James E. Wagner Cultivation

Applying Aeroponics Technology to Cannabis Cultivation

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Overview

James E. Wagner Cultivation (JWC) (TSXV:JWCA) is a cannabis company implementing a proprietary growing process that is based on aeroponic technology originally designed by Richard Stoner in the 1980’s and further researched by NASA. JWC’s proprietary methodology, GrowthSTORM™, is being deployed in a 15,000-square-foot retrofitted facility in Kitchener, Ontario and the company is in the process of constructing an additional 345,000 square feet nearby. Once the second facility is complete in late 2019, JWC will be the largest aeroponics cultivator of any crop in the world.

A process originally researched for the purpose of growing food in space, aeroponics is a method in which plants are grown in a controlled air environment without the use of soil. In these environments, there is also the opportunity for targeted nutrient administration, which drives optimal growth and enhanced concentration of cannabinoid content.

In developing its GrowthSTORM™ platform, the company is using state-of-the-art HVAC equipment to research the efficacy of environmental control units. These units provide optimized growth potential and harvest yield by allowing producers to control the humidity and temperature within a given grow environment. JWC has received pre-approval for the saveONenergy Incentive Program, administered through Kitchener-Wilmot Hydro Inc. This program could reimburse up to 50% of JWC’s process HVAC infrastructure costs for the first phase of construction at the JWC 2 facility.

JWC has also collaborated with the largest publicly-traded cannabis producer, Canopy Growth (TSX:WEED), as well as its investment-focused subsidiary, Canopy Rivers. Under this partnership, JWC has access to a wealth of genetic material, as well as established distribution, sales, operations, and quality assurance infrastructure.

Moving forward, as part of a long-term goal to provide the global cannabis industry with leading cultivation technology, JWC intends to establish licensing agreements for its technology and infrastructure to existing licensed producers.

JWC is managed as a family business and run by a family with generations of cannabis and agricultural cultivation experience spanning to before prohibition. When it comes to contemporary regulations, the family has been cultivating cannabis since 2008, when CEO Nathan Woodworth received a cultivation licence under the Medical Marijuana Access Regulations (MMAR).

Company Highlights

  • On the way to becoming the largest aeroponics cultivator of any crop in the world
  • Proprietary GrowthSTORM™ methodology enhances cannabinoid concentration and reduces exposure to insects or disease
  • Strategic relationship with Canopy Growth provides access to global genetics database and established distribution and sales infrastructure
  • Access to state-of-the-art HVAC equipment to optimize environmental growing conditions
  • Collaborations have been formed with MediPharm Labs and Conestoga College.
  • Pre-approval for saveONenergy incentive for the implementation of energy-efficient HVAC equipment
  • Cannabis oil production licence from Health Canada.
  • Lease options for two retail locations in Ontario.
  • Management team led by family with three generations of agricultural and cannabis cultivation experience
  • 40 percent of shares held by management, friends and family

JWC GrowthStorm™ Growing Methodology

The JWC founders have been working for years on developing a proprietary cultivation method. In 2017, having researched the innovative technology, the company developed a four-step growth methodology that uses aeroponics to develop high-quality, cost-effective crops.

An innovative, cost-effective process

GrowthSTORM™ has four steps, which include the following: cloning; the aeroponics production platform; trimming and drying; and analytics and automation.

When placed in the innovative aeroponic production platform, plant roots hang within the enclosure in a controlled room. In this environment, JWC can establish consistent growing conditions as they have the ability to control the climate, lighting and the provision of a balanced mix of air and water to the root zone, as well as targeted nutrient administration. The controlled environment also provides the opportunity for conducting accurate pharmaceutical-grade controls.

For trimming and drying, the company has also designed a machine-based system that produces a finished medicine in an efficient manner. JWC also uses a cutting-edge drying system with separate individually-controlled chambers.

The company also makes use of the GrowthSTORM Management™ software platform that performs automated collection and monitoring, while also producing real-time analytics. Using this system, JWC can observe nutrient levels and conduct real-time tracking of production progress.

Benefits

When deployed, this methodology delivers a higher potency product. In fact, JWC is seeing values of up to 25 percent cannabinoid product in their plants versus the 20 percent value that is seen across the industry. It also allows for perpetual harvesting not controlled by seasons, encouraging greater yields, and its controlled environments reduces the risk of exposure to insects and diseases.

