WeedMD CFO Keith Merker (TSXV:WMD) believes that the strategic expansion initiative the company has made in leasing part of a 600,000 square-foot state-of-the-art greenhouse facility will be key to enhancing WeedMD’s position in the Canadian cannabis market.
In the article below, Merker discussed the positive impacts the newly leased facility will have on WeedMD’s cannabis production levels and how it will position the company amongst the highest echelons of Canadian licensed producers. Merker also highlighted the role of the management and cultivation teams in guiding WeedMD through licensing and bringing the company to its current position.
Below is a transcript of our interview with WeedMD CFO Keith Merker. It has been edited for clarity and brevity.
Investing News Network: Please provide our investor audience with an overview of WeedMD and its cannabis cultivation operations in Ontario, Canada.
WeedMD CFO Keith Merker: WeedMD was founded in late 2013 when the Marihuana for Medical Purposes Regulations (MMPR), the regulatory body at the time, rolled out a new commercial infrastructure for cannabis cultivation and distribution in Canada. Unfortunately, we were not amongst the first companies to be licensed under the program and we navigating three years of licensing endeavors before obtaining our license in April 2016.
Now, we are fully operational, producing roughly 1,200 kilograms per annum out of our facility near Aylmer, Ontario. The facility is two hours southwest of Toronto and half an hour from London, Ontario.
INN: What does the recently announced expansion strategy and lease of a large-scale greenhouse mean for WeedMD?
KM: Under our recently announced expansion strategy, we have leased—with the option to purchase—part of a 98-acre farm from Perfect Pick Farms that has 600,000 square feet of state-of-the-art, recently completed greenhouse facilities.
To begin with, WeedMD will be leasing just over five acres or 220,000 square feet, with which we will be able to cultivate 20,000 kilograms of cannabis per annum. We have the option to expand into the whole of the facility over time, but the initial square footage will provide us with significant amounts of quality product, which will allow us to go to market very quickly. We plan to be harvest ready for the recreational roll out next July.
INN: What are the next steps with regards to this new facility and how does that fit into the company’s long-term plans?
KM: We have the necessary approvals from Health Canada and that has allowed us to begin retrofitting the facility. Up until three weeks ago, there were tomatoes growing in the five acres, which we’ve had to clear. Now, cement is being poured on the floor and we are building roads outside. Our next step, which is currently underway, is to build out our security measures for the property so that we can be granted our cultivation license. We also plan to leverage our Aylmer facility—just a half hour away—to provide the starting materials necessary to kick-off cultivation.
The costs associated with retrofitting the property are quite low and are fully funded under the $15 million convertible debenture financing we completed earlier this month. We also have a number of warrants issued with last year’s financing that are currently being exercised. As such, we have plenty of money in the bank and more than enough to conduct the retrofit, start cultivation and complete our first harvest next year.
INN: How will the increase in production position WeedMD against its peers?
KM: We view this opportunity as vaulting WeedMD from being a low-to-mid-tier producer into the upper echelons of licensed producers in Canada in terms of capacity. We did this with a much lower market cap than our peers and, as such, had to come up with a creative plan to help position us favorably.
We have landed on that with the structure of our deal with Perfect Pick Farms, where we are leasing to begin with and are working with exceptionally cheap retrofit costs. When we do exercise our option to purchase the land, we can finance a good portion of that purchase price and we will also be renting out a portion of it to Perfect Pick Farms for $1 million a year.
INN: Savvy investors know strong management is key to a company’s success. Are there any executives you would like to highlight on your board and management team?
KM: We have put together a fantastic group both at the executive level and within our facility. We have a motivated team in Aylmer, which includes Nick Trueman, our production and cultivation manager, who is doing an amazing job of consistently growing quality, top-notch cannabis. It also includes Doug McKee, who looks after inventory management, IT management and packing and shipping. He’s the guardian of the vault, so to speak.
Beyond that, Bruce Dawson-Scully is our founder and CEO and he is doing a fantastic job running the show, making sure that we execute on the strategy and differentiation aspects of our company. We also have Dr. Luc Duchesne, who is our chief scientific officer and is known as a thought leader in the US with respect to quality assurance and the science behind cannabis. Like all of us, he wears many hats, and he has done a great job at ensuring that we are in compliance with regulations and in conducting outreach amongst the QA community. The team that has gotten us here thus far has done an exemplary job and we look forward to continuing that trend, feeding back to shareholder value. We’re not taking the foot off the gas now.
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Donation will benefit veteran-focused organizations and nonprofits, including all TruVet Program partners

