 Hi, how you guys doing today? My name is Rich from RichTV Live. I'm here with a very special guest It is Jamie who is the vice president of corporate development for Indiva. How you doing today, Jamie? I'm doing very well. It's great to be here at the Lyft Conference in Vancouver It is and thank you from flying all the way from Toronto to come join us And I know you guys were here last year. What do you think of the event so far? Haven't really had a chance to walk around too much, but thus far I saw some of the setup yesterday It seems like all the major players are here There's a lot of excitement around edibles and I mean that's part of what we're excited about as well But it looks like a very well-attended event Which is really good to see that this is still still humming and the industry still has a lot of buzz Yeah, you know, it's funny because I was walking around and I was telling everybody when I first got here I was making videos and I was live streaming on our channel. I was like cannabis is not dead Exactly this is not dead. Everyone's looking at me. They're like, it's not dead. It's not dead I'm like, no, it's not dead. We're in Vancouver. This is the heart of cannabis, right? It's like Elton John I'm still standing, you know, yeah, I mean obviously the stock market for cannabis has had a massive reset, right? Indiva like everybody is not where you guys want to be yet as far as the stock market Tell us about where you guys are at and where you guys are going Yeah, I mean the goal for I think 2020 is companies were praised in the past on, you know, how many patients you had acquired How many registered patients how many active register, then it was square footage And we've gone through all different types of metrics or ramifications and it was revenue And I think guys are really waiting for that wonderful term cash flow or free cash flow I mean that's what we're waiting for guys are now pulling back on capex on new expansions Thankfully, we never fell into that trap. I mean it doesn't mean we don't have some pain right now anyways But we never fell into the trap of we need a four million square foot greenhouse We always expected the screenhouses were going to get built Farmers were going to farm and we were always focused on value-added products. So that is our 2020 story We hope we're imminently away from getting our extract license which will allow us to get bang chocolate into the marketplace We have a brand we want to launch with a group called die car on the chocolate side as well We already have pre-rolls in the market. We have about a 10 percent market share in ontario pre-rolls And we're going to start to expand that We actually have a little excess capacity that we've since signed a deal with supreme So supreme we're now making their pre-roll sugar leaf by 7ac That's my little plug for the supreme guys at seven acres And we actually have those products in two or three provinces right now working with them hand in hand So really 2020 is get products that that customers enjoy out to the market and start to really pull in those cash flows Keep things tight on a home front in terms of our own spending our own capital spend And really start hopefully you know second half of the year show profitability and and more than profitability show actual cash flow Which is basically profitability minus cap x right? Oh, I think that's great because we're at a point now where it's all about cash flow It is it's all about profitability And there's very few that are actually profitable yet Yeah, I think maybe like 10 out of like 440 companies. Yeah, I mean it's not really even profit It's adjusted operating income. They're they're using so it's not real Yeah cash flow positive yet, but we're still in such a new industry correct, you know, I use the example of gary varner chuck You know gary v. No big social media guy. Yeah, huge cannabis enthusiast He believes that the cannabis sector is going to be bigger than the tech sector But he's saying that he was one of the biggest investors and did really well in the tech sector And he said that we're going through what is a bubble and it's burst and coming through this We are going to find the winners But he believes that the winners haven't even been identified yet No, that's true that we may not even be in the first inning yet And we're still five or ten years away from really seeing the growth that is going to come And you're going to see some fail and you're going to see some succeed And the biggest successors may not even been identified yet What do you think about that belief system? Yeah, I mean, we don't know who the strong brands are There is no coke as much as we want to identify who's got the market cap and who has financial backing Whether it's tweet or cronos or you know afri aurora The I don't think consumers have the brand recognition just yet to identify what's coke What's pepsi, you know pick pick your you know top top shelf brands and we'll figure it out I mean all you can do right now within the rules in canada is get out strong brands people enjoy or strong products They enjoy and then the recognition a word of mouth builds because of all the wonderful limitations around advertising And we're even only hitting the cusp of cannabis 2.0, which I think broadens it out to the non smokers We're finally hitting that second stage, which is a big piece of the market south of the border I mean california you add up edibles and vaping. Well, we can talk about vaping on a different context But that's 50 of the market. There are flower smokers. They'll pick their favorites It might not necessarily be the tweets of the world, you know where they find that one strain they fall in love with So, uh, there's a big flush out that will happen. It's really hard to pick winners It's hard to figure out where that next niche product that really, you