Premium Cannabis: The guest emphasizes a strict focus on premium cannabis, highlighting quality, genetics, and consumer experience as core differentiators.
Key Company (ROMJ): Rubicon Organics (ROMJ) is presented as Canada’s leading premium cannabis house with brands Simply Bare, 1964 Supply Co., and Wildflower driving category leadership.
Canadian Cannabis: Discussion centers on converting legacy-market consumers, premium’s sub-20% share opportunity, and a market shift toward brands and channels rather than commodity production.
Cannabis Genetics: A multi-year genetics program (“Fight Club”) aims to deliver novel, terpene-rich strains, building global leadership and long-term brand equity.
Capacity Expansion: A newly acquired licensed facility (Cascadia) adds ~40% capacity with first revenues expected in H1 and a Q3 inflection, targeting strong demand for large-format premium products.
International Cannabis: Early demand in Germany, Poland, and Australia supports a brand-led export approach, with current test-and-learn shipments and future GMP pathways considered.
Financial Snapshot: Record revenue as of June 30, solid liquidity (cash and working capital), and a valuation multiple noted as discounted relative to broader markets despite profitability.
Opportunities & Risks: Key catalysts include ramping Cascadia, international brand development, and ROI under two years for the new facility, with execution and regulatory certification as watch items.
Transcript
to introduce our next presentation here today. It's going to be a phenomenal a really really really good excellent best fireside chat between uh Rubicon Organics that's being hosted by Matthew Martin from Reevon Microafon. >> Thanks Bobby. That that's quite the intro. >> Sitting sit okay. >> Okay. All right. So I I'll start by disclosing that the Reevont Microcap fund is a shareholder of Rubicon Organics. So that's out of the way. Uh Margaret, let's start with the one minute elevator pitch on Rubicon Organics. All right. I don't have all my slides uh with me, but I can do a very sneaky quick little Who is Rubicon Organics? I see a lot of friendly faces in the crowd and so thank you for coming and supporting us today. We are Canada's leading premium uh cannabis company which I know the word cannabis has a lot of investors shuttering after the last number of years but we're looking to build a reputationally strong high integrity high quality company and we're doing that through our proven brands. So we have three uh flagship brands. They are leading brands in each of their categories. Simply bear Organic 1964 and Wildflower. And we'll talk about each of them in a little bit. how we do what we do is around quality. Um our we have two facilities. One is just about to turn on and I know we'll talk about that today. But our main stay facilities called Pacifica in Delta, British Columbia. Best place in the world in our view to grow weed. Um and uh and it we grow with living soil in that facility which gives us unique IP uh beautiful tarpin which is the flavors in your cannabis. And um we're on a very exciting and interesting growth trajectory that we're going to talk about about a little bit today. All right, that's that's great. Thank you. U Margaret, can you tell us more about your background and uh you know how you got involved with the company? >> So, I was a competitive rower. I'm very tall as you can see. Um through high school and university, I was that kid that was up at 4:45 in the morning. Uh and uh hurt my back and really wanted to be in business um when I was about just made the national bot. Never made the A boat. Um and uh ended up getting the opportunity to travel abroad quite a bit with uh Solder Business School. Um then went and did my CPA at uh KPMG. Spent seven years almost seven years there in sorry 11 years there but seven in the UK. Um then worked in the mining industry uh with an individual who had five public companies that were very much on the growth trajectory. learned a lot more about I would say going to a corporate development group uh than it is uh I wanted to build something and that was my passion. I got tapped on the shoulder by a friend who said I'm going to be the first money into Rubicon. So I said uh you know this was 2015 pre-legalization and at that time I said uh thank you very much but I don't think this is the right fit for me. Um, on the third phone call, out of respect for this individual, I took the meeting and I understood how I could help and I understood that I knew how to build a business, build a team, get it going, and I said, "I'll work nights and weekends." That was over 10 years ago now. And three years ago, I transitioned into the CEO chair. And since that time, you know, the the the beginning of my term, we were very much in a down market with cannabis. there was still a lot of price compression from over supply and there was no money coming into the into the sector. So nobody was going to come and save you. Um in under my term in particular in the last year we saw the turn in the market at the end of last year and decided to be much bolder with where we wanted to go. Uh and so here we are today in what we're calling our transformation year. >> That's great. Um, one thing that also impressed me from the get-go about Rubicon, you know, when you invest in micro cap companies, it's a bet on the jockey type of thing. So, at least for me, so I pay a lot of attention to the team, the executive team and the board, and I think you have a very impressive team and board. So, I'd like you to um touch a little bit more on that. >> I wish I had their slides in here. Um, we're very, very lucky to have some incredible talent on our team. Our chief operating officer is a woman named Mel Ramsey. She came from buyers, she started her career at the body shop, then buyers dorf in Germany with the Nivea brand and then worked with Dagio in growth markets around the world. Um and then we recruited her to Rubicon. Uh our form she was friends with our former president. Um Glenn Ibett who's here today uh tried to retire um has too much energy for that. Uh and uh we were very fortunate this year to bring Glenn into the organization. and he's currently our interimm CFO, but Glenn's been through scale and been through a lot of uh a lot of different growth with the his time at