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a United States -based leading medical cannabis company, announced today a donation for all TruVet Program partners year-to-date in honor of Veterans Day. A total of $15,000 representing a portion of the November proceeds from the Company’s limited-edition Freedom Pre-Roll product, will be shared among program partners, which are veteran-focused organizations andor nonprofits.

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Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Aurora Cannibas, Inc. (“Aurora” or the “Company”) (NYSE:ACB) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Aurora securities between February 13, 2020, and September 4, 2020, inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.comacb

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Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Aurora Cannibas, Inc. (“Aurora” or the “Company”) (NYSE:ACB) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Aurora securities between February 13, 2020, and September 4, 2020, inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.comacb

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Hill Street Beverage Company Inc. (TSXV: BEER) (“Hill Street” or the “Company”) reported its first quarter results for period ended Sept 30, 2020. A complete set of financial statements and Management’s Discussion & Analysis has been filed at www.sedar.com. All dollar figures are quoted in Canadian dollars.

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Signed LOI for CAD$23 million sale to Ionic provides shareholder value

Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce that it has received and signed a non-binding letter of intent dated November 30, 2020 with IONIC Brands Corp. (“Ionic”) for the proposed sale to Ionic of certain assets held by Lobe related to Cowlitz County Cannabis Cultivation Inc. (“Cowlitz”) (the “Transaction”). Cowlitz is one of the top five licensed cannabis producersprocessors located in Washington State.

The assets being sold to Ionic may include, but are not limited to, the assignment of all property leases relating exclusively to Cowlitz’s business, the assignment of Lobe’s option agreement to acquire all of the outstanding shares of Cowlitz, and the assignment of other contracts and rights related exclusively to Cowlitz including service contracts and equipment leases (the “Assets“).

The Transaction is subject to several closing conditions, including but not limited to: (i) satisfactory due diligence by both Ionic and Lobe; (ii) completion of a definitive agreement with binding terms and conditions for the Transaction, including finalization of the specific Assets that will be sold and certain Cowlitz assets that may be retained by Lobe; (iii) all respective directors and officers of Lobe and Ionic entering into support agreements for the Transaction; (iv) approval by the boards of directors of both Lobe and Ionic; (v) the completion of a share consolidation by Ionic on a minimum of one new Ionic common share for every four and a half (4.5) old Ionic common shares (the “Ionic Consolidation“); (vi) the conversion of all Ionic debentures (with principal amount of approximately CAD$14.7 million) into a secured equity or a similar instrument (“Debt Conversion“); (vii) completion of a concurrent financing by Ionic for gross proceeds of at least US$2 million (the “Ionic Concurrent Financing“); (viii) Ionic having all cease trade orders issued against it lifted(2); (ix) Ionic applying to the CSE for requalification and qualifying for listing and resumption of trading(2); and (x) the receipt of all required shareholder and regulatory approvals, including the approval of the CSE. Following the closing of the Transaction, Ionic’s board of directors is expected to be comprised of five (5) members and Lobe will have the right to appoint two (2) directors to the Ionic board.

The sale price for the Assets shall be a minimum of CAD$23 million, payable through the issuance of Ionic post-consolidation common shares (being approximately 49% of Ionic’s estimated $47 million capitalization post-restructuring (after giving effect to the Ionic Consolidation and Debt Conversion)), prior to giving effect to the Ionic Concurrent Financing. Following the closing of the Transaction, it is expected that the Lobe will own approximately 49% of Ionic’s common shares, on a post-consolidation and pre-Ionic Concurrent Financing basis. Ionic is expected to have a minimum total capitalization valuation of CAD$47 million, pre-Ionic Concurrent Financing.