know, like a lacroix water, you know Comes out of nowhere and becomes a dominant player, you know in a niche market or alkaline water or something like that So we'll figure it out. I mean we think we have some very strong brands One of which we've brought up in california called bang chocolate that has a very very strong Recognition south of the border. We're hoping that recognition and the the idea that it's the same in every market They move into so they're going to be in illinois. They're going to be in florida. They're already in california nevada So it's the exact same chocolate the exact same flavor will be, you know, kind of a the big mac, you know Everywhere you go the big mac tastes the same. I mean, that's the essence of a brand No variability. So that's what we're bringing to the canadian marketplace Hopefully within the next as short as two weeks. Hopefully not much longer the bang chocolate will start hitting the shelves We have some purchase orders across the country. We'd love to execute on the moment. We get our license But bang is a strong brand and that's what we decided is bring a brand up That's already, you know, well followed well loved and bring it to the canadian marketplace and let canadians enjoy something That already has a strong following Will it be a winner? We hope it will You know, it doesn't mean other chocolates won't emerge But that that has been our strategy is try to bring strong brands north. That's I think that's the key now How do you guys operate in this climate where health canada Won't allow you to do more than 10 milligram packaging Meanwhile in the u.s. Yeah They got packages like out of a thousand milligrams. I'm hearing I'm like Thousand milligrams. I can't even imagine that but they literally have 100 to a thousand milligram packaging in canada It's 10 milligrams. How do you guys deal with this environment where health canada is really not allowing you to advertise They're not like you got to do more of this, right? This is really I think was how you get out there Right, I think getting products on the shelves early, which is what we're trying to do letting people try them Tell their friends. We think we're going to come in at a pretty aggressive price point as well to at least get rid of that Original barrier to a customer picking your product I think at the 10 milligram level being aggressive on pricing to the upside is a little bit dangerous You want to sell a drink for 12 dollars with 10 milligrams for some people? It won't do much and they just spent 12 bucks So we're actually are coming in I won't give the exact pricing it will be available pretty soon But we're going to come in with some pretty aggressive pricing and our actual unit size is pretty small We're not going to sell you a giant chocolate bar with 10 milligrams That's you know 60 grams of chocolate and then one out of five people needs to eat four of them Yeah, that's not what we want to do. It doesn't make sense You'll have you know, you'll be high but you'll be a little bit overweight and that's not what we want And you'll be a little full So we actually have reduced our unit size to a 10 gram piece of chocolate with 10 milligrams Which is it's breakable into four a charitable 2.5 milligrams each to let people get a quick You know a slow start. That's what we've decided is our unit size. It's not that big A chocolate from you guys. Is this it? This is it. Yeah, that's this is it So this it's not going to look like this. Obviously, there's no yellow warning symbols But that is essentially the the size it's not opening. Oh, yeah, that's the fun part. Yeah, you might need Is it difficult to open it? It's difficult. It's like child safety a child proof. Well, it's very well We're going to get some help from our from our support system here It's a 10 gram piece so nothing too onerous to get to 10 milligrams It'll come in aggressive pricing and we'll let people try it share it break it up We're actually hoping people go into dispensaries and buy three or four of them and pass them off to friends We're coming out with milk chocolate dark chocolate to start thc only and then we'll start to expand But uh, you're right 10 milligrams is tough. I mean, we're all on the same level playing field So I don't have other competitors out in the marketplace launching 50 milligrams and we launch fives and tens Everyone's on a level playing field except for the black market. Correct But I think some of the black I don't think we're after the black market in in a massive massive way I'm not going after the 300 milligram person. I can't win them over anyways It's impossible for me five milligrams is plenty 10 is a lot and those are the people we're targeting If you're a medical patient who takes 300 Sadly, you're not my customer anyways So this is what it looks like it'll it'll look like that but it'll be scored into a four It'll look a little different, but essentially that is the format. This is the bang. Yeah Again, it's uh, they've won multiple awards at cannabis cups and uh, yeah, it's great It has a nice snap of a properly tempered chocolate I think you got the dark one so Little less child-friendly because it's a dark chocolate a little more skewing towards, you know, it's good lower sugar I mean if you look at the ingredients on so your first Relationship with a product when you can't mark it is going to be Do I like the logo? Do I like the look? Do I like the price and the secondary one is do I like the actual ingredients on the back? And I'll read them really quickly cocoa butter cocoa solids sugar vanilla soy done There's five like all healthy products Well nothing too crazy and of course in the real one it'll say cannabis at the end, but I mean There's nothing in there. So how many milligrams are in this 10? Uh, this is zero. Oh, this is zero medicated. So there's no mental. We don't have our license