Aurora for 7 years. So, we're it's it's been a real game changer bringing him on the team as well. In addition, we've got real depth through our executive team of people that we've we've we you know, we have a bias to promoting our people because they've learned grit. They've learned not about not having tons and tons of resources. So they're very um they're they're very solutionsoriented um and uh and and driven to be better and to win. We also as a $40 million have company have a board of a billion dollar company. So uh three years ago as I was coming on board and still in the interimm chair our existing uh directors at the time said this is time to do what's next for the company. We're going to bring in a very investable board. We were very lucky to attract incredible talent. We've got the likes of Michael Detliffson who's a well-known strategist and um and has incredible experience around the world. Ian Gordon was with Loblaw's uh the significant part of his career, very senior in the organization. Karen Proud is currently the was the president of Fertilizer Canada, so knows government very well, and now is the CEO of the grocery code of conduct. Um, Doris Spitz, our current chair, took a business from 80 million to 800 million in scale. These individuals are not people that are giving me a rubber stamp. Uh, and I can tell you there are days when I think we probably should have [laughter] we should have gone with with with a board that's not going to push us as much. But one of our values in our company is excellence. And I like to call it competitive spirit. Just because we're the cheesy West Coast weed people doesn't mean we don't want to win. And uh, we want to win. So we've got a board to to help us to do that. >> And I would also add that the the amount of insider ownership in the company is pretty high and the board members have stepped up to the plate in the last financing also to to invest their own capital behind the business. So that's another thing for people to consider as well. Uh okay, let's dive into the business. You know, you have your three brands up on the screen. Uh can you tell us more about the brands and you know the the market positioning for Rubicon in the market? So, we focus on the premium sector. Our vision is to be the most trusted house of premium cannabis brands. You'll notice it doesn't just say in Canada. Um, and we're looking to elevate experiences for people everywhere. In elevating experiences, um, that's our internal rallying cry. It's around everything that we do from sending our pallets out to our largest customers on time, in full, um, and being measured on such. It's every consumer opening a package and having a great experience. So we've built our brand portfolio on that basis. Um we are very focused on staying in premium. We don't want to go into the other categories. We've we've looked and like to test and learn. Our first brand is our Simply Bear organic brand. It's our most profitable brand. Um and we that brand is really about leading genetics. Uh beautiful tarpin rich experience for the connoisseur and new news. uh the we've spent the last 3 years um working on what we call fight club and I won't tell you much about fight club other than it is fight club which is our genetics uh strategy and that is about getting new and novel interesting flavors into the market we want to be not just Canada's leaders on genetic we want to be the world leader and how we're doing that is demonstrating consistently bringing out beautiful genetics in that Simply Bear brand we believe in 3 to 5 years there'll be considerable value attached attached to that. Um, and it's more like the fashion house. So, if you think of uh looking at Paris Fashion Week, and I'm sure all of you are very into Paris Fashion Week, these extravagant and really interesting things come down the runway, but they make all their money off of handbags and perfume. And I think I want you to think like that about um how simply bare is a a it's very profitable. So it's a little bit different than the fashion houses, but b it shows um innovation and interest to those that to the connoisseurs in the market and gives us a bit of a halo. The next brand, which is the engine of our business, is called 1964 Supply Co. And if you're very nice to me, I have brought product that we have to buy in store. Um, and uh, I can personally provide it to you. Um, and uh, so if you want to have a few little tests or if you're meeting with us one-on-one. Um, but 1964 is looking for the legacy consumer and recruiting them in to the legal market. That's something that we as the uh, the legal market need to do a very good job on. Somewhere between 20 and 40% of consumers are still purchasing in the legacy market. That is the biggest white space in the Canadian cannabis industry currently. And we have a considerable amount of demand around our 1964 brand. It's really bringing those legacy strains into market. It won brand of the year last year. It also won flower of the year twice in the last two years at sort of the Oscars of Canadian cannabis. It won vape of the year, best new product of the year, edible of the year. Did I say hash? And then at those awards, Simply Bear was the writein by Bud Tenders of the brand that they love the most. So, um, we're very, very proud of that portfolio, and that's really a flower forward portfolio. Our third brand that's up there is called Wildflower. It started out with a with a stick. Um, as we're a recreational company, we can't make medical claims, but we do have um a a topical stick. I like to call it very similar to Voltar, and I use it for my sore knee and tight neck. Um, my 78-year-old mother uh uses it every day. The wildflower stick is very effective, but we also have found the wellness consumers looking to to satisfy need states. So whether it's pain relief, sleep or relaxation, the that range um follows the same approach. And I'd say that um very proud to say that the wildflower stick is the number one topical in Canada and has been for at least three years, probably longer. I haven't looked at it. >> Thank you. Thanks for that. Um, I'm glad you touched on the the genetics piece in the first part of your answer because you know when I look at the cannabis industry and I think most people uh think this is a a commodity industry but you know