super-voting structure that precludes the ability of retail shareholders from participating meaningfully on a voting basis in the direction of the company. I’m curious as to how does that affect how you feel about these companies?

Todd Harrison: Well, I mean, listen, it’s not optimal, but it’s not also the first time we’ve seen this. Facebook, I believe, has a similar structure, and we’ve seen others. Certainly not the best case scenario if you’re looking at building a relationship with one of your investors and one of meritocracy that you’re going to get held accountable for, but I think what you’re seeing with a lot of these US multi-listed operators that are coming to Canada is, you’re seeing a lot of hair on these things, right? There’s a lot of wines, there’s a lot of fluff in there. Canadian elbow grease, we’ll call it, for

Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) (FRA:M5BQ) CEO Sean Dollinger explains why the LP has bypassed cultivation in favour of focusing on e-commerce. According to Dollinger, as an online retailer and distributor Namaste will be “the Airbnb of cannabis” because it will sell products without actually carrying inventory. Dollinger emphasizes that medical cannabis remains crucial to the Canadian market because it allows Canadian patients to access products across provincial boundaries, which is prohibited for recreational users. The company is working with Cannabis Compliance to use Namaste’s e-commerce network to distribute the products of micro-cultivators. Namaste uses its existing infrastructure to adapt to changes in the cannabis landscape. The company is the largest B2C vape company in the world and will start using those distribution channels in the UK to sell medical cannabis.

James West:           Welcome back! My guest in this segment, returning for the, I don’t know, 10th time, maybe? Sean Dollinger is the CEO of Namaste Holdings Inc., trading under the TSX Venture under the symbol N. One letter: N. Sean, welcome back.

Sean Dollinger:    Hey, thanks for having us on.

James West:   Sean, you are one of the most dynamic companies, I must say, in the LP universe, but you’re not an LP. Correc

Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) (FRA:21P) CCO Cam Battley is ecstatic about the company’s Q1 2019 financial results, which saw Aurora’s pro-forma revenue increase 333 percent to $35.8 million. According to Battley, Aurora’s earnings are “by the far the most powerful revenue quarter that any cannabis company has delivered.” He’s impressed with how the company has performed at the advent of the legal recreational market in Canada and is effusive in his praise for Aurora’s logistics team, which ensured the company’s 250 SKUs were shipped to 12 different jurisdictions across the nation. This allowed Aurora to achieve 30 percent of all rec sales in Ontario and have the four top-selling products in British Columbia since legalization occurred. Battley isn’t worried about future oversupply and believes Aurora’s status as one of four companies with EU GMP certification will allow the company to continue its rapid growth.

James West:   Welcome back, everybody. You won’t believe who’s here: it’s Cam Battley, CCO of Aurora Cannabis joining us for the, I don’t know, 256th time?

Cam Battley:  It’s been a few times.

James West:   It’s been a few times. Cam, you just got back from Las Vegas.

Cam Battley:  Did I? Yes, yes I did.</

Sprott Inc (TSE:SII) (OTCMKTS:SPOXF) (FRA:A78) CEO Peter Grosskopf explains the advantages the company’s recently launched OneGold platform offers precious metals investors. OneGold allows investors to securely buy, sell, and trade digital gold and other precious metals such as silver. Digital gold is on the Blockchain and is backed by physical gold, a marked difference from other cryptocurrencies, which have seen their values plummet in recent months. OneGold Investors receive a digital certificate of the stored physical gold that is underlined by Blockchain and can be issued in any denomination. Individuals can buy or sell gold on the OneGold website faster than through a commercial bank or ETF. Grosskopf envisions OneGold developing a wallet system that allows investors to use gold to pay for goods and services, giving gold investing a new practicality.

James West:   Welcome back. My guest this segment is Peter Grosskopf; he’s the CEO of Sprott Inc., trading on the TSX under symbol SII. Peter, welcome.

Peter Grosskopf:   Yeah, thanks for having me.

James West:   Peter, we could talk forever about Sprott and all of its various peregrinations, but today I want to talk to you about the One Gold product that I recently received an email about. What is One Gold?

Peter Grossko

Province Brands of Canada CEO Dooma Wendschuh and his team are tired of waiting for the federal legalization of cannabis-infused beverages in Canada and have taken matters into their own hands. The company has launched Cambridge Bay Pilsner, a beer brewed from entirely from hemp, with no THC, and an alcohol content of 7 percent. Province Brands has entered into a partnership with Whitby, Ontario’s Brock Street Brewing to produce the beer; additionally, Province Brands has also licensed its proprietary hemp brewing technology to Brock Street. Wendschuh explains that beers brewed from hemp and marijuana have considerably less calories than traditional alcohol and anticipates Province Brands opening the world’s first cannabis brewery, ready to sell THC cannabis beverages, by October 2019.

James West:   Hey, welcome back! My guest in this segment is Dooma Wendshuh, CEO of Province Brands of Canada. Dooma, welcome back.

Dooma Wendschuh:   Thank you. It’s an honour to be here.

James West:   Dooma, I’m going to first ask you – why are you bundled up as if it’s minus 10 degrees about?

Dooma Wendschuh:   Because it’s about minus 10 degrees out. I’m in les Iles de la Madelaine, and we had a severe storm, 110 km per hour, and lost power, so I’m just trying to stay warm, but I’m honoured to be here trying to do the interview with you.

James West:   Uh huh, well, that’s awesome. The reason for our conversation today is, Brick Street Brewing announced that they had done a deal with you and were actually going to be licensing your technology to create a line of beer? Is that what’s happening?

Dooma Wendschuh:   It is happening. I should correct the pronunciation: it is Brock Street Brewing, and they are a fantastic brewery in Whitby, Ontario, near Pickering, and we are thrilled to be working with them. And it’s very interesting what we are doing with them. As you probably know, we have developed our own process to brew the world’s first beers brewed from the cannabis plant, and we have developed this process to primarily brew beers that are non-alcoholic and intoxicate using Marijuana or its Phyto cannabinoids. And as we’ve been developing this process, we’ve happened to test it, in many cases, on hemp, which is another kind of cannabis.

And we just sort of got tired of waiting for legalization to take pace here in Canada, and for them to allow beverages and edibles like the rest of the world, which has already legalized medical or recreational marijuana does permit, and so we decided we would launch a marijuana-free beverage that is brewed from cannabis. And this we call Cambridge Bay. It is the world’s first beer brewed from cannabis; it’ll be available in early next year. It contains no marijuana; it is brewed from a different type of cannabis, its brewed from hemp.

And what happened was, the folks at Brock street learned about this, and we’ve signed a very unusual deal with them, one that would enable u

HelloMD is a cannabis-orientated health and wellness digital medical platform that connects patients with medical professionals. Founder and CEO Mark Hadfield discusses how his platform has a cost and convenience advantage; HelloMD services are online and this private and secure interaction helps more reticent patients overcome the stigma associated with cannabis. HelloMD also works with licensed producers to make cannabis products available to consumers; the medical platform offers a full e-commerce experience to its California customers, including one-hour deliver. HelloMD is one of the few digital medical platforms that has scaled across states and countries, and is now available to Canadian patients. In additional to its revenue streams which include product sales and delivery, HelloMD also produces cannabis health content in the form of videos, interviews, and posts, which assists in patient referrals.

James West:   Hey, welcome now. My guest joining me from San Francisco via Skype is Mark Hadfield, CEO of HelloMD. Mark, welcome.

Mark Hadfield: Thank you, James. Thank you for having me.

James West:   Sure, you bet. Mark, let’s start with an overview: what is the business of HelloMD?

Mark Hadfield: Sure. Well, HelloMD was founded about four years ago in California by myself, with a focus on health and wellness cannabis consumers. Our initial service was a tie service where we connect patients and doctors over video link, much like this Skype link.   And but then over the four years we evolved into a full demand-side platform, so what we do is, we seek to answer all the questions that cannabis consumers have. You know, which includes beginning with consultation with a doctor or medical professional, but then product advice, advice on all sort of things. It’s just a confusing landscape for many new consumers to come into, so the company has involved into a B2B and a B2C demand-side platform, and we have about 100,000 patients that we’ve connected with doctors, and we have a growing community of about 250,000 people on the platform.

James West:   Okay, so are those patients currently all in the US?

Mark Hadfield: Well, actually, over the four years we’ve also expanded the territory. So we started in California, we opened in Canada recently with B2B offerings, and then we’ve expanded our service offering to include e-commerce cannabis sales and delivery to California. And then nationwide CBD sales throughout all 50 states in America, which we obviously see as a massive, growing market.

James West:   I see. So is –

Mark Hadfield: So we’re one of the few tech platforms that has scaled across borders, state borders and national borders, and because we don’t touch the plant, of course we’re able to do that. So that’s something a lot of cannabis companies struggle with, is geographic scale.

James West:   Okay. So is your focus exclusively cannabis oriented?

Mark Hadfield: Well, it’s health and wellnes