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WeedMD

TSXV:WMD

First Canadian Licensed Cannabis Producer Focused on Long-Term Care

Press Releases

Overview

WeedMD Inc. (TSXV:WMD) is leveraging its well-established relationships and experience in the long-term care and senior living industry to become the leading cannabis provider to this overlooked and valuable market segment. The company is a licensed producer under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR).

WeedMD’s current operations is located in Aylmer, Ontario and consist of a 26,000-square foot, scalable production facility with 14,000 square feet under lights. WeedMD owns one of the most extensive genetic libraries in the Canadian medical cannabis sector, and plans to develop some of the highest quality THC and CBD strains in the market. The facility is currently in full operation and medical-grade cannabis inventory is ready for sale.

In November 2017, WeedMD launched a major production expansion by leasing part of a 600,000 square-foot state-of-the-art greenhouse facility located in Strathroy, Ontario, 30 kilometers away from London. To date, the company has initially leased 217,800 square feet of the facility, with an option to expand into the remaining footage at its own discretion. This initial expansion is expected to increase WeedMD’s annual production from 1,200 kilograms to more than 20,000 kilograms.

In December 2017, WeedMD received its Health Canada license to begin selling cannabis oil. This was an amendment to the oil production license it received in June 2017. The company has developed two distinct cannabis oil brands, Axis™ and Entourage™ cannabis oils which will be released for sale via the Company’s website in early 2018.

WeedMD’s management team collectively has over 100 years of experience in the public sector holding senior management and ownership roles within the long-term care and senior living industry. The company’s CEO Bruce Scully has had an extensive career as a long-term care facility executive for both public and private companies. He has played a leading role in the success of 15 large government-regulated start-up companies.

Company Highlights

  • Licensed Producer under Health Canada’s ACMPR
  • 26,000 sq. ft. facility on 4+ acres; scalable to over 220,000 sq. ft. with option on neighboring 4 acres with annual production capacity of 1,200 kilograms
  • Expanded production into 217,800 square feet of leased greenhouse space with option to increase to 600,000
  • Initial lease expected to grow production to 21,000 kilograms per year
  • Secured license from Health Canada for sale of cannabis oil
  • Strong relationships with key groups and thought leaders in the long-term care industry (Chartwell Retirement, Sienna Senior Living, Revera and Jarlette), and specialty pharmacy groups like MediSystem and Classic Care Medical Pharmacies
  • includes seasoned cultivators with years of cultivation and extraction experience under Health Canada regulations
  • Comprehensive library of proven, world-class strains

 Strategic Partnerships: Senior Care and Cannabis

According to Stats Canada, by 2036 seniors will account for 25 percent of the Canadian population, driven by a 3.5 percent rate of population growth among seniors—four-fold the rate for the broader population. The Canadian Institute for Health Information reports that 460,000 Canadian seniors were residing in long-term care facilities in 2012. That figure is expected to be reach nearly 1 million by 2031.

WeedMD management believes senior patients represent a significantly higher value market segment than typical ACMPR patients. This is due in large part to consistent treatment schedules and the cost-effective nature of patient acquisition and servicing associated with long-term care facilities.

WeedMD’s comprehensive medical cannabis platform is specifically designed for symptom management and the improved quality of life for seniors. A vast majority (83 percent) of seniors in long-term care centers are living with two or more chronic conditions, reports Stats Canada; while 60 percent are taking 10 or more medications per day. Unsurprisingly, the rate of opioid use is 16 percent—higher than any other segment of the population.

This simultaneous use of multiple drugs, or polypharmacy, is not only burdensome to the health care system, but also deleterious to patient health and quality of life. “Based on our decades of experience in senior care, WeedMD management’s goal is to provide safe and effective alternatives to symptom management for seniors,” said CEO Bruce Dawson-Scully.

In Canada, seniors are the fastest-growing demographic in medical cannabis. Multiple studies show that cannabis can reduce reliance on certain medications which have negative side effects, contradictions and the potential for addictions. For many of the common diseases and ailments afflicting seniors, pharmaceutical-grade cannabis is a safe alternative to treating symptoms.

  • Reduces and relieves pain (e.g., arthritis and inflammation)
  • Relaxes muscle spasms (e.g., Parkinson’s disease and multiple sclerosis)
  • Calms anxiety (e.g., stress and cognitive impairment)
  • Stimulates appetite to improve nutrition
  • Promotes better sleep
  • Aids in opioid withdrawal

 WeedMD Growth Strategy

As part of WeedMD’s growth strategy, the company has recently entered into a lease agreement with Perfect Pick Farms Ltd, under which the company has initially leased 217,800 square feet of a 600,000-square-foot greenhouse facility. The company also has the option to expand into the entire facility at its discretion. This initial lease is expected to increase WeedMD’s annual production from 1,500 kilograms to 21,000 kilograms and an expansion into the full square footage would represent an annual production of 50,000 kilograms.

WeedMD is currently in the process of retrofitting the state-of-the-art facility at a cost of less than $70 per square foot, among the lowest in in the industry. The company expects to produce its first harvest in June 2018. As the leased property is just 60 kilometers away from WeedMD’s Aylmer facility, the company can readily provide the materials and plants necessary to kick off cultivation in the near term.

In December 2017, WeedMD announced the receipt of Health Canada’s license to sell cannabis oils. This was an amendment to the previous license for cannabis oil production received in June 2017. As such, the company is now able to sell its two cannabis oil brands Axis™ for the seniors’ market, and Entourage™ for the general patient population.

“After receiving our license to produce cannabis oil just over five months ago, we are thrilled to confirm that we are now one of 21 Canadian LPs with licenses to produce and sell both dried flower and cannabis oil,” said WeedMD CEO Bruce Dawson-Scully. “Cannabis oil is in high demand, and we’ve taken the time to develop specific formulations to address the medicinal market as well as our seniors market niche including long-term care and assisted living.”

 Growth of the Market

projected-acmpr

 

On average, each of these patients orders 1 gram per day. Health Canada data shows that sales of dried flower and cannabis oil by ACMPR licensed producers is increasing month-over-month at an average rate of 10 percent.

historical-acmpr

Another major driver of growth expectations in the Canadian cannabis sector is the pending legalization of marijuana for recreational use. In April 2017, Prime Minister Justin Trudeau’s Liberal government tabled a bill to legalize recreational marijuana by July 1, 2018.

Analysts at VII Capital estimate that by 2024, the medical marijuana market in Canada will reach $3 billion in annual sales alongside a projected $6 billion in annual sales from the recreational market.

legal-retail-market

Further impacting market fundamentals is the projected supply shortage as current LP production capacity is far from matching the expected demand levels. Deloitte’s recent report, titled “Recreational Marijuana: Insights and Opportunities”, projects that satisfying the recreational cannabis market will require 600,000 kilograms of marijuana production annually, which is far more than the current capacity of the 43 existing LPs under the ACMPR.

Management

Michael Kraft — Chairman of the Board

Michael Kraft has 25 years of experience in sales & marketing, business & corporate development and finance. He is the Founder of Buckingham Group Limited, a privately-owned merchant bank providing capital formation strategy and financing to private and public emerging growth companies.

Bruce Scully — Chief Executive Officer

Bruce Scully has 22 years of senior management experience in the Long-Term Care industry for both private and public companies, most recently for Leisureworld Senior Care Corporation. Scully is an expert in management and government relations having led 15 large government-regulated start-ups in the long-term care and retirement industry.

Keith Merker — Chief Financial Officer

Keith Merker has 15 years’ experience as a finance professional and hold the Chartered Financial Analyst designation. He has extensive experience working with emerging-growth public and private companies in corporate finance, accounting and operations.

Dr. Luc Duchesne — Chief Scientific Officer

Dr. Luc Duchesne holds a PhD in plant biochemistry and has published 85 peer-reviewed scientific articles and books. He enjoys 30 years’ experience in the issues associated with the production and commercialization of natural products. He has taught as an adjunct professor in eight universities and has acted on the editorial boards of scientific journals and has received multiple science and business awards including the 5NR Award for Leaders in Sustainability. He is a founding director of Autism Canada Foundation. He brings a unique understanding of regulatory compliance, experimental research and production. Dr. Duchesne has worked as a research scientist and/or senior person in charge on a broad range of aspects of QA and GPP in various environments that are similar to the production of medical cannabis per the ACMPR rules.

Rick Moscone — Director

Rick Moscone is a Partner at Fogler, Rubinoff LLP and represents several public companies on the TSX and TSXV. He obtained his LL.B from Queens University and an MBA from Schulich School of Business.

Gail Peach — Director

Gail Peach has 25 years of senior executive experience in the public, private and not-for-profit sectors. Peach is a former Associate Deputy Minister, Economic Development and Trade and Assistant Deputy Minister of Health.

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