it is to some extent but like having a strong genetics portfolio I think is key and the the LPS that are winning in the market today have these uh strong uh you know genetics development pro um programs. Um so I'm I'm glad you touched on that. Le let's talk about the cultivation. Uh you know you have two assets now. Um you know what's what's what can you tell us about the cultivation? >> So we love to grow weed and because it's called a weed everybody assumes it's very easy to grow. It's very easy to grow poorly I would say and it does grow very well poorly. I see a number of nods. People have probably tried to grow it and if you try to smoke what you grow at home unless you're a very knowledgeable person it's typically not very successful. Um we I see in 15 years cannabis will be an ingredient uh but there will always be a home for a beautiful premium weed and that's what we do very well. So we started um in Delta British Columbia which is about if you've been there many many people have um it's about half an hour from downtown very close to the airport. Uh our Pacifica facility is 125,000 square feet on 20 acres of land. there is the capability if we so desire to build further that is an all organic certified organic facility we are the world's largest scaled um and I think at this stage only scaled premium organic facility so we're leading which is exciting um what why does that win and why does organic win is because it gives a very richness to the flavor of the plant so if you think about the root ball we grow in pots each of those root balls um they uh it becomes a little bioreactor where the plant has to work hard to pull the f fertility out of the living soil rather than kind of like at home with your house plants, you probably put a liquid feed into it and dump it on top. We don't do that. We actually do it through the the recipe of the soil and the fertility. It forces the plant to work harder and then when it goes to flower time, it's when the plant is stressed and it produces more expression and a more quote unquote desirable flower for someone to come and check out. So, um, the the Pacifica facility is is really the start of everything we do. But very excitingly, and if you saw our press release on Monday morning, um, we purchased a facility at the beginning of this year, um, we we closed the deal in June, raised some money uh, in the springtime, actually in a very tough market. Um, and today are proud owners of a licensed facility, which was the first licensed facility in British Columbia. um is now licensed again to it was a profitable premium facility at the time. It's about an hour and a half from our existing facility so easy to manage from an operational perspective. Um and uh we are we are moving very quickly to get that up up and going. It will add about 40% capacity. Uh a good CEO would tell you uh we probably under call we want to under underpromise and overd deliver. The company before us said it had 6,900 kilos of premium capacity. We've said 4,500. Um, we know it's going to take a minute to, we're very pragmatic. It's going to take a minute to get that optimized and we expect to see first revenues from that in the first half, but I think the engine will really turn on. We'll see out of the third quarter for us next year. We're at a very exciting spot because the next question is, well, can you sell it all if you've got that product? Right. That was your next question. Yeah. [laughter] Sorry, he went darn it. I'm stealing the mic. Um the uh we believe we can we have strong demand for our brands in particular the 1964 brand. So why having an indoor facility is exciting is because we can take genetics that we weren't able or that we grew at our at our Pacifica facility but maybe couldn't optimize and get really strong yield. We can put them in a different environment and we believe they'll do very well there. So we have a large demand for large format bags which is where the largest legacy consumer purchases Thank you. Um, so, so where do you see uh the most growth opportunities, you know, with this new uh cultivation capacity that you're turning on? Like where will you you place this this this volume? Well, >> so Canadian cannabis has moved to the channel and the brand. So, there are a lot of people growing large volumes of weed at mid-grade and value scale. What we're not seeing is new net new premium facilities turning on whether in Canada or around the world. So we're very excited to be sitting in that positioning. Um we have demand and we see that we could sell all that product today in Canada if we had it. Um and I I say that very confidently, but we also have a lot of demand around the world for premium weed. Those uh there has been big opportunity in the the weed world for just any product going anywhere into those markets. So Germany, uh, Poland and Australia being the current early markets, what we're seeing is that consumers start to move and ask for more premium products. Uh, but we expect as we look towards the international markets, we will not be diverting our attention away from our core domestic market which got us here. Um, but we're are if you go back to the vision that I stated at the beginning, it's brand uh branded premium house of brands. And as we look internationally, we'll be looking to build brands and not sell hockey bags of weed. At this point, I think it it might be helpful for people to get a bit of a financial snapshot. You know, I mean, those those who know me uh you know that I like to invest in companies that are growing and profitable uh with a strong balance sheet, which I I believe is the case here, but uh yeah, what can you tell us about the financials? >> So, I'm in a quiet period for Q3. Um and uh I can tell you at June 30th, we released our results. We had record uh revenue. Reminding you that over the last three years, we've built the business from one single facility and almost doubled the revenue. Um that's because we've used contract manufacturing contract grow and the launch of new products under our brands to build the business. We now expect that we're going to be putting new throughput through that with the supply. We have the brands, the demand, the team. We just need more to go through it. Even though in that environment we in the second quarter had 7 million in cash, 20 million in working capital. We're currently trading at about 6 of our revenue. And uh it was fun yesterday listening to the conversations where people were pitching and hearing that companies are trading at 11 12 times next year's IBIDA and I'm going we're trading eight times last year's IBIDA. You know, it's just cannabis has been punished but there are very good companies emerging. >> I totally agree with that. Um, okay. In terms of uh, you know, catalysts or milestones, you know, what would you like to achieve over the next 12 months? What what should the investors look out for? >> Watch for Cascadia and the the the first harvests and the operations. You're going to start to see that in our results in the first half. Um, but really we're we're committing more that the third quarter will be when we'll see the inflection point. Um so that trajectory and then we've done something called a test and learn into the international markets. Uh again we'd like to move into a branded play. I expect within 12 months we'll be looking at that. It will depend on we need to make sure we're satisfying our Canadian customers first and then moving to the international markets with the branded play. >> Let's uh open it up to uh maybe Q&A from the audience. Does anybody have questions? Yeah. on you want to ask the question. >> Yeah. So the question is the the ROI on the the the RARI on the new facility. >> So we p the we purchased the new facility for $4.5 million to build it today. Um we had someone walk through. They said it would be 12 to 13 plus 2 million on the land plus the specialist cannabis equipment in it. So my estimation 18 to 22 million something like that. Great um great acquisition for us. We spent 4 and a half we've spent about 1 and a half to date. We've got another 500,000. I'm sure there'll be optimization things that we identify. All of that is to say we expect it's well less than two years on a payback. Um depending where we place the product, it could be as low as a year. Um but we're very bullish on it. And uh the nice thing is if if I if I remind you the brands are there, the team is there. We're just putting more throughput through the existing um the existing uh channels that we've got. So it puts us in a great position from a profitability perspective and all that product will go to a a bulk packed stage and actually be be finished and packaged back at our main facility. So it will be very efficient in terms of use of of resources. That's great. Thanks. You refer to uh >> Thanks Matthew. That that was great. Thank you. When you refer to uh premium, can you define um premium in your eyes and maybe like uh the market is you know whatever 5, six, 7 billion I think in Canada. How much of that is premium? What's the difference between the price for for a gram of premium versus the hockey bag uh weed that you refer to? Thanks. That was a great and slightly tricky question. Uh there is one set of data that is widely used by analysts called highfire. Highfire when you look at it doesn't look at it on a brand level. So there's it looks at it on price level. So it takes premium as anything as 20% higher than average price which means brands can move in and out depending on price compression. We um when we speak publicly to the market, we speak to about our brands using that data because that is actually the most punishing to us. When you look at truly on the shelf and you walk into a store and you talk to a bud tender, there are certainly super premium premium mainstream and then value brands within Canadian cannabis. um a premium a premium product. So an eighth which is three and a half grams of our Simply Bear product here in Toronto would be about $45 to the consumer. 1964 the same format would be about $35. Okay. The cheapest that you could probably buy is maybe around 20 in the market at value. I see a lot of nodding heads so I think my pricing is pretty good. Um the uh so so that's the range. What is premium? uh kind of similar to scotch whiskey or wine. That's where where you'd think about the differential. You know, we're looking for a a single malt reserve 16-year to try and speak language of many people versus a blend from whatever was available to the value sector. That's kind of the the the experiential difference. Um and uh in terms of the size of the market, uh I believe premium is currently under 20%. And based on the way the data has moved, it's actually moved down in market, but we've seen our share growing. Um and we've seen our sales go up in our in our super premium category. So, uh sometimes the data being cut, it depends on the way you cut it. So, we try to play it as straight as possible. Um and in terms of the legacy market, I actually think it skews more premium. heavy consumers still buy from the legacy market because of the early days of Canadian cannabis. They were very burned by very high prices and very poor quality. So, it's taken a while to get them back. We have time for one last question. >> Process. Are you in the process of of obtaining your EUGP certification? Um, if you are, how long will that take before you get it? How many products do you have registered in Poland and what other European markets are you um looking at? >> That was a great question. So, as I said, we focused on the Canadian market. We have a GAC pre certification at our Pacifica facility, which allows for export to an EUGMP facility. That is um this year with uh the international markets, we've done test and learn. We've had to pull some product and we it'll be probably less than a million dollars of revenue total for the year. Um because we're testing partners and learning accountability. Um we've I've been in this game 10 years. I've learned a lot about how you do business with people. Uh we do business with people and trusted teams. Um and are looking at channels. So we've we by the end of this year we'll probably have three markets. We have not gone through stability studies and and and long processes with uh various companies. I believe in the next call it three maybe four years we will need EUGGMP or if there's a Canadian GMP standard within our business but we don't have it today and we're not actively pursuing it today. >> That's all the time we have. Thank you very much Margaret. Feel free to come see Margaret if you have more questions. Thank you Glen.
