Large-Scale Cannabis Cultivation and Production in Nevada
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Flower One Holdings Inc. (CSE:FONE; OTCQX:FLOOF) is sharply focused on quickly becoming the leading cannabis cultivator, producer and innovator in the highly lucrative Nevada market. By focusing on the Nevada cannabis market, the company is committed to ensuring that they deliver results in the space and for their shareholders. In order to achieve this objective, Flower One is developing and producing a diverse range of products that they intend to sell through four channels: resell, wholesale, private and white label and retail.
In June 2019, the Company, having successfully completed the inaugural harvest of its flagship 455,000 square-foot greenhouse and production facility, the largest in the state, is now operating in a state of continuous harvest, for the cultivation and processing of high quality, hydroponic cannabis at scale. Housing over 100,000 plants in eight flower zones, per crop cycle, Flower One is now capable of producing 140,000 lbs (or 62,500 kg) of dry flower per year. Flower One also owns North Las Vegas Organics, a 25,000 square-foot indoor cultivation and production facility with nine grow rooms capable of cultivating a total of 4,500 plants per cycle.
Combined, the flagship greenhouse and production facility, and the North Las Vegas facility provide Flower One with 480,000 square feet of capacity for cannabis cultivation, processing, production and high-volume custom packaging of dry flower, pre-rolls, cannabis oils, distillates, concentrates, edibles, topicals and infused products. Flower One is fully licensed for medical marijuana cultivation and production, as well as recreational marijuana cultivation and production in the state of Nevada, has a genetic library of over 100 unique cannabis strains, and currently holds licensing agreements with their Brand Partners, Flyte Concentrates, Rapid-Dose Therapeutics’ Quick Strip (CSE:DOSE), Old Pal, Palms, HUXTON, CannAmerica Brands (CSE:CANA,OTCQB:CNNXF), Grenco Science (G Pen), and The Medicine Cabinet. By way of its cannabis production facility and growing portfolio of Brand Partners, Flower One is well positioned to meet the demands of the Nevada cannabis market, by delivering a reliable, consistent supply of seed-to-retail-ready, custom-packaged product.
Flower One’s management team has over 15 years of experience in cultivation experience. Collectively, the team has built, owns and operates over 11 million square feet of commercial greenhouse operations in North America. The team is headed by President and CEO Ken Villazor, who has held numerous senior positions in the pharmaceutical industry and has the experience required to navigate the highly-regulated cannabis industry in Nevada.
- Nevada receives between 42 and 55 million tourists each year and is home to approximately three million people, creating a large market.
- Well-regulated cannabis market creates barrier of entry for out of state cannabis companies.
- Four-pronged business model based on resale, wholesale, private and white label and retail solutions.
- Leading cultivator and producer in the state of Nevada.
- Operates Nevada’s largest high-tech commercial-scale greenhouse, with a 400,000 square-foot greenhouse and 55,000 square-foot production facility.
- Owns North Las Vegas Organics, a 25,000 square-foot indoor cultivation and production facility in North Las Vegas.
- Greenhouse has commenced an expected ongoing harvest – averaging 10,000 high-quality, hydroponically-grown cannabis plants per zone – and is now capable of producing 140,000 lbs (or 62,500 kg) of dry flower per year.
- Licensed for cultivation and production of cannabis for the medical and recreational markets.
- Holds a genetic library of over 100 unique cannabis strains.
- Holds Brand Partner licensing agreements with Flyte Concentrates, Rapid-Dose Therapeutics’ Quick Strip, Old Pal, Palms, HUXTON, CannAmerica Brands, Grenco Science (G Pen), and The Medicine Cabinet.
- Management team has extensive experience in commercial cultivation.
Nevada’s Cannabis Market
Nevada offers investors and operators a significant opportunity in the state’s legalized cannabis market. In 2017, Nevada had 42.2 million tourists visit Las Vegas, making the city a popular tourist destination and is also home to 2.9 million people, creating a substantial cannabis market.
In addition to its substantial market size, Nevada also has well-regulated market with controlled licensing, making it difficult for out-of-state companies to move into the market. Currently, there are approximately 280 licenses across the supply chain in Nevada and there are five licenses to choose from, with no limits on cultivation or production for license holders. However, there are restrictions on who can apply and when. These regulations ensure that the state is protecting itself from being over-saturated with cannabis operations.
Flower One’s Focused Business Model
Flower One is focused on developing and producing a wide variety of cannabis products for Nevada’s medical and recreational cannabis markets. The company will be providing its products through four channels: resale, wholesale, private and white label and retail.
Each channel provides numerous benefits for Flower One and their third-party partners. By selling directly to Nevada’s dispensaries, Flower One can create a presence in over 60 dispensaries across the state. Additionally, the company will be offering a variety of unbranded wholesale products, including trim, oil, distillates and dry flower to existing production and retail license holders and out-of-state brands looking to enter the market. Finally, Flower One will be establishing wholly-owned retail locations throughout the state.
