On Thursday (March 8) MPX Bioceutical Corporation (CSE:MPX; OTC:MPXEF) held a conference call with investors to provide an inside look into its fiscal 2018 third-quarter financials and the rapidly expanding US cannabis market.
Scott Boyes, president and CEO of MPX, led the call by rounding up the most recent developments of the company and announced the company is breaking way to increase their production capacities.
These increases, Boyes said, will first be seen in the state of Arizona, where the company announced the acquisition of a group of businesses in the area.
Plans to expand into Canada are underway as well for the company. In May 2017 Boyes told the Investing News Network the company grew frustrated awaiting responses from Health Canada so instead decided to expand its reach into Arizona and Nevada.
However, during the call, Boyes revealed MPX has recently had “encouraging” dialogue with the Canadian agency and will be taking a closer look at its Ontario facility. Despite these aspirations, Boyes made it clear in the call that the primary focus of the company is in the US market.
MPX expanding footprint in the US cannabis market
In addition to its interests in Arizona, the company currently holds a presence in Massachusetts, Nevada, and Maryland. During the call, Beth Stalova, the chief operating officer of MPX, said the company has applications in Ohio that could be seeing developments in the coming weeks.
Boyes said the company currently has 10 dispensaries in four states either fully active or in a stage of construction. MPX also currently has three cultivation facilities and the fourth one under construction in Massachusetts, which will represent 100,000 square feet of cultivation, according to Boyes.
“This is one of the largest footprints in the US cannabis industry and one we intend to expand even further by expanding in states where we already operate and by entering into new markets,” Boyes said.
When asked by Russell Stanley, cannabis analyst at Echelon Wealth Partners, if there were any markets in the US MPX was staying clear from, Stalova said the company was sticking to its strategy to limiting licensing states. Stalova added she was fond of the California market and revealed a partnership MPX is working to enter that particular state.
“We take the MPX concentrates brand there under a licensing agreement,” Stalova said. When later asked more details for this deal Stavola added:
“We are working on a deal there now with a production license, where they would be a contract manufacturer for us and we would pay them a price per unit and license the MPX brand.”
Vahan Ajamian, cannabis research analyst for Beacon Securities asked the MPX group what its current market share in the state of Arizona is, after completing the most recent acquisition. Boyes said it’s difficult to provide a straight answer since most entities in the state don’t publish their results.
Stalova offered a guess of MPX amounting to 7 or 8 percent of the total market share in Arizona.
Later in the call Alan Brochstein, cannabis analyst with 420 Investor asked Boyes if MPX had a current need to raise capital for the completion of their deals.
Boyes answered by saying the company will only go to the market for capacity growth acquisitions but are confident in being cash flow positive in its operations over the next fiscal year.
Stanley asked the if the representatives had seen any problems or change in business after the Sessions memo came into effect when Attorney General Jeff Sessions rescinded the Cole memo back in January.
“It was like a minor speed bump that the industry raced over pretty fast,” Boyes said in response.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.