Rubicon Organics (TSX-V: ROMJ, OTCQX: ROMJF) Fireside Chat w/ Mathieu Martin, Rivemont MicroCap Fund
Summary
Transcript
to introduce our next presentation here today. It's going to be a phenomenal a really really really good excellent best fireside chat between uh Rubicon Organics that's being hosted by Matthew Martin from Reevon Microafon. >> Thanks Bobby. That that's quite the intro. >> Sitting sit okay. >> Okay. All right. So I I'll start by disclosing that the Reevont Microcap fund is a shareholder of Rubicon Organics. So that's out of the way. Uh Margaret, let's start with the one minute elevator pitch on Rubicon Organics. All right. I don't have all my slides uh with me, but I can do a very sneaky quick little Who is Rubicon Organics? I see a lot of friendly faces in the crowd and so thank you for coming and supporting us today. We are Canada's leading premium uh cannabis company which I know the word cannabis has a lot of investors shuttering after the last number of years but we're looking to build a reputationally strong high integrity high quality company and we're doing that through our proven brands. So we have three uh flagship brands. They are leading brands in each of their categories. Simply bear Organic 1964 and Wildflower. And we'll talk about each of them in a little bit. how we do what we do is around quality. Um our we have two facilities. One is just about to turn on and I know we'll talk about that today. But our main stay facilities called Pacifica in Delta, British Columbia. Best place in the world in our view to grow weed. Um and uh and it we grow with living soil in that facility which gives us unique IP uh beautiful tarpin which is the flavors in your cannabis. And um we're on a very exciting and interesting growth trajectory that we're going to talk about about a little bit today. All right, that's that's great. Thank you. U Margaret, can you tell us more about your background and uh you know how you got involved with the company? >> So, I was a competitive rower. I'm very tall as you can see. Um through high school and university, I was that kid that was up at 4:45 in the morning. Uh and uh hurt my back and really wanted to be in business um when I was about just made the national bot. Never made the A boat. Um and uh ended up getting the opportunity to travel abroad quite a bit with uh Solder Business School. Um then went and did my CPA at uh KPMG. Spent seven years almost seven years there in sorry 11 years there but seven in the UK. Um then worked in the mining industry uh with an individual who had five public companies that were very much on the growth trajectory. learned a lot more about I would say going to a corporate development group uh than it is uh I wanted to build something and that was my passion. I got tapped on the shoulder by a friend who said I'm going to be the first money into Rubicon. So I said uh you know this was 2015 pre-legalization and at that time I said uh thank you very much but I don't think this is the right fit for me. Um, on the third phone call, out of respect for this individual, I took the meeting and I understood how I could help and I understood that I knew how to build a business, build a team, get it going, and I said, "I'll work nights and weekends." That was over 10 years ago now. And three years ago, I transitioned into the CEO chair. And since that time, you know, the the the beginning of my term, we were very much in a down market with cannabis. there was still a lot of price compression from over supply and there was no money coming into the into the sector. So nobody was going to come and save you. Um in under my term in particular in the last year we saw the turn in the market at the end of last year and decided to be much bolder with where we wanted to go. Uh and so here we are today in what we're calling our transformation year. >> That's great. Um, one thing that also impressed me from the get-go about Rubicon, you know, when you invest in micro cap companies, it's a bet on the jockey type of thing. So, at least for me, so I pay a lot of attention to the team, the executive team and the board, and I think you have a very impressive team and board. So, I'd like you to um touch a little bit more on that. >> I wish I had their slides in here. Um, we're very, very lucky to have some incredible talent on our team. Our chief operating officer is a woman named Mel Ramsey. She came from buyers, she started her career at the body shop, then buyers dorf in Germany with the Nivea brand and then worked with Dagio in growth markets around the world. Um and then we recruited her to Rubicon. Uh our form she was friends with our former president. Um Glenn Ibett who's here today uh tried to retire um has too much energy for that. Uh and uh we were very fortunate this year to bring Glenn into the organization. and he's currently our interimm CFO, but Glenn's been through scale and been through a lot of uh a lot of different growth with the his time at Aurora for 7 years. So, we're it's it's been a real game changer bringing him on the team as well. In addition, we've got real depth through our executive team of people that we've we've we you know, we have a bias to promoting our people because they've learned grit. They've learned not about not having tons and tons of resources. So they're very um they're they're very solutionsoriented um and uh and and driven to be better and to win. We also as a $40 million have company have a board of a billion dollar company. So uh three years ago as I was coming on board and still in the interimm chair our existing uh directors at the time said this is time to do what's next for the company. We're going to bring in a very investable board. We were very lucky to attract incredible talent. We've got the likes of Michael Detliffson who's a well-known strategist and um and has incredible experience around the world. Ian Gordon was with Loblaw's uh the significant part of his career, very senior in the organization. Karen