Flower One owns and operates the largest greenhouse in North Las Vegas for the cultivation and processing of high quality, hydroponic cannabis at scale. Since embarking on the conversion of its 400,000 square-foot facility in May 2018, more than 138,000 hours of renovation and construction work have been dedicated to converting Nevada’s largest, state-of-the-art cannabis cultivation and production facility. Flower One is now equipped to provide seed-to-retail-ready product that is custom packaged and delivered to retail with a commitment to consistent, reliable, high-volume delivery. The facility is licensed for the cultivation and production of both medical and recreational cannabis.
With the greenhouse now 100 per cent canopied, Flower One has commenced an expected ongoing harvest, averaging 10,000 high-quality, hydroponically-grown cannabis plants per zone. Housing over 100,000 plants in eight flower zones, per crop cycle, Flower One is now capable of producing 140,000 lbs (or 62,500 kg) of dry flower per year. This is in conjunction with the completion of the greenhouse’s adjoining 55,000 square-foot cannabis production facility for the cultivation, processing, production and high-volume custom-packaging of dry flower, pre-rolls, cannabis oils, distillates, concentrates, edibles, topicals and infused products. The production portion of the facility will use three primary extraction methods: carbon dioxide, ethanol and butane. Additionally, Flower One expects its facilities to be able to produce 20,000 liters of distillate, 50,000 liters of concentrates, 60,000 pounds of wax, 12 million auto-fill packages and 61 million pre-rolls annually. With their commercial-scale production capacity, Flower One is well positioned to meet the demands of the Nevada cannabis market.
In Q2 2019, Flower One completed its first harvest at its greenhouse facility.
In November, Flower One completed its acquisition of NLVO, giving them 100 per cent interest in NLVO’s property and all of the company’s assets, including a team of experienced cultivators and producers, and supply agreements with over 30 dispensaries in the state. NLVO has a fully-operational 25,000-square-foot cultivation and production facility in the city of North Las Vegas. The facility is fully licensed to grow and process cannabis for the medical and recreational markets in Nevada. NLVO has nine grow rooms which are capable of cultivating 4,500 plants per cycle.
In addition to acquiring the property, Flower One will also be expanding its license portfolio from four licenses to nine as NLVO has licenses for the cultivation and production of medical and recreational cannabis and a pending distribution license. NLVO also has developed a diverse, genetic library of over 100 cannabis strains. NLVO will also be able to provide Flower One with plant material and access to a well-branded cannabis product line that includes packaged flower, oils, concentrates, disposable vape pens, topicals and lip balms.
Brand Partnerships and Licensing Agreements
Flower One’s business model is focused on leveraging the scale of its cultivation and production capabilities to become a leading brand-fulfillment partner in Nevada. To this aim, Flower One is committed to delivering turnkey solutions and superior quality to its brand partners. The Company provides seed-to-retail-ready, custom-packaged products, delivered to Nevada’s cannabis consumers by way of Flower One’s growing portfolio of Brand and Retail Partners.
Flower One has entered into a brand partnership with Rapid-Dose Therapeutics (RDT), a Canadian biotechnology company that provides innovative, proprietary drug delivery technologies designed to improve outcomes and quality of life. Under the terms of the agreement, Flower One has been granted a license to manufacture, distribute and sell RDT’s QuickStrip, an oral drug delivery system, in Nevada.
Flower One has entered a licensing agreement and brand partnership with Flyte Concentrates, a premium cannabis distillate and delivery system brand. As per the agreement, Flower One is licensed to manufacture, distribute and sell two signature cannabis products from Flyte to all 130 cannabis retailers in Nevada.
Flyte is known for its two product lines: FlytePen and JetPack. FlytePen is a slim distillate vaporizer system capable of rapidly vaporizing the thickest and most purified cannabis oils. Flyte’s JetPacks are single-dose liquid THC or CBD shots that can be added to any hot or cold beverage.
Flower One has signed a licensing agreement and brand partnership with the popular California lifestyle brand, Old Pal. Flower One is licensed to produce, manufacture and distribute the entire Old Pal product line within California. Old Pal primarily sells pure, dried flower and is the lowest cost provider of legal cannabis in California.
Flower One has signed a licensing agreement and brand partnership with Palms, a California-based, experience-driven cannabis brand known for its high-quality pre-rolls. Under the terms of the agreement, Flower One will manufacture, distribute and sell Palms’ products throughout Nevada.
Flower One has signed a licensing agreement and brand partnership with HUXTON, an Arizona-based lifestyle cannabis brand known for its curated, consistent and multi-strain blended products. Flower One will manufacture, distribute and sell HUXTON’s products throughout Nevada.
HUXTON intends to release three product series in Nevada: HIFI, RISE and ZEN. The company intends to release a line of pre-rolls and vape pens that are branded towards the experience they will offer consumers.
