Primo Nutraceuticals

Providing Turnkey Infrastructure Solutions to Cannabis Producers

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

Overview

Primo Nutraceuticals Inc. (CSE:PRMO,FWB:8BV) provides infrastructure and seed-to-sale services to licensed tenant cannabis growers in Washington state. Many cannabis companies face challenges as they set up their business, such as high capital costs and a lack of access to traditional funding. Primo Nutraceuticals provides these companies access to cultivation facilities, as well as ancillary services, such as recycling, soil remediation, equipment leases, property management, consulting and advisory services and yield optimization technology.

At the core of its business model, Primo Nutraceuticals owns a four-acre property in the Okanogan Valley in Washington state. The company has developed a 10,000-square-foot greenhouse on the property, which has been leased to a tenant grower. Primo Nutraceuticals is currently building out two additional 10,000-square-foot greenhouses and intends to expand its land package by at least six acres.

Primo Nutraceuticals has also secured senior water rights for the property, providing the company with an ample water supply for its operations. Once established in Washington, the company intends to penetrate the Canadian cannabis market and to expand into other legalized states with its turnkey solutions.

Aside from the company’s turnkey solutions model, Primo Nutraceuticals has also entered the US hemp market in Oregon. The company’s subsidiary, Worm Casting Farms Inc., owns a hemp production and processing license along with 10 acres of farmland. Primo Nutraceuticals intends to build a 5,000-square-foot extraction facility on the property. The facility is expected to be operational by early 2020.

Primo Nutraceuticals is also developing a line of premium products and consumer packaged goods in order to become a leader in the international cannabis supply market. To date, the company has partnered with the Thrive Wellness brand to bring premium hemp and natural health products to North America and has acquired a proprietary CBD-blended tincture with three recipes for anxiety, energy and sleep. Primo Nutraceuticals is looking to add the Grounded CBD brand, which was featured on CBC’s “Dragons Den” to its brand portfolio.

Primo Nutraceuticals benefits from its partnership with the Marijuana Company of America (OTCMKTS:MCOA), which has provided the company with $1 million in financing to build out the company’s facilities in the Okanogan Valley.

Primo Nutraceuticals’ management team also provides the company with a wealth of experience. Primo Nutraceuticals President Amandip Jagpal has worked with Cannabis Science Inc. (OTCMKTS:CBIS), a cannabis biotech company based in California for over 10 years and Director Richard Cindric has worked with New Age Farm (CSE:NF), a turnkey growing infrastructure and services company for licensed growers and processors. Additionally, management notably owns 95 percent of the company’s shares.

Primo Nutraceuticals Company Highlights

  • Turnkey infrastructure solutions for cannabis producers.
  • Primo Nutraceuticals provides seed-to-sale and ancillary services for its tenants.
  • Option to purchase an additional six acres of prime growing land in the Okanogan Valley.
  • Tenant already in place in fully constructed 10,000-square-foot growing facility.
  • Primo Nutraceuticals is a senior water rights holder on its property in Washington.
  • Potential expansion into the hemp industry.
  • Potential expansion into other states and the Canadian cannabis market.
  • Partnership with MCOA in place with $1 million in financing received so far.
  • Management notably holds 95 percent of the company shares.

The Market

According to an article by ArcView Research, the legal cannabis market is projected to reach $23.4 billion by 2022. This can be achieved in part through the emergence of luxury and craft cannabis brands that are bolstered by advances in plant genetics. This is expected to help normalize and standardize products as producers strive towards maintaining pharmaceutical-grade products.

The emergence of new markets as more countries from across the globe legalize cannabis use is also expected to contribute to the growth of the market. Experts are also predicting a boom in the ancillary businesses associated with the industry as well as the growth of cannabis and CBD wellness products.

Despite the federal stance on cannabis in the US, the cannabis market is continuing to grow and expand, creating a wealth of opportunities for those looking to enter into the market. This was further confirmed when Thomas Jefferson University opened the first US research institution that would solely focus on researching cannabis.

states where marijuana is legal

Cannabis in Washington State

In 2017, the Washington cannabis market saw approximately 650,000 recreational cannabis users that resulted in approximately $1.48 billion in annual sales. Cannabis sales consist of 59 percent of dried flower, 21 percent concentrates, nine percent edibles and 10 percent pre-rolls.