In addition, as the system is highly automated, GrowthSTORM™ requires less manual labour than other operations, thus reducing its cost further. The entire process has been designed to be scalable, allowing for rapid expansion across JWC’s planned facilities.

Production Facilities

JWC is currently based in Kitchener, Ontario and measures 15,000 square feet with a production rate of 1,500 kilograms per year. It holds seven grow rooms in which JWC has been cultivating seven strains, three of which are currently available for patient orders.

The company is currently in the process of retrofitting and constructing a second facility in Kitchener, which will encompass a total 345,000 square feet and raise the company’s annual production rate to a targeted total of 30,000 kilograms. The second facility will have as many as 140 grow rooms, and the company will continue to expand its genetic offerings at this site. Once the second facility is complete and operational, JWC will be the largest aeroponics cultivator of any crop in the world.

 

Retail Locations

JWC has options to lease two retail properties in Waterloo Region, Ontario. Once developed under the existing Ontario regulations, JWC’s retail model will offer its customers a full-spectrum of cannabis products, including dried cannabis and cannabis oil products. The company will also be curating a line of high-quality cannabis products from other licensed producers to be sold at their retail properties.

Strategic Partnerships

JWC’s revenue and distribution model is founded on developing strategic relationships for wholesale and retail distribution of its products, as well as licensing agreements for the GrowthSTORM™ technology and infrastructure. As such, the company has already entered into strategic relationships with a number of players in the field, which will also play a role in expanding the reach of the company’s brand.

Canopy Growth Corporation

As part of its growth strategy, JWC has entered into a strategic partnership with Canopy Growth Corporation, the largest publicly-traded cannabis producer, and with its investment-focused subsidiary, Canopy Rivers Corporation.

As part of this agreement, JWC has access to a world-wide database of high-quality genetics, industrial-scale oil extraction infrastructure, as well as an established product quality assurance process. The company also has access to CraftGrow, an online store dedicated to providing shipments to partners quickly, as well as the Tweed Main Street online marketplace, which hosts Canopy’s operational, distribution, marketing and sales infrastructure.

Environmental Control Research Collaboration

JWC has entered into a research study with an industry leader, HVAC equipment manufacturer. As part of this collaboration—the first of its kind—the companies are working together to evaluate the produced horticultural environments from the perspective of nutrient uptake and its role in optimizing growth potential and harvest yield.

These units are the only horticultural environmental control unit in the industry that can provide independent humidity and temperature control for optimal growing conditions, driving quality and experience.

In September 2018, JWC received pre-approval for their saveONenergy incentive program, which optimizes climate control systems to increase yield and reduce a plant’s lifecycle, all while creating an environmentally-conscious and energy-efficient production system. JWC has installed these HVAC units at its pilot facility and is installing the systems in their JWC 2 facility.

To receive final approval, JWC is required to complete a 12-month measurement and verification period to ensure that the units are functioning at the projected level of energy-efficiency. If the units work as intended, JWC will be reimbursed for up to 50 percent of its HVAC infrastructure costs.

MediPharm Labs

JWC will be supplying MediPharm with dried cannabis which will then be used to create cannabis oil for a period of three years. MediPharm will then provide the cannabis oil to JWC or another approved licensed producer. MediPharm will charge JWC a processing fee for the cannabis produced.

Conestoga College

JWC has also entered into a collaborative research agreement with Conestoga College, a leader in polytechnic education, to further develop and streamline JWC’s existing state-of-the-art cultivation practices. The research and development will be funded by the Ontario Centers of Excellence Industry-Academic Research and Development grant. The goal of these projects will be to mitigate some of the costs associated with production and to further refine the company’s advanced cultivation practices.

The first project will focus on identifying specific aspects of the existing cultivation practice that could be further advanced with new technology. The R&D projects could also include the automation of existing systems, the implementation of virtual or augmented reality tools for training and oversight and the use of autonomous system as a way to supplement or replace existing procedures.

