Canada’s cannabis market is dominated by large cultivators and processors operating at scale. Of course, most of the industry’s largest companies are more focused on margins and volume, resulting in expensive low-to-mid quality cannabis, which could be part of the reason that the illegal market still accounts for about 60% of all cannabis sales nationwide.
Health Canada began licensing small-scale commercial cannabis cultivators and processors in mid-2018 to fulfill its promise of a diverse, competitive legal industry composed of both large and small players in regions across the country. These micro-cultivators would be limited to 600kg of cannabis per year on 200m2 of cultivation space with fewer requirements.
Despite a large number of applications, micro-cultivators make up just 166 of the 665 licensed cultivators, processors and sellers under the Cannabis Act. The high costs of achieving and maintaining regulatory compliance, as well as the higher taxes associated with the legal market, have kept many micro-cultivators in the black market.
True Leaf Brands Inc. (CSE: MJ) (OTC: TRLFF) is a licensed producer that’s uniquely positioned to support the craft cannabis community in British Columbia—a region known for its rich history of cannabis cultivation.
True Leaf’s Unique Vision
The Company is the owner of True Leaf Campus, a 40 acre site zoned for cannabis production and a central 19,500 sq. ft. ‘hub’ facility built to meet strict EU-GMP requirements for future exports. The company’s goal is to tap into the growing number of quality micro-cultivators who grow premium product, and are looking for a pathway to the regulated market.
True Leaf Campus grow facility – Source: True Leaf
The company aims to provide these micro-cultivators with several services:
- Quality assurance and regulatory compliance support
- Supply contracts with progress payments and bonus incentives
- A nursery to supply clones
- High speed packaging lines for 3.5 gram jars and pre-rolls
- Anti-microbial services
- Product pricing, marketing, and distribution support
True Leaf’s management team believes that its True Leaf Campus – which just received preliminary approval for subdivision – could be worth nearly $13 million, which would mean that its stock is trading near book value with its market capitalization of around $13 million. After closing a $1.5 million oversubscribed private placement and securing a cannabis license, the company is ready to unlock that value.
In April 2021, the company began in-house production of craft cannabis at its facility sitting on the 40-acre property. The first crop will be from a craft cannabis lineage selected for its high THC and terpene content on-trend with today’s retail market with plans for harvesting in June—paving the way toward initial revenue later this year.
Focusing on Craft Quality
Consumers have shown a strong preference for craft micro-cultivators that produce higher quality products with more variety than larger brands, including products created in the tradition of the legendary BC Bud. Smaller producers are able to quickly adapt to new trends, provide more variety and connect more deeply with the communities where they live.
See a video below of True Leaf’s property
True Leaf aims to produce small-batch craft supplies and together with partner Velvet Management, distribute and sell for $35 to $60 per 3.5-gram unit. With more than 40 sales representatives, 1,700 retail stores, and access to every provincial cannabis distribution board nationwide, Velvet Management is well-equipped to help ramp up these sales across the country.
The Cannabis Campus will also use its own True Tierquality assurance system to ensure all incoming products meet specific quality, THC, and terpene profiles to assist with optimal product placements. When combined with hang-drying, hand-trimming, and slow curing processes, the company aims to produce ultra-premium products backed by lab tests that exceed Health Canada standards.
The combination of high margins from premium products and scale through its micro-cultivator strategy could unlock significant long-term revenue potential.
Investing in the Vision
True Leaf Brands Inc. (CSE: MJ) (OTC: TRLFF) recently launched an equity crowdfunding and private placement for investors to participate in these ambitious plans. The proceeds from the offering will be used to execute its strategic plan to become the industry’s leading provider of seed-to-shelf solutions for micro-cultivators.
The non-brokered private placement aims to raise up to C$10 million with no minimum by selling up to 25 million units at C$0.40 a piece. Each unit will consist of one common share and one half of one common share purchase warrant that’s exercisable at C$0.60 per share for a period of 24 months following the closing date.
Prospective investors can access the offering memorandum and subscription agreement through the DealMaker platform or through any registered dealer participating in the offering. To learn more and receive an invite to the DealMaker platform, click here.
The post True Leaf Empowers Micro-Cultivators to Usher in Craft Cannabis Era appeared first on CannabisFN.