Flower One has signed a long-term licensing agreement and brand partnership with CannAmerica Brands, a Colorado-based cannabis brand that was founded by a marine veteran. The company is known for its line of top-tier cannabis gummies and edibles which are currently available in three states.
Under the terms of the agreement, Flower One is licensed to manufacture, distribute and sell CannAmerica’s Fruit Juice Gummies and Super Soft Gummies in Nevada. This agreement marks Flower One’s entry into the cannabis edibles market.
CannAmerica intends to release new variations of its Fruit Juice Gummies and Super Soft Gummies that will features three flavor profiles: sweet, sour and a combination of sweet and sour. New, sleek packaging will also be unveiled with the new variations in order to drive brand consistency across all of CannAmerica’s markets.
Flower One has signed a long-term licensing and brand partnership with Greco Science, a leading California-based cannabis technology and hardware brand. Greco Science is known and responsible for engineering the G Pen line of cannabis vaporizers. As per the agreement, Flower One is licensed to sell, distribute and integrate G Pen’s proprietary hardware with new cannabis products, including products from the company’s brand partners.
The Medicine Cabinet
Flower One has signed a long-term licensing agreement with The Medicine Cabinet, a high-end, boutique-style recreational cannabis brand looking to enter the US cannabis market. The Medicine Cabinet intends to launch its Don Pablo premium pre-rolls, a selection of Bomb Girl’s edibles, pre-roll Slims, Baby J’s and a variety of Coffeeshop Classics dried flower in the Nevada market with Flower One’s help.
Flower One Management
Ken Villazor — President and CEO
Mr. Villazor is the President and CEO of Flower One Holdings. With more than 20 years of experience in Corporate Affairs including communications, public relations, business development, regulatory affairs, government relations, philanthropy and public policy, Mr. Villazor is now at the helm of Flower One. He has held numerous senior positions in the pharmaceutical industry, working extensively in government regulated aspects of commercial operations including formulary/market access, pricing compliance, price controls, manufacturing grants, regulatory approvals and shaping federal and provincial government policies. Mr. Villazor has been a director of Organic Garage Ltd. (TSXV:OG) since 2016 and serves on its Audit Committee, Governance Committee and Compensation Committee. He has worked for a number of large pharmaceutical companies including SmithKline Beecham, GlaxoSmithKline and Biovail Corporation as well as with the industry’s national trade association based in Ottawa. In addition, Mr. Villazor also spent more than a decade in the sports and entertainment industry including having served as an Alternate Governor and advisor to a National Hockey League franchise. His Board experience spans the academic sector, not-for-profit sector and publicly-traded companies.
Geoff Miachika — CFO
Chief Financial Officer, Mr. Miachika is a Chartered Professional Accountant with over a decade of experience in finance and accounting. Prior to joining Flower One, he was a Senior Manager with one of North America’s leading accounting and advisory firms where he primarily served Canadian and US public companies in audit, accounting advisory and securities engagements. Mr. Miachika has extensive experience working with clients listed on the TSX, TSX-V, CSE, and the NYSE as well as regulatory and financial reporting experience in IFRS, US GAAP and US internal control certifications, accounting for mergers, acquisitions, dispositions and other shareholder related matters. Operationally, Mr. Miachika has also managed teams of professional resources in the execution of large scale global audits.
Warner Fong — Director
Warner Fong has over 25 years of experience in accounting and administration, with the past 14 years in a senior management role in the greenhouse industry, responsible for the reporting requirements of the business, including annual audit and reviewed quarter-end financial statements reporting, operations and capital budgeting, cash flow management, trade credit and developing internal control processes for new reporting entities. He has worked for private enterprises and large multinational, publicly-traded corporations in Canada and Europe with their head offices situated in Canada. He is a licensed CPA, CMA in Canada.
Amit Varma — Director
Amit Varma has over 17 years of experience in cross border commercial banking and corporate finance roles with some of the largest financial institutions in Canada as well senior management and executive roles with some of Canada’s largest agricultural companies. He has worked in both large private and public companies and has been responsible for sourcing, developing and maintaining new and existing relationships with strategic financial partners to ensure the long-term availability of adequate sources of capital, including equity and debt, required for the ongoing operations, trade finance, cash management, covenant compliance, planned capital expenditures and the funding of the company’s strategic initiatives, including possible mergers and acquisitions. Throughout his career in both the private and public sectors, he has successfully delivered several billion dollars in operating loans, term debt, subordinated debt and equity financing.
David Wesley — Director
David Wesley has a decade of experience in the development, implementation and operational handover of some of the largest commercial greenhouse operations in North America. He has delivered over $400 million dollars of agricultural, office, industrial and other green field construction. Wesley has extensive multinational experience leading development efforts and regulatory compliance from the local city level to federal agencies. He has experience in both private company and advisory boards. He holds a Masters Degree in Business Administration in Executive Management with a specialization in Management Consulting, a Masters Certificate in Project Management, and Certificate in Business Administration.
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