Primo Nutraceuticals’ Turnkey Growing Facilities

Primo Nutraceuticals’ business model revolves around its turnkey property model. Many cannabis companies face high capital costs to establish a viable commercial farm operation and face limited funding options as most traditional models are unwilling to do business with cannabis companies due to federal legislation. Experts estimate that Washington state needs $679 million in infrastructure and $27 billion to be able to address the full legal market. As a way to combat this problem, Primo Nutraceuticals has been setting up greenhouses and outdoor growing facilities at its Oroville property to lease to cannabis companies.

Aside from providing cannabis companies with a space to work in, Primo Nutraceuticals also provides specific services, such as recycling, soil remediation and equipment leases, property management services, a consulting and advisory service and yield optimization technology services. The company also offers the services of its master grower, who has competed and placed in relevant industry competitions.

Moving forward, Primo Nutraceuticals is also looking at deploying its turnkey model in other US states and in the Canadian cannabis market as well.

Primo Nutraceuticals Flowchart

Oroville, Washington Greenhouse Campus

Primo Nutraceuticals has secured four acres of farmland in the Okanogan Valley near Oroville, Washington. The Okanogan Valley is well-known for its ability to produce high-value fruits and vegetables as well as cannabis crops.

The company has built an I-502-compliant, 10,000-square-foot greenhouse that has been optimized for low-carbon and sustainable operations. The greenhouse has been leased out to a Tier 3 I-502 production and processing license holder with established relationships with 13 dispensaries in the state. The grower has the ability to produce on up to 30,000 square feet of canopy space.

The tenant grower received its final production approval from the Washington State Liquor Control Board to commence operations in September 2019. The tenant is currently preparing for occupancy and expects to plant a 20,000-square-foot outdoor crop in 2020. In the meantime, the tenant is going to focus on the processing of cannabis for its wholesale market contacts.

Primo nutraceuticals field of green

Primo Nutraceuticals is building two additional 10,000-square-foot greenhouses that the company plans to lease out. The property can be expanded to eventually include a minimum of an additional six acres. The company plans to house up to 10 different licenses on the property.

primo nutraceuticals crop farming

 

Senior Water Rights

Primo Nutraceuticals is a 50 percent senior water right holder on the main stem of the Eden Valley aquifer and has access to two supplemental groundwater wells. Being a water right holder in Washington is a significant investment for the company. Not only does Primo Nutraceuticals have access to water, but the company can treat its water rights as if it was a piece of real estate subject to the appropriate regulations.

Water rights in Washington are judicially decreed and senior water rights holders are entitled to access water before junior water rights holders. This makes senior rights holders more consistent, reliable and valuable than junior rights.

Oregon Hemp Farm

Aside from its work in the cannabis space, Primo Nutraceuticals has also entered the hemp industry. It easier to extract CBD from hemp plants and it is more cost-effective to produce. To this aim, the company has entered into a financing and profit-sharing agreement with Worm Casting.

Worm Casting owns a hemp production and processing license along with 10 acres of farmland. The company intends to build a 5,000-square-foot facility that is equipped with full-spectrum extraction equipment for the production of CBD distillate and isolate. Primo Nutraceuticals expects the facility to be operational by early 2020. To date, the foundation for the drying facility has been built and negotiations are underway for a world-class processing facility and state-of-the-art lab.

Worm Casting is currently in the midst of harvesting its hemp crop for the year. Upon the completion of the harvest, the company’s co-packaging agreement is expected to be fulfilled. Primo Nutraceuticals also has an agreement with USA Hemp for hemp processing that is expected to commence in the near term.

Primo Nutraceuticals’ CBD Products and Brands

To combat commoditization in the cannabis industry, Primo Nutraceuticals has differentiated itself by developing premium products and consumer packaged goods. The company is focused on bridging the gap between a brand and its target audience by ensuring quality and fair pricing.

Island Biopharma

Primo Nutraceuticals has signed an LOI to acquire Island Biopharma Inc. and its line of CBD products, which includes a proprietary CBD-blended tincture with three recipes for anxiety, energy and sleep. Island Biopharma creates products that use the highest-quality bio-active ingredients and oil extraction methods to ensure that the essence of the cannabis plant remains intact.