As previously announced, Lobe has been pursuing strategic alternatives for Cowlitz, aimed at maximizing its value to the Company. Cowlitz reported over US$14.6 million in gross sales revenues for the nine month period ended September 30, 2020, according to data provided on reports to the Washington State Department of Revenues(1). Lobe generates revenues through licensing and leasing agreements in place with Cowlitz.

Ionic is listed on the Canadian Securities Exchange(2) (the “CSE“) (CSE: IONC) and is a growing US-based cannabis company that focuses on premium cannabis products with current operations in Washington and Oregon. Ionic has completed a number of strategic synergistic acquisitions since 2019 aimed at growing revenues as a multi-state operator, and increasing their overall product lines and intellectual property portfolio. Ionic’s strategy has been focused on building a regionalized multistate operation of cannabis brands in the Pacific Northwest markets with an eye to expansion into other recreational markets and aggressive national expansion.

John Gorst, CEO of Ionic said, “We are excited about this opportunity to expand our presence in Washington State. Cowlitz has tremendous brand presence and following in Washington State, which we feel is a natural fit, complementing our existing operations. The combination will make us one of the largest premier cannabis companies in the Pacific Northwest markets. The acquisition of the Cowlitz Assets will represent a complimentary synergistic acquisition that achieves our goal of operational expansion and growth of our product portfolio.”

“The proposed transaction with Ionic is accretive to both parties, successfully meets our M&A initiatives and keeps Lobe active in the cannabis and overall transformation psychedelic medicine space,” states Tom Baird, CEO of Lobe. “The Transaction provides Lobe with significant ownership and board presence in Ionic. With its already significant operations in Washington State and Oregon, we feel Ionic’s proposed product expansion initiatives together with the addition of the Cowlitz Assets can lead to aggressive growth.”

About Ionic Brands Corp.

Ionic is dedicated to building a regionally based multi-state consumer-focused cannabis concentrate brand portfolio with strong roots in the premium and luxury segments of vape concentrates and edibles. The cornerstone brand of the portfolio, IONIC, is the #3 vaporizer brand in Washington State and has aggressively expanded throughout the Pacific Northwest of the United States. The brand is currently operating in Washington and Oregon. Ionic’s strategy is to be the leader of the highest-value segments of the cannabis market.

About Lobe Sciences Ltd.

Lobe is a growth-oriented research, technology & services company that provides financial, management, IP and branding support to businesses. The Company operates a portfolio of companies focused on developing transformational medicines and applies refined strategies to help partner companies reach their full potential. Based in Vancouver, BC, Lobe Sciences creates value through acquisitions and development of assets, products and technologies by leveraging its scientific, engineering, branding and operational expertise supported by strong capital markets acumen.

For further information please contact:

Lobe Sciences Ltd.
Thomas Baird, CEO
info@lobesciences.com
Tel: (949) 505-5623

THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.

Disclaimer for Forward Looking Statements

This news release contains forward-looking statements relating to the future operations of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact included in this release, including statements regarding the future plans and objectives of the Company, the Company’s expectations surrounding its development of treatments and/or therapeutics for mTBI and PTSD, the proposed Transaction and terms with Ionic and estimated capitalization of Ionic and share value to Lobe, Ionic having its cease trader orders lifted and resumption for trading on the CSE, future sales and expected revenues of Cowlitz and enhancing its value to the Company, are forward looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations are risks detailed from time to time in the filings made by the Company with securities regulations. Readers are cautioned that assumptions used in the preparation of the forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including changes to the regulatory environment; and that the current Board and management may not be able to attain the Company’s corporate goals and objectives. As a result, the Company cannot guarantee that any forward-looking statement will materialize and the reader is cautioned not to place undue reliance on any forward-looking information. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made only as of the date of this news release and the Company does not intend to update any of the included forward-looking statements except as expressly required by applicable Canadian securities laws.

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