yet This is just uh, some samplers we brought into the marketplace Just to get let people get used to the flavor. Do you so you said you don't have your license yet Do you have a timeline on when you might be getting your license? Yeah, we should hopefully let's say Optimistically, let's hope in the next couple of weeks pessimistically It's health canada dependent everything's health canada dependent, but it's always a couple weeks couple weeks I know it's we've been we've we've submitted it quite a few many months ago And we've been waiting patiently if we get it this month. We'll be ecstatic. We'll get products out to market We have an inventory of products ready to roll instantly and We'll have these things on the shelves as soon as possible for uh in multiple provinces Okay, great and we're getting there for an investor that's watching we've got investors watching in 60 countries worldwide They're taking a major interest in cannabis stocks There's so many global cannabis enthusiasts that just love cannabis and they love Investing and they love this industry myself included, right? What do you say to them that you know, there's like 440 cannabis companies What do you say to the people that are like, okay, I'm interested, but why you there's 440 cannabis companies Why would I want to invest in your company? What makes indiva such a compelling investment opportunity? Well, I guess the first thing I can talk about is the valuation. We're trading below book. We've raised Quite a bit of money. We're trading around a 20 million dollar valuation. We're already in market with products So we're not sitting around, you know selling b2b. We actually have consumer products that are selling quite well We skipped over a weed in a pouch or weed in a jar and went straight to pre-rolls for financial reasons Part of it was competition when we originally launched pre-rolls. There was maybe 25 pre-rolls in the canadian marketplace So it was not crowded at all. But if you looked over at we'll call it, you know a 3.5 gram pouches. There was 300 So we skipped that entirely We are not ever going to put ourselves out as you know, the best growers in the marketplace But we make great products. So our pre-rolls look gorgeous. They don't canoe. They're properly manufactured Which is why we've been approached by multiple groups to make pre-rolls on their behalf So we currently have multiple pre-rolls in market. Is that like white labeling type relationship or no? It's more co-packing. So, you know, there's been some critiques in the marketplace as can you have your own brands and co-packing And you know in many industries that happens. So we we kind of mirror it off of that So we have our own indiva brands and then like I mentioned We have sugar leaf by 7ac brands that we will be creating on their behalf To get their products into the marketplace. So we're just very good at making pre-rolls We've started to leverage that to help some of our neighbors We're also very well located in an area where labor is not an issue You'd be surprised how hard it is to find labor for some of the LPs out there And they will struggle immensely to have a facility with 200 people In areas that are outside of the you know, your your large communities. So we're in london ontario We are an hour away from potentially the largest market in the world Which is toronto right now largest legalized recreational market, which is toronto So for us shipping is quite reasonable our access to labor in london ontario is very cpg oriented We're finding some of the best cpg people and we're not backfilling with tobacco and alcohol So much as food and cpg we think that was more the mirror image Of what our industry needs to thrive to strive toward is efficiencies that cpgs are able to create That's what we've backfilled valuation solid. We're launching products that we know Are already well accepted like bang chocolate. This is not a science project They've won dozens of awards. They've been in california for a decade. They were started by a master chocolate here We're just leveraging what we know people already enjoy Not trying to launch brand new products from scratch with our fingers crossed that one of our skews catches This is the other so my ceo hates science projects and we all agreed. This was the way to go We have some other project products We're going to bring in from places like seattle where it's going to be something called gems Which is basically like a sweet tart a medicated sweet tart We'll have cannabis sugar cannabis salt for those people. Oh, wow cannabis sugar and cannabis salt Yeah, that's going to be probably a q3 I've never even heard of that before that's incredible It's a patented process to actually combine salt and sugar with cannabis so that dissolves perfectly so you can bake with it So in places like kebek where they won't do edibles Because that are catering to children and we can market them cannabis salt. You can sprinkle it on your french fries We can market them as genius sugar. You can put it in your coffee. I don't have to buy cannabis coffee I can buy 20 different kinds of coffee and just put sugar in it and i'm done. I like that That's really smart. That's really really smart That's the idea is trying to make what we call flexible edibles and get that into the marketplace We'll see if it catches on as much as we think it will but uh, but again not recreating the wheel We're finding products already accepted in other states and and other jurisdictions and bringing them to canadians Well, you know what? I'm really really excited to see you guys grow. Thank you for your time today Thank you guys. This is jamie the vice president of corporate development development for indiva Thank you for your time today. Have a great day. Thank you wish you the best of luck. Thank you so much. Thanks everyone. Thank you guys for watching