Adastra Holdings

Purveyor of Quality Cannabis Derivatives and Award-Winning Extracts

This Adastra Holdings Ltd profile is part of a paid investor education campaign.*

Overview

Adastra Holdings Ltd (CSE:XTRX,FRA:D2EP) is a licensed Canadian agricultural-scale cannabis extraction, distillation, product manufacturer, and retailer. Formerly known as Phyto Extractions Inc., the company is one of the best-known brands in the Canadian cannabis market. Its popular vapes, concentrates, and oil products are widely available at 1,400 retailers across Canada.

The company competes in the highly attractive worldwide cannabis market, The company competes in the highly attractive worldwide cannabis market, estimated to reach a value of US$50,251 million in 2021 and is expected to grow at a CAGR of 26.5 percent from 2021 to 2030.
In addition to medical cannabis use, recreational use is on the rise as markets in countries like Canada have opened through regulation in recent years. Critical factors for success in this market include the ability to navigate the complex regulatory landscape, access to supply, manufacturing and processing capability, and strong consumer brands.

Adastra operates through three businesses:

1. Phyto Extractions™ is a high-quality grass-roots cannabis brand with extensive market presence throughout Canada. Our product portfolio is set to expand from 18 to 30+ SKUs in Fiscal 2021 with the following existing and new cannabis products in the pipeline: edibles, beverages, flower (bags, pre-rolls), hydrocarbon extracts (butter, diamond, shatter, terp sauce, wax), topicals (roll-on, creams, oils, oral spray, path), and existing product SKUs for vapes.

2. Adastra Labs is a Health Canada Standard Producer (cannabis extraction, no cultivation), cannabis product formulator/manufacturer, and licensed cannabis sales (extracts, edibles and topicals) operator with a 13,000 sq. ft. facility located in Langley, BC Canada. With our newly commissioned hydrocarbon extractor, we have increased extraction capacity up to 146,000 kgs per year (agricultural scale) that makes us one of the largest full-service cannabis extraction companies in Canada. We produce and manufacture both Phyto Extractions™ branded and white label cannabis extracts and products for sale throughout Canada.

3. Chemia Analytics (chemia.ca) is Adastra’s state-of-the-art in-house testing laboratory. The facility conducts quality assurance, quality control and Health Canada regulatory compliance testing for licensed cannabis producers and products. The company plans to establish Chemia as one of the most advanced cannabis analysis, product sampling, testing and R&D labs in the industry through strategic talent recruitment and a C$1 million capital expenditure investment.

The company’s flagship Shatter product line is a high potency and high purity wax and crumble cannabis concentrate. The product is third-party tested to ensure compliance and quality standards and includes three product SKUs – Pink Kush, Blue Gorilla OG and Death Bubba. Shatter exists within a niche market alongside relatively few competitors. As a result, Shatter has the potential to be a significant opportunity for Adastra Holdings Ltd to further penetrate the cannabis market.

The company has delivered strong financial results for the six months ending June 30, 2021. Highlights include 327% revenue growth to over C$1.8 million compared to the same period last year, driven by increased processing of cannabis biomass for third party licensed producers and in-house distillate production, and hydrocarbon extraction.

Adastra’s financial success is also directly linked to the company’s constant efforts to improve profitability. Most recently, the company reduced expenses by C$7,000 a month while increasing sales by 35%. The company’s shatter and vape products are responsible for around C$1.5 million in revenue. Adastra believes that given their existing presence and market success, they can grow sales to C$4 million per month by launching new products.

The company is led by a highly experienced management team, including cannabis industry pioneers and Ph.D. experts in plant medicine and plant biochemistry. Management strongly believes in the company’s ability to succeed, which is why the company has a tight share structure and is almost debt-free. Adastra also believes there is a blue sky ahead given its extensive presence and success in the cannabis market.

Adastra Holdings Ltd’s Company Highlights

  • Adastra Holdings Ltd (CSE:XTRX,FRA:D2EP) is a leading licensed Canadian agricultural-scale cannabis extraction, distillation, product manufacturer and retailer.
  • Adrasta’s newly commissioned hydrocarbon extractor has increased the extraction capacity of its facility by up to 146,000 kgs per year
  • (agricultural scale) making them one of the largest full-service cannabis extraction companies in Canada.
  • Formerly Adastra Labs, the company is one of the most recognized cannabis brands and its [award winning] shatter and vape products are widely distributed in 1,400 retailers across Canada.
  • Adastra’s flagship Shatter product line is unique in the Canadian marketplace and has the potential to be a significant driver of growth. Shatter is a high potency and high purity wax and crumble cannabis concentrate.
  • Adastra received its Health Canada R&D license to conduct in-house human testing for various cannabis products.
  • The company operates with an attractive financial model that has the potential to generate strong returns for shareholders. The company aims to further increase revenues by launching over a dozen new product lines and white label products.
  • The company is led by a highly experienced management team, including cannabis industry pioneers and Ph.D. experts in plant medicine and plant biochemistry.

Adastra Holdings Ltd’s Key Products

Shatter

The flagship Shatter product is a signature high potency and high purity wax and crumble cannabis concentrate available in 1 gram sizes. Shatter strains come in Pink Kush, Blue Gorilla OG and Death Bubba. The product features 70% to 80% THC across product SKUs. All of Adastra’s concentrates are third-party tested to ensure compliance and quality standards.

Pink Kush contains 73.7% pure THC. The dominant terpenes are ɑ-caryophyllene, ɑ-Bisabolol and ɑ-Humulene. Pink Kush has a distinct sweet vanilla taste and scent.

Blue Gorilla OG is an Indica-dominant hybrid concentrate that contains 76.6% of THC. The dominant terpenes are ɑ-pinene, myrcene and ɑ-Humulene. Blue Gorilla OG has a blueberry flavor.

Death Bubba is a hybrid of two potent cannabinoids, Death Star and Bubba Kush, and contains 73.9% THC. The dominant terpenes are ɑ-Humulene, myrcene and ß-pinene. Death Bubba has a dank scent.

Shatter is fully extracted from butane in a closed-loop hydrocarbon system that effectively preserves the terpenes to provide consumers with a full-bodied and flavorful experience. First, the dried and cured flowers are harvested for extraction at cold to room temperature. Next, the cannabis flowers are stripped from the stems and broken up at room temperature. Then, the product is extracted with 100% butane, a hydrocarbon solvent, that captures the cannabinoids and flavonoids and filters out the undesirable plant matter, lipids and waxes at cold temperature. Once processed, the solvents are quickly purged in a vacuum oven at low heat, which leaves the final Shatter product.

On September 3, 2021, Adastra announced that it launched the Phyto Extractions full spectrum Shatter Vape Cartridge line. This product offers a convenient-use format to the fast-growing extracts segment of the Canadian adult-use marketplace.

Firestick

Firestick includes vape carts available in 1 gram, distillate vape carts and kits available in 0.5 gram and disposable vape pens available in 0.3 gram. Firestick vape carts come in pink kush, blueberry, green apple, grapefruit haze, orange, watermelon and blue raspberry. Firestick vape pens come in pineapple express, super lemon haze, blueberry and pink kush. The product features 80% to 90% THC across product SKUs. All of Adastra’s vape products are third-party tested and formulated with botanical terpenes created by an experienced formulation team. The Firestick product has been a commercial success with the company receiving few returns of the product.

The company uses CCELL® carts with ceramic coils for all vape carts and batteries. CCELL® carts are industry-leading technology with very low failure rates. Vape cart formulations are made under the terpenes threshold for CCELL® carts, which results in fewer leaks. The vaporizer also features a multi-temp M3B battery which allows consumers to choose between three different temperature settings for customizable consumption.

Firestick vape carts are produced starting with cryo-ethanol production, in which cannabinoids and terpenes are dissolved, and phyto-compounds are removed by chilling ethanol to -40 degrees Celsius. Then, a crude extract is created by falling film evaporation to remove the ethanol. Next, THCA is converted to THC by heating the crude extract through a process called decarboxylation. Then, cannabinoids are refined and separated from the crude extract through a short path wiped film distillation machine, leaving a distillate. Lastly, the distillate is tested to ensure it meets strict Health Canada guidelines in quality control and then combined with the desired terpene formulation. The lead time for 30 to 150 kg requires 2 to 3 days for extraction and 2 to 3 days for processing.

Live Resins

Live Resins are potent cannabis concentrates available in 0.5 grams. Live Resins come in Maple S and BCN Critical XXL. The product features 73% to 77% THC across product SKUs. All of Adastra’s concentrates are third-party tested to ensure compliance and quality standards. The product can also be used in vaporizers.

BCN XXL Critical is an Indica strain of live resin used by cannabis consumers and growers. BCN XXL Critical contains 76% to 77% THC content and 1.5% total terpenes. The dominant terpenes present are Limonene, ß-caryophyllene and Linalool, which provide a citrus profile with crisp lemon notes.

Maple S Live Resin is a hybrid strain of live resin that is ideal for new cannabis users. Maple S contains 73% to 74% THC and 6.2% total terpenes. The dominant terpenes present are ß-Myrcene, Limonene and ß-Caryophyllene, which provide a spicy and flavorful profile.

Live Resins are fully extracted from butane in a closed-loop hydrocarbon system that effectively preserves both volatile and non-volatile terpenes to provide consumers with a full-bodied and flavorful experience. First, the mature cannabis plants are harvested and flash-frozen to seal in the freshest and most aromatic terpenes. Next, the cannabis flowers are stripped from the stems and partly broken up. Then, cannabinoids and flavonoids are extracted with pure butane, a hydrocarbon solvent, which simultaneously filters out the undesirable plant matter, lipids and waxes. Lastly, the solvents are removed slowly in a vacuum oven during post-processing. The entire production process is completed at cold temperatures to preserve quality. As a result, Live Resins are best stored in a cool, dark place.

Terp Sauce

Terp Sauce is a full-spectrum oil available in cartridges of 0.5 grams. Terp Sauce is available in Mandarin Cookies.

Mandarin Cookie is hybrid strain oil that is 100% cannabis-derived and free of additives, carrier oils and synthetic fillers. The product contains 50% to 60% THC and 6.4% total terpenes. The dominant terpenes present are Limonene, ß-Caryophyllene and ß-Myrcene, which provide a smokey spice, citrus and pine flavor and aroma.

Terp Sauce is made using an advanced CO2 extraction process from a single source flower which preserves the flower’s terpene profile and potency. The lead time for 30 to 150 kg requires 1 to 3 days for extracting and anywhere from 2 to 4 days for processing.

Adastra Holdings Ltd’s Management Team

Michael Forbes – CEO

Mr. Forbes comes to Adastra Holdings Ltd.. with a background firmly rooted in medicine, cannabis production and entrepreneurship. Demonstrating his knowledge and experience in the cannabis industry, Mr. Forbes has founded five medical cannabis clinics, under the Concord Medical Clinic umbrella, built Clarity Cannabis and Honeycomb Cannabis retailers to over 10 locations, and has also founded the cannabis licensed cultivation facility, Sitka Weed Works, in Canada.

Having medical experience of over 16 years, Mr. Forbes has also built and operated pharmacy chains across British Columbia and Alberta, and founded a dozen medical clinics, including three methadone clinics in order to protect the public from drug diversion and increase accessibility to plant medicine.

Mr. Forbes graduated from the University of British Columbia in 2002 with a BSc. in Pharmaceutical Sciences, also achieving additional certification in Hormone Restoration, Age Management Medicine, and more recently, Cannabis Plant Production and Facility Management from Kwantlen Polytechnic University. Michael also has his private pilot’s license from Mount Royal Aviation College and was elected to attend the Ivey School of Business for Canada’s Top 40 under 40 in 2017 where he received an honorary MBA.

Donald Dinsmore – COO

Donald is a professional plant biochemist with a background working with successful research groups at the University of Calgary where he earned his Bachelors and Masters of Science degrees in Plant Biochemistry. He was Operations Manager for Heart Rock Mountain Farms, CA, USA cannabis growers..

Priyanka Nalawade – Director of Production, A/QAP

Priyanka Nalawade is a senior research and development chemist with extensive experience synthesizing and characterizing novel high-performance polymers obtained from renewable sources. Nalawade earned her Bachelor of Technology in Polymer Engineering at the Institute of Chemical Technology in Mumbai, India and a Ph.D. in Polymer Engineering at the University of Akron in Ohio in the United States.

Kyle Boniface – Director of Quality and Compliance

Kyle is a professional chemist with a demonstrated ability to communicate technical and complex information to peers, industry and academic collaborators, students and the general public. He has proven cannabis industry experience directing programs for cannabis extraction, product development and R&D. He is also named the inventor on two patents related to polymer and materials science.


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The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Adastra Holdings Ltd and seek advice from a qualified investment advisor.