Thrive Wellness

Primo Nutraceuticals has signed a definitive agreement to acquire a 39 percent interest in Thrive Nutrition Products Ltd., the distributor of the Thrive Wellness brand. The Thrive Wellness brand is comprised of hemp and CBD-focused natural health products that are distributed in Canada and the US.

Thrive specializes in the development, marketing and distribution of cannabis products through its national distribution network. The company made C$2.5 million in sales through its retail distribution, e-commerce website and through the company’s relationship with Nutrition House, Canada’s leading natural health product franchise.

primo nutraceuticals cbd tinctures

Grounded CBD

With the aim of adding to the company’s brand portfolio, Primo Nutraceuticals signed an LOI to acquire Grind Bar Nutrition Products Ltd. Grind Bar makes CBD-infused performance nutrition bars that are made with organic ingredients and cannabis-focused natural health products under the Grounded CBD brand. Grind Bar and its Grounded CBD brand were featured on the CBC show “Dragons Den.”

Primo Nutraceuticals’ Strategic Partnerships and Agreements

MCOA

Primo Nutraceuticals has formed a joint venture partnership with the MCOA, a cannabis company focused on selling hemp and conducting hemp-based R&D, as well as on providing leasing opportunities to licensed cannabis growers and expanding into the ancillary businesses associated with the cannabis industry. MCOA’s management team is comprised of industry veterans that provide their expertise and insights along with their $1 million contribution to Primo Nutraceuticals. Primo Nutraceuticals has used the money to build out its facilities and greenhouses in Washington.

Project 470

To enter the Canadian cannabis market, Primo Nutraceuticals signed a binding LOI to create a joint venture agreement with Project 470 Acres Ltd. to construct a 5,500-square-foot hemp and CBD processing facility, which can be expanded to 10,000 square feet as required.

The facility is to be located in Aberdeen, Saskatchewan, which is known as the heart of Canada’s second-largest hemp producing area. Aberdeen is centrally located between the Alberta and Manitoba hemp markets, providing Primo Nutraceuticals with reduced shipping and production costs. Project 470 is in the process of obtaining the necessary permits.

Co-Packaging Agreement

In July 2019, Primo Nutraceuticals signed a contract production agreement with a co-packing company to produce and process Primo Nutraceuticals’ line of CBD-derived products. The co-packing company is fully-licensed to co-pack and bottle THC and CBD-infused products at its GMP-compliant facility.

Primo Nutraceuticals’ Management Team

Amandip (Andy) Jagpal, B.Sc. (Biology) — President

Amandip Jagpal holds a Bachelor of Science from the University of British Columbia. He has taken numerous courses in Business Management. He was a research assistant with the Dean of Plant Science and with Agriculture Canada. He was also involved in establishing an integrated pest management program with a large agriculture supply corporation.

As an entrepreneur, he formerly held the position of President of Alliance Vancouver, an executive office business center which helps incubate new companies as well as assist existing companies with their back-end business management, including telephone answering, word processing, telecom management, accounting, property management and staffing. He is also involved with Intrinsic Capital Corp., an investment group focused on taking unique and financially viable projects public, providing access to venture capital and helps companies with mergers and acquisitions.

Richard Cindric — Director

Richard Cindric brings with him many years of experience in entrepreneurship, corporate finance, sales and marketing for public and private companies. He has significant experience in venture capital, early-stage equity and debt financings and regulatory compliance in the cannabis industry. He has many key contacts and invaluable relationships in the cannabis industry.

As an investor relations expert, he has helped raise substantial funds in private and public financings for start-ups and early growth-oriented companies. As an entrepreneur, he also is President of Green Venture Capital Corporation, a real estate investment company.

TJ Singh, CPA, CGA — Director

Teja Singh has worked as a manager at PricewaterhouseCoopers LLP where his duties included accounting, tax and business advisory services for private companies in addition to tax structuring and planning for real-estate development companies.

He has also worked as a Tax Manager for KPMG LLP and was charged with handling corporate tax compliance and SRED filings for public and private companies, merger and acquisition transaction support and pre-IPO corporate restructuring and tax planning. Additionally, he helped clients at KPMG with international tax planning and compliance for public and private companies. Currently, Singh is a Partner in Goldtree Capital Partners LP, a real estate investment firm.


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