Proud is currently the was the president of Fertilizer Canada, so knows government very well, and now is the CEO of the grocery code of conduct. Um, Doris Spitz, our current chair, took a business from 80 million to 800 million in scale. These individuals are not people that are giving me a rubber stamp. Uh, and I can tell you there are days when I think we probably should have [laughter] we should have gone with with with a board that's not going to push us as much. But one of our values in our company is excellence. And I like to call it competitive spirit. Just because we're the cheesy West Coast weed people doesn't mean we don't want to win. And uh, we want to win. So we've got a board to to help us to do that. >> And I would also add that the the amount of insider ownership in the company is pretty high and the board members have stepped up to the plate in the last financing also to to invest their own capital behind the business. So that's another thing for people to consider as well. Uh okay, let's dive into the business. You know, you have your three brands up on the screen. Uh can you tell us more about the brands and you know the the market positioning for Rubicon in the market? So, we focus on the premium sector. Our vision is to be the most trusted house of premium cannabis brands. You'll notice it doesn't just say in Canada. Um, and we're looking to elevate experiences for people everywhere. In elevating experiences, um, that's our internal rallying cry. It's around everything that we do from sending our pallets out to our largest customers on time, in full, um, and being measured on such. It's every consumer opening a package and having a great experience. So we've built our brand portfolio on that basis. Um we are very focused on staying in premium. We don't want to go into the other categories. We've we've looked and like to test and learn. Our first brand is our Simply Bear organic brand. It's our most profitable brand. Um and we that brand is really about leading genetics. Uh beautiful tarpin rich experience for the connoisseur and new news. uh the we've spent the last 3 years um working on what we call fight club and I won't tell you much about fight club other than it is fight club which is our genetics uh strategy and that is about getting new and novel interesting flavors into the market we want to be not just Canada's leaders on genetic we want to be the world leader and how we're doing that is demonstrating consistently bringing out beautiful genetics in that Simply Bear brand we believe in 3 to 5 years there'll be considerable value attached attached to that. Um, and it's more like the fashion house. So, if you think of uh looking at Paris Fashion Week, and I'm sure all of you are very into Paris Fashion Week, these extravagant and really interesting things come down the runway, but they make all their money off of handbags and perfume. And I think I want you to think like that about um how simply bare is a a it's very profitable. So it's a little bit different than the fashion houses, but b it shows um innovation and interest to those that to the connoisseurs in the market and gives us a bit of a halo. The next brand, which is the engine of our business, is called 1964 Supply Co. And if you're very nice to me, I have brought product that we have to buy in store. Um, and uh, I can personally provide it to you. Um, and uh, so if you want to have a few little tests or if you're meeting with us one-on-one. Um, but 1964 is looking for the legacy consumer and recruiting them in to the legal market. That's something that we as the uh, the legal market need to do a very good job on. Somewhere between 20 and 40% of consumers are still purchasing in the legacy market. That is the biggest white space in the Canadian cannabis industry currently. And we have a considerable amount of demand around our 1964 brand. It's really bringing those legacy strains into market. It won brand of the year last year. It also won flower of the year twice in the last two years at sort of the Oscars of Canadian cannabis. It won vape of the year, best new product of the year, edible of the year. Did I say hash? And then at those awards, Simply Bear was the writein by Bud Tenders of the brand that they love the most. So, um, we're very, very proud of that portfolio, and that's really a flower forward portfolio. Our third brand that's up there is called Wildflower. It started out with a with a stick. Um, as we're a recreational company, we can't make medical claims, but we do have um a a topical stick. I like to call it very similar to Voltar, and I use it for my sore knee and tight neck. Um, my 78-year-old mother uh uses it every day. The wildflower stick is very effective, but we also have found the wellness consumers looking to to satisfy need states. So whether it's pain relief, sleep or relaxation, the that range um follows the same approach. And I'd say that um very proud to say that the wildflower stick is the number one topical in Canada and has been for at least three years, probably longer. I haven't looked at it. >> Thank you. Thanks for that. Um, I'm glad you touched on the the genetics piece in the first part of your answer because you know when I look at the cannabis industry and I think most people uh think this is a a commodity industry but you know it is to some extent but like having a strong genetics portfolio I think is key and the the LPS that are winning in the market today have these uh strong uh you know genetics development pro um programs. Um so I'm I'm glad you touched on that. Le let's talk about the cultivation. Uh you know you have two assets now. Um you know what's what's what can you tell us about the cultivation? >> So we love to grow weed and because it's called a weed everybody assumes it's very easy to grow. It's very easy to grow poorly I would say and it does grow very well poorly. I see a number of nods. People have probably tried to grow it and if you try to smoke what you grow at home unless you're a very knowledgeable person it's typically not very successful. Um we I see in 15 years cannabis will be an ingredient uh but there will always be a home for a beautiful premium weed and that's what we do very well. So we started um in Delta British Columbia which is about if you've been there many many people have um it's about half an hour from downtown very close to the airport. Uh our Pacifica facility is 125,000 square feet on 20 acres of land. there is the capability if we so desire to build further that is an all organic certified organic facility we are the world's largest scaled um and I think at this stage only scaled premium organic facility so we're leading which is exciting um what why does that win and why does organic win is because it gives a very richness to the flavor of the plant so if you think about the root ball we grow in pots each of those root balls um they uh it becomes a little bioreactor where the plant has to work hard to pull the f fertility out of the living soil rather than kind of like at home with your house plants, you probably put a liquid feed into it and dump it on top. We don't do that. We actually do it through the the recipe of the soil and the fertility. It forces the plant to work harder and then when it goes to flower time, it's when the plant is stressed and it produces more expression and a more quote unquote desirable flower for someone to come and check out. So, um, the the Pacifica facility is is really the start of everything we do. But very excitingly, and if you saw our press release on Monday morning, um, we purchased a facility at the beginning of this year, um, we we closed the deal in June, raised some money uh, in the springtime, actually in a very tough market. Um, and today are proud owners of a licensed facility, which was the first licensed facility in British Columbia. um is now licensed again to it was a profitable premium facility at the time. It's about an hour and a half from our existing facility so easy to manage from an operational perspective. Um and uh we are we are moving very quickly to get that up up and going. It will add about 40% capacity. Uh a good CEO would tell you uh we probably under call we want to under underpromise and overd deliver. The company before us said it had 6,900 kilos of premium capacity. We've said 4,500. Um, we know it's going to take a minute to, we're very pragmatic. It's going to take a minute to get that optimized and we expect to see first revenues from that in the first half, but I think the engine will really turn on. We'll see out of the third quarter for us next year. We're at a very exciting spot because the next question is, well, can you sell it all if you've got that product? Right. That was your next question. Yeah. [laughter] Sorry, he went darn it. I'm stealing the mic. Um the uh we believe we can we have strong demand for our brands in particular the 1964 brand. So why having an indoor facility is exciting is because we can take genetics that we weren't able or that we grew at our at our Pacifica facility but maybe couldn't optimize and get really strong yield. We can put them in a different environment and we believe they'll do very well there. So we have a large demand for large format bags which is where the largest legacy consumer purchases Thank you. Um, so, so where do you see uh the most growth opportunities, you know, with this new uh cultivation capacity that you're turning on? Like where will you you place this this this volume? Well, >> so Canadian cannabis has moved to the channel and the brand. So, there are a lot of people growing large volumes of weed at mid-grade and value scale. What we're not seeing is new net new premium facilities turning on whether in Canada or around the world. So we're very excited to be sitting in that positioning. Um we have demand and we see that we could sell all that product today in Canada if we had it. Um and I I say that very confidently, but we also have a lot of demand around the world for premium weed. Those uh there has been big opportunity in the the weed world for just any product going anywhere into those markets. So Germany, uh, Poland and Australia being the current early markets, what we're seeing is that consumers start to move and ask for more premium products. Uh, but we expect as we look towards the international markets, we will not be diverting our attention away from our core domestic market which got us here. Um, but we're are if you go back to the vision that I stated at the beginning, it's brand uh branded premium house of brands. And as we look internationally, we'll be looking to build brands and not sell hockey bags of weed. At this point, I think it it might be helpful for people to get a bit of a financial snapshot. You know, I mean, those those who know me uh you know that I like to invest in companies that are growing and profitable uh with a strong balance sheet, which I I believe is the case here, but uh yeah, what can you tell us about the financials? >> So, I'm in a quiet period for Q3. Um and uh I can tell you at June 30th, we released our results. We had record uh revenue. Reminding you that over the last three years, we've built the business from one single facility and almost doubled the revenue. Um that's because we've used contract manufacturing contract grow and the launch of new products under our brands to build the business. We now expect that we're going to be putting new throughput through that with the supply. We have the brands, the demand, the team. We just need more to go through it. Even though in that environment we in the second quarter had 7 million in cash, 20 million in working capital. We're currently trading at about 6 of our revenue. And uh it was fun yesterday listening to the conversations where people were pitching and hearing that companies are trading at 11 12 times next year's IBIDA and I'm going we're trading eight times last year's IBIDA. You know, it's just cannabis has been punished but there are very good companies emerging. >> I totally agree with that. Um, okay. In terms of uh, you know, catalysts or milestones, you know, what would you like to achieve over the next 12 months? What what should the investors look out for? >> Watch for Cascadia and the the the first harvests and the operations. You're going to start to see that in our results in the first half. Um, but really we're we're committing more that the third quarter will be when we'll see the inflection point. Um so that trajectory and then we've done something called a test and learn into the international markets. Uh again we'd like to move into a branded play. I expect within 12 months we'll be looking at that. It will depend on we need to make sure we're satisfying our Canadian customers first and then moving to the international markets with the branded play. >> Let's uh open it up to uh maybe Q&A from the audience. Does anybody have questions? Yeah. on you want to ask the question. >> Yeah. So the question is the the ROI on the the the RARI on the new facility. >> So we p the we purchased the new facility for $4.5 million to build it today. Um we had someone walk through. They said it would be 12 to 13 plus 2 million on the land plus the specialist cannabis equipment in it. So my estimation 18 to 22 million something like that. Great um great acquisition for us. We spent 4 and a half we've spent about 1 and a half to date. We've got another 500,000. I'm sure there'll be optimization things that we identify. All of that is to say we expect it's well less than two years on a payback. Um depending where we place the product, it could be as low as a year. Um but we're very bullish on it. And uh the nice thing is if if I if I remind you the brands are there, the team is there. We're just putting more throughput through the existing um the existing uh channels that we've got. So it puts us in a great position from a profitability perspective and all that product will go to a a bulk packed stage and actually be be finished and packaged back at our main facility. So it will be very efficient in terms of use of of resources. That's great. Thanks. You refer to uh >> Thanks Matthew. That that was great. Thank you. When you refer to uh premium, can you define um premium in your eyes and maybe like uh the market is you know whatever 5, six, 7 billion I think in Canada. How much of that is premium? What's the difference between the price for for a gram of premium versus the hockey bag uh weed that you refer to? Thanks. That was a great and slightly tricky question. Uh there is one set of data that is widely used by analysts called highfire. Highfire when you look at it doesn't look at it on a brand level. So there's it looks at it on price level. So it takes premium as anything as 20% higher than average price which means brands can move in and out depending on price compression. We um when we speak publicly to the market, we speak to about our brands using that data because that is actually the most punishing to us. When you look at truly on the shelf and you walk into a store and you talk to a bud tender, there are certainly super premium premium mainstream and then value brands within Canadian cannabis. um a premium a premium product. So an eighth which is three and a half grams of our Simply Bear product here in Toronto would be about $45 to the consumer. 1964 the same format would be about $35. Okay. The cheapest that you could probably buy is maybe around 20 in the market at value. I see a lot of nodding heads so I think my pricing is pretty good. Um the uh so so that's the range. What is premium? uh kind of similar to scotch whiskey or wine. That's where where you'd think about the differential. You know, we're looking for a a single malt reserve 16-year to try and speak language of many people versus a blend from whatever was available to the value sector. That's kind of the the the experiential difference. Um and uh in terms of the size of the market, uh I believe premium is currently under 20%. And based on the way the data has moved, it's actually moved down in market, but we've seen our share growing. Um and we've seen our sales go up in our in our super premium category. So, uh sometimes the data being cut, it depends on the way you cut it. So, we try to play it as straight as possible. Um and in terms of the legacy market, I actually think it skews more premium. heavy consumers still buy from the legacy market because of the early days of Canadian cannabis. They were very burned by very high prices and very poor quality. So, it's taken a while to get them back. We have time for one last question. >> Process. Are you in the process of of obtaining your EUGP certification? Um, if you are, how long will that take before you get it? How many products do you have registered in Poland and what other European markets are you um looking at? >> That was a great question. So, as I said, we focused on the Canadian market. We have a GAC pre certification at our Pacifica facility, which allows for export to an EUGMP facility. That is um this year with uh the international markets, we've done test and learn. We've had to pull some product and we it'll be probably less than a million dollars of revenue total for the year. Um because we're testing partners and learning accountability. Um we've I've been in this game 10 years. I've learned a lot about how you do business with people. Uh we do business with people and trusted teams. Um and are looking at channels. So we've we by the end of this year we'll probably have three markets. We have not gone through stability studies and and and long processes with uh various companies. I believe in the next call it three maybe four years we will need EUGGMP or if there's a Canadian GMP standard within our business but we don't have it today and we're not actively pursuing it today. >> That's all the time we have. Thank you very much Margaret. Feel free to come see Margaret if you have more questions. Thank you Glen.