 We hope you had a great Thanksgiving weekend with friends and family. On behalf of all of us at Newstrike, I wanted to thank you for your ongoing interest in, and support for, our company at this very exciting time.
The excitement around the Canadian cannabis sector continues to build. This unprecedented business opportunity has attracted interest and investment from across the country and around the world. On that note, I wanted to share the latest news about Newstrike and Up Cannabis, and highlight how the work we are doing today is enabling our leadership in the industry.
In fact, this “UpDate” is the first edition of a monthly newsletter that will detail our progress towards important milestones, as well as news related to the evolving regulatory cannabis landscape.
If you would like more information on any of the topics discussed in an UpDate, please do not hesitate to reach out to me or anyone on our team.
Best regards,
Jay Wllgar
jwilgar@newstrike.ca
CEO
Newstrike | |  The recreational market demand for cannabis is expected to surpass 700,000 kilograms in the first year after the July 1, 2018 legalization milestone. With the demand in place, Newstrike has an aggressive growth strategy in the sector well underway.
Since Newstrike completed its RTO on May 29th 2017, the company has expanded its potential production pipeline by a factor of five. Key milestones have included: - The acquisition of an operational greenhouse in Beamsville, Ontario from Westbrook Nurseries. The company has received municipal approval to increase the growing space at this facility, doubling it from 203,000 sq feet to almost 400,000 sq feet.
- The acquisition of Enderlein Nurseries, a late stage ACMPR licence applicant. Formerly Canada’s largest producer of garden roses, the Enderlein facility has been issued a “Letter to Build” from Health Canada and is approved to begin construction and eventual pre-licence inspection.
These two facilities provide significant potential capacity to our operational facility in Brantford to provide both indoor and greenhouse hybrid cannabis growing facilities in Canada. Once fully operational, total cannabis production is projected to be to 17,500 kilograms per year by the end of 2018, with significant room to expand. | |  | | The Tragically Hip performing during their final concert series in Kingston Ontario. | | It was a poignant, bittersweet evening when “Long Time Running” premiered at Toronto’s Roy Thompson Hall on September 13th, 2017.
The film chronicles the farewell cross-Canada tour by our partners, The Tragically Hip. Candid interviews and scenes from the live shows across Canada capture the profound depth of emotion felt by the band members and their legions of fans in every corner of the country, demonstrating once again what a unique and irreplaceable hold the band has had on our home and native land.
And of course, there is plenty of magical music performed as only the Hip can do. Long Time Running will be airing on CTV on November 12th at 8:00pm EST, will air commercial free on CraveTV starting November 13th and on Netflix x Canada around the world beginning November 26th. | |  On October 2, 2017, Newstrike was pleased to announce the completion of a convertible debenture offering in the principal amount of $4,000,000 to a strategic lender. The Debenture will mature in three years and bears interest at the rate of 8% per annum, payable quarterly.
With a rate that is significantly lower than many recent debenture financings in the Cannabis industry, this financing provides us with a very reasonable cost of capital to fund the expansion at our new Niagara facility.
Newstrike intends to use $3,000,000 of the funds received from the financing to retrofit its greenhouse property in Beamsville, Ontario and the balance for general corporate purposes. The Debenture is secured by a first mortgage charge on the Company’s property located in Beamsville, Ontario. | |  | | Cannabis growing at a Newstrike production facility in Brantford Ontario. | | On July 17th, 2017 Newstrike announced that its wholly-owned subsidiary, Up Cannabis, had received approval from Health Canada for the production of cannabis oils. This is a significant positive step for the company as it allows for Newstrike to harness one of the fastest growing segments of the legal cannabis marketplace.
Over the last seven years, demand for cannabis oils has increased by 800% and shows no signs of slowing down. As Canada moves toward the legalization of recreational cannabis for adults, Newstrike believes that this will be an ever growing market segment, one which Newstrike can profitably diversify into. It’s a segment which we intend to pursue aggressively. | |  The federal government has given no indication that it will move from the established date of July 1, 2018 for new cannabis legislation to come into effect. Newstrike continues to develop and execute its business plan on this basis while monitoring regulatory developments and participating in discussions at the federal, provincial, and municipal levels.
In terms of the actual legislation, Bill C-45 has completed committee hearings and appears on track to become law by the summer of 2018. It is expected that further regulatory development will occur in early 2018, and will not impact the July 1 milestone. | |  | | Alberta Justice Minister Kathleen Ganley speaking on upcoming provincial Cannabis frameworks. | | Provincial governments have begun to introduce their frameworks for the availability and distribution of cannabis, and the enforcement of regulations around it. Each province has taken its own unique approach. Some of the plans announced are: - Ontario announced on September 8th, 2017 that the province would move to implement a crown corporation model for retail cannabis distribution, similar to the LCBO model.
- New Brunswick announced on September 15th, 2017 that the province would move to implement a crown corporation model for retail cannabis distribution.
- Alberta announced on October 4th, 2017 that the province would conduct further consultations on retail cannabis distribution, including the potential for independent retail. Newstrike is exploring the unique opportunities this retail model offers to licensed producers and will share more information with you as it becomes available.
- British Columbia and Saskatchewan are both currently consulting with residents around retail distribution. Newstrike is working to support these consultations to help foster the creation of a robust and responsible retail cannabis marketplace.
| |  Newstrike, along with 11 other Licensed Producers of medical cannabis, joined together to form the Canadian Cannabis Co-op. The purpose is to develop and execute a retail strategy, starting in Alberta, which has stated that cannabis is to be sold in specialty stores, separate from alcohol, tobacco and pharmaceuticals.
If private retail stores are allowed the Co-op is ready to implement a strategