CanadaBis Capital

Vertically-Integrated Cannabis in Alberta

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

Overview

CanadaBis Capital Inc. (TSXV:CANB) is a multi-faceted Canadian cannabis company that utilizes a unique capital allocation business model that focuses on four pillars: cultivation, research and product development, retail and hemp. Through this model, CanadaBis is using strategic acquisitions to diversify and vertically integrate before rolling out their operations throughout Canada and internationally.

As per the company’s cultivation strategy, CanadaBis has acquired Stigma Grow, a cannabis cultivation company developing a 66,000-square-foot craft cannabis cultivation facility in Red Deer, Alberta. Stigma is following a blueprint to construct single batch grow rooms of approximately 1900 square-feet to mitigate any potential risk that may arise during the cultivation process. Once the facility is fully operational, it will be able to produce up to 16,000 kilograms of cannabis annually with a gross margin of $84 million. The company plans on expanding further with another 66,000 square-foot facility to be constructed adjacent to the original. This will result in doubling production to 32,000 kilograms and cash flows to $161 million annually. Stigma has strategically secured enough land to add an additional 800,000 square feet of extra cultivation or processing space. The company has also developed 42 unique, proprietary strains that are mold, mildew and pest resistant after three years of research and development.

The company is also in discussions to acquire a cannabis R&D facility in Alberta as well as a wholly-owned retail location in Red Deer’s “Gasoline Alley”. CanadaBis is committed to its strategy of diversification and is also engaging in a search for an ownership stake in a high quality hemp processing and CBD extraction operation.

Company Highlights

  • Canadian cannabis market to generate up to $7.17 billion in sales in 2019.
  • Alberta’s recreational cannabis market to reach $1 billion per year.
  • Stigma Grow has a 66,000-square-foot craft cannabis cultivation facility in Red Deer, Alberta which is expected to produce up to 16,000 kilograms of cannabis annually with a gross margin of $84 million.
  • Developed 42 unique, proprietary strains that are mold, mildew and pest resistant.
  • Working to acquire a wholly-owned retail location in Red Deer’s “Gasoline Alley”.
  • Anticipated revenue generation of $9 million annually per retail store once Health Canada legalizes value-added products.
  • In discussions to acquire a cannabis R&D facility in Alberta.

The Alberta Cannabis Market

Canada’s cannabis market is expected to generate up to $7.17 billion in sales in 2019 with up to $1.68 billion coming in from western Canada. Alberta’s recreational cannabis market is expected to reach $1 billion per year. Sales are likely to increase if Health Canada decides to legalize value-added cannabis products, such as edibles.

According to Alberta provincial government, Alberta is ahead of the rest of the country when it comes to retail cannabis. The Alberta Gaming, Liquor and Cannabis Commission (AGLC) is responsible for the province’s wholesale and distribution for retail cannabis products as well as licensing retailers.

Alberta is one of the few provinces that allows both private and publicly run retail cannabis stores. As of March 2019, the AGLC had granted licenses to 75 retailers. The AGLC Chief Executive Alain Maisonneuve told the Globe and Mail that he expects 250 cannabis stores to open within the first year of legal recreational cannabis in the province.

A Vertically-Integrated Business Model

The company is focused on becoming a vertically-integrated cannabis company in Alberta. To realize this goal, CanadaBis has created a scalable capital allocation platform that focuses on four areas: cultivation, research and product development, retail and hemp.

Cultivation

CanadaBis is focused on becoming a leading craft cannabis grower in western Canada. The company intends to sell its products through the AGLC and is anticipating the launch of 11 products in the near term under the Stigma brand.

Stigma Grow

CanadaBis is in the process has acquired Stigma Grow. The company has recently received its cultivation and processing licenses from Health Canada and has applied for a sales license.

Stigma Grow has also developed a 66,000-square-foot craft cannabis cultivation facility in Red Deer, Alberta. The company is building modular grow rooms of approximately 1900 square-feet to allow for easy cultivation, care and maintenance of each individual crop. Stigma Grow has spent three years developing 42 proprietary strains that were hand selected over three years of R&D based on varying levels of THC, CBD content and terpene profiles. Stigma has found these strains to be mold, mildew and pest resistant.

The facility is being built out in three phases. Phase one of construction is complete, resulting in 22,000 square-feet of ready-to-use cannabis cultivation and processing space. Phase two will add an additional 44,000 square-feet of space.

In the third phase, Stigma Grow intends to build a second identical 66,000 square-foot facility in 2020, which will double the company’s gross margins.The company also has the right of first refusal on 20 acres of adjacent land which is equivalent to approximately 800,000 square feet of additional cultivation or processing space making future expansion extremely straight forward. Once operational, the two facilities are expected to collectively produce up to 32,000 kilograms of cannabis annually with a gross margin of $168 million.

Research and Product Development

Knowing the value of value-added cannabis products, CanadaBis is in preliminary discussions to acquire a cannabis R&D facility in Alberta. The facility is solely focused on scientific research and product development in the areas of nano-emulsion, clean extraction, distillation and soft-gel encapsulation.

Retail

CanadaBis also intends to offer cannabis consumers a high-end consumer experience through luxury department store-styled cannabis retail locations. The store layout will be sleek, sophisticated and cater to everyone.

To this aim, the company is in the process of completing a private retail company acquisition for a location in Red Deer’s “Gasoline Alley” The location consists of a 2,800-square-foot store in a high traffic area outside Red Deer on Highway 2. CanadaBis expects to generate $9 million in annual revenue after Health Canada legalizes edibles, among other products.

Hemp

CanadaBis is engaged in a search to acquire a stake in a high quality hemp processing and CBD extraction facility. The processing facility will handle the processing of hemp biomass for food production and CBD-based products, such as oils.

Management

Travis McIntyre — President, CEO and Chairman

Travis McIntyre has over 21 years of experience in Canada’s oil and gas civil construction sector and has a deep knowledge of Alberta’s safety codes and regulations. He is currently maintaining his COR, ABSA and CWB certifications. Over the past three years, he has been actively involved in various cannabinoid research and profile development initiatives. He is the company’s senior responsible person in charge (RPIC).

Kim McIntyre — VP Marketing

Kim McIntyre is the head of marketing and social media relations at CanadaBis. She also holds the title of RPIC.

Shawn Ryan — CFO

Shawn Ryan holds a Chartered Professional Accountant designation and has over 15 years of accounting, finance and tax experience primarily in the oil and gas industry. Before joining CanadaBis, he served as the controller for a private oil and gas company in Calgary, Alberta. Ryan holds a Bachelor of Business Administration degree from the University of Regina.

Mike Hicke — VP Retail and Sales

Mike Hicke has over 17 years of experience in the oil and gas industry. His experience covers construction and design through to marketing, sales and production. He has extensive knowledge of the MMPR and AMCPR regulations. He is a hydroponic, automation and plant propagation specialist. Hicke graduated from the University of Alberta where he majored in mechanical engineering.

Charlotte Murray — Quality Assurance Manager

Charlotte Murray is the manager of quality assurance and RPIC for CanadaBis. She is a registered technologist with the Canadian Society of Medical Laboratory Technology, allowing her to conduct onsite laboratory testing and a familiarity writing standard of practice documents. She holds a B.Sc. in medical laboratory science and a B.Ed. with distinction in adult education.

Barbara O’Neill — Corporate Secretary and Director

Barbara O’Neill has been a corporate secretary for a number of TSX and TSXV-listed companies primarily in the mining industry for 25 years. She has extensive experience with public offerings, public listings, exchange matters, share and asset acquisitions and dispositions. Currently, she is the corporate secretary for Jade Leader Corp.

Zachary Bouw — Master Grower

Zachary Bouw is a third generation grower. His family owns Dentooms Greenhouses, a 165,000-square-foot state-of-the-art greenhouse located in Red Deer, Alberta. Dentooms has supplied plants to Canada Tire and Costco across Alberta and small retailers across Canada. Bouw has seven years of experience growing medical cannabis and over 10 years of cultivation expertise. He completed the horticulture program at Olds College and has obtained certification from several other horticulture programs.

Scott Reeves — Director

Scott Reeves is currently a partner at TingleMerrett LLP. His areas of expertise include securities, corporate finance and commercial transactions. Reeves has advised numerous private and public companies in a wide range of business matters, including access to capital markets, corporate governance and operational issues. He graduated with a commerce and law degree from the University of Alberta while serving as editor and chief of the Alberta Law Review.

Alex Michaud — Director

Alex Michaud is currently the managing partner at Runaway Developments. He is an expert negotiator of land and developments and has over 50 years of experience. He was the owner of Transcontinental Oilfield Industries and a managing partner at Ninth Street Properties.

Gregory Smith — Director

Gregory Smith is a Chartered Professional Accountant and is currently the president of Oakridge Financial Management. He is also a director and CFO of Maglin Site Furniture. He holds a bachelor of commerce from the University of Calgary.


*Disclaimer: This profile is sponsored by CanadaBis Capital Inc. (TSXV:CANB). This profile provides information which was sourced by the Investing News Network (INN) and approved by CanadaBis Capital Inc., in order to help investors learn more about the company. CanadaBis Capital Inc. is a client of INN. The company’s campaign fees pay for INN to create and update this profile.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled. 

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 CanadaBis Capital Inc. and seek advice from a qualified investment advisor.