True Leaf will complete the construction of a new cannabis growth facility in the hopes of obtaining a license to sell medical product to patients in Canada.
A public company known for its work with cannabis health products for pets is ready to expand its presence in the Canadian medical market.
True Leaf Medicine International (CSE:MJ,OTCQB:TRLFF) provided its shareholders with an updated look into the development and completion schedule for a new cannabis cultivation facility.
The new facility’s phase 1 portion, currently under construction in Lumby, B.C. and slated for completion in fall 2018, will be capable of producing 15,000 kilograms of dried cannabis product per year at a price tag of approximately C$12 million, according to the leading executive of the company.
Darcy Bomford, CEO of True Leaf, told the Investing News Network (INN) this facility will be focused on the entry for the company in the legal medical market. As it moves forward alongside the policy, Bomford said he hopes for the company to extract its own CBD for pet products.
The facility, named True Leaf Campus, includes the first phase of a 16,000 square foot wing with hydroponic growth rooms and a 9,000 square feet section based on two floors with an initial grow area and laboratory services.
According to True Leaf’s statement, the company has obtained approval from Health Canada to build this growth facility and will undergo an inspection once it completes that construction. Bomford told INN the company will need to obtain licenses to grow and sell product in order to enter the market.
True Leaf to raise new capital later this year
In January the company raised C$14 million as part of an equity financing deal. Bomford told INN a solid portion of this capital helped the company secure the entire parcel of land where the new facility is.
He added the company will look to raise more money later this year in order to complete the construction process for this facility.
Bomford said the expectation is to raise close to C$50 million later this year and split the funds between its pets and medicinal divisions. Capital will also be allocated to acquisitions and general capital, he said.
Despite an initial upward trend for True Leaf’s common shares the day of the announcement (June 7), the company closed with a 7.27 percent loss and ending the day valued at C$0.51 per share.
On Monday’s (June 11) trading session the company finished with minimal change to its stock, staying at a price of C$0.52 per share.
Projection of the company’s plans according to its CEO
The timeline Bomford presented to INN shows it will take the nearly C$50 million market cap company nearly a year before it can start selling medical cannabis, due to licensing periods for inspection and approvals.
“That puts us in mid next year for selling product unless Health Canada speeds things up considerably,” Bomford said.
This isn’t the first time True Leaf has attempted to build out a licensed producer (LP) of cannabis in Canada. Back in 2013, the company made attempts to obtain a license for a facility in Vernon, B.C.
In 2014 Health Canada, the government agency tasked with providing licenses to grow cannabis, told the company ‘we’re not going to approve you at that location.’ Bomford went ahead and secured the Lumby site in April of 2014.
Expansion of pet cannabis market
True Leaf’s other division is based on the pet cannabis market with a supplement lineup of hemp-based oils, chewable items and other health products.
This year saw the entry of CannTrust Holdings (TSX:TRST) into the pet development area, as the LP signed on a partnership with Grey Wolf Animal Health, a private healthcare company working on a portfolio of products for pets.
Paul Trust, CEO of CannTrust said in a statement the LP would help develop “standardized cannabis products specifically designed for pets” alongside Grey Wolf in the future.
Canopy Growth (TSX:WEED), the largest publicly traded cannabis company, also recently announced efforts into the pet market, revealing it is developing cannabis extracts and formulations for cats, dogs and horses.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.