Management

Nathan Woodworth—President and CEO

Nathan Woodworth studied Philosophy at McMaster University, however his plans were disrupted by chronic intractable migraines. After pursuing a variety of treatments for several years, Nathan settled on medical cannabis as the most effective therapy. He began growing his own cannabis under the Medical Marijuana Access Regulations (MMAR) and with his family he founded a collective of patients and growers in Waterloo Region. In 2012, when the Marijuana for Medical Purposes Regulations (MMPR) was announced, he and his family decided to bring their passion and unique technology to the commercial production of cannabis. By 2013, they had founded James E. Wagner Cultivation Ltd. The years since have allowed him to develop his management skills by taking JWC from a start-up to a rapidly growing, technologically advanced producer of cannabis. He also sits on JWC’s Board of Directors.

Adam Woodworth—COO, QA Supervisor, Chief Cultivator

Adam Woodworth graduated from the University of Waterloo with an Honours BSc in Biology. He began growing medical cannabis under the Medical Marijuana Access Regulations (MMAR) and it was during this time that he decided to shift his focus; so together with his brother, he began experimenting with cultivation methods to perfect the production of cannabis. He brings extensive expertise in plant and microbiology, years of cultivation experience as a producer of medical cannabis under the Medical Marijuana Access Regulations (MMAR) and his certification in Good Laboratory Practices to his many roles at JWC. He works diligently with JWC’s production staff to ensure the continued delivery of clean, consistent cannabis and he continues to innovate JWC’s GrowthSTORM™ cultivation platform through ongoing analysis of production practices. In addition, he performs research that is critical to JWC’s strain development and production optimization.

Krysta Woodworth—Chief Administrative Officer

Krysta Woodworth graduated with Honours from the University of Waterloo where she earned a B.A in fine arts and a minor in psychology. Her intricate and analytical focus in her arts degree have contributed significantly to her role as CAO. She is responsible for all front-end operations of JWC, including cross-functional management and strategic headcount planning. She continues to drive the business forward with her unique approach to departmental management and organization. She is responsible for ensuring that the core functions of JWC are working cohesively and she is instrumental in defining, measuring and achieving JWC’s internal and external objectives.

Laura Foster—Chief Compliance Officer

Laura Foster first graduated from the University of Waterloo with a degree in psychology following which she pursued a formal certification in chef training at George Brown College. After her education was complete, she explored several avenues where she applied her same critical thinking, quick learning and unique approach to problem solving. In 2009, she decided to join the budding family business and quickly immersed herself in the Access to Cannabis for Medical Purposes Regulations (ACMPR). In her role as CCO, she applies her extensive knowledge of the ACMPR to ensure JWC’s compliance with the strict regulatory frameworks that govern the cannabis industry. She is dedicated to developing effective and comprehensive Standard Operating Procedures and she continues to be an asset as JWC navigates legislative changes in the cannabis industry. She also sits on JWC’s Board of Directors.

Dan Bexon—CIO

Dan Bexon attended McMaster University and studied Mathematics and Computer Science. During his career, he has held several roles in Information Technology or Information Security positions. He joined JWC in early 2017 as CIO and as part of his role he is responsible for implementing and supporting all external software systems to ensure proper integration with Standard Operating Procedures. He is also responsible for overseeing all aspects of network security and IT infrastructure. His experience with inventory control, systems administration and integration has proven invaluable towards tracking and monitoring the production and distribution at JWC.

James Den Ouden—CFO

James Den Ouden graduated from McMaster University with a degree in Economics. He then continued his education becoming a CPA/CMA while working for Manulife Financial, where he spent more than 22 years. He started as a junior accountant working on the Confederation Life acquisition and progressed through several roles with increasing responsibility including spending 5 months in Japan when Manulife Financial entered the country through a joint venture.

He was responsible for the Canadian Division expense management during the John Hancock Group and Maritime Life acquisition, before moving to the Corporate Division as Assistant Vice President of Corporate Division expenses. During this role, he was responsible for the company’s management reporting during the 2008 Financial Crisis, keeping senior leadership informed on the impacts to Manulife Financial’s businesses. He later became the Chief Financial Officer of Manulife Asset Management Ltd. and was then responsible for the financial management of the Canadian Investment Funds including being involved in the Standard Life acquisition and the launch of Manulife Financial’s first Exchange Traded Funds. He joined James E. Wagner Cultivation Ltd. as Chief Financial Officer in October of 2017.

William Werth—CTO

William Werth began his career in the military as a Combat Engineer, during which time he was awarded the Sacrifice Medal in recognition for his injuries sustained while deployed to Afghanistan in 2010. In 2013, after a medical release from the military, William decided to take his engineering skills and apply them to another area of focus; technology. After completing his education, he held positions in several technologies focused companies where he applied his innovative approaches to solving real-world, data-driven problems to develop programs and meet the needs of various clients. Since joining JWC, he has been responsible for overseeing all technological growth, including integration and optimization of the GrowthSTORM™ cultivation platform. He continues to strategically grow JWC’s position as a thought leader and influencer in the industry through his development of cutting-edge partnerships and high-tech advancements.

Nicole Werth—Director of Strategic Initiatives

Nicole Werth began her career at BlackBerry Inc., Research In Motion (RIM), while she was still studying at Cape Breton University. Prior to joining JWC, she held a variety of positions with BlackBerry and Sun Life Financial that have contributed to her ability to adapt to new environments, learn quickly and manage change effectively. She has an extensive project management background that lends her a keen eye for managing the details and performing risk assessments. As the leader of the Strategic Initiatives department she is responsible for managing JWC’s transformation to a global leader in the cannabis industry through organizational change, implementation of new strategies, promoting efficiencies and providing creative business solutions. In addition, she acts as the main point of contact for JWC’s 2nd facility expansion project.

Philip Armstrong—Board of Directors Member

Philip Armstrong has spent over 45 years in the financial service industry starting his career with Lloyds Bank in the United Kingdom. He emigrated to Canada in 1975 and since worked as a senior ‎executive for two Canadian Trust companies. In 1987, he became an investor, partner, CEO and member of the board of Altamira Investment Services Inc., an investment company with $15 billion of assets under management. Altamira was sold to National Bank in 2000. In 2003 he was a founder, CEO, and board member of Jovian Capital Corporation, a public company that invested in the asset and wealth management sectors. Jovian grew to oversee $13 billion in client assets and was sold to IA Insurance in 2013. He currently serves on the boards of Torrent Capital, Smart Employee Benefits and Lithium Energi Exploration Inc., all public companies. He is the Chair of Richardson GMP Family Office Oversight Committee. He is also a director of several other private companies. He has served as Chairman of the Investment Funds Institute of Canada and The Mutual Fund Dealer’s Association, an SRO. In addition, he served on the board of the Ireland Fund of Canada and the Canadian Opera Company. He holds a BA (Law) Hons. from the School of Law at Manchester Polytechnic, UK.

Ray Alarie—Board of Directors Member

Ray Alarie was founder & CEO of Paragon Engineering Limited from 1979 until acquired by Stantec Inc. in 1997. He served Stantec in senior executive capacities until retirement in 2006. He holds BASc and MASc degrees in Civil Engineering from the University of Waterloo. In 2000, he was recognized with Waterloo’s Engineering Alumni Achievement Medal. He received the ICD.D designation in 2005. Ray has served on many profit and non-profit Boards, including a US publicly traded company involved in industrial air handling, various engineering consultancies, and an IT company specializing in wireless printing. He has been the only Outside Director of a Toronto-based employee-owned Engineering Consultant in Toronto since 2015.

Peter Kampian, CPA, CA—Board of Directors Member

Peter Kampian is a Canadian Chartered Accountant and has a long track record as a financial executive with several Canadian public companies. He is currently the CFO of DionyMed Holdings Inc., a Canadian-based cannabis company operating a branding, distribution, and direct to consumer business in cannabis-legal US states. He also serves as the Audit Chair for Red Pine Exploration Inc. He was the Chief Financial Officer of Mettrum Health Corp., a Canadian public cannabis company, which was acquired by Canopy Growth Corporation in early 2017. Previously, he was involved with several start-up businesses in renewable energy including Threshold Power Trust, Riverbank Power Corporation, and Oneworld Energy Corporation.  Mr. Kampian was also the Chief Financial Officer of Algonquin Power Income Fund, currently trading as Algonquin Power and Utilities Corp., where he led and supported debt and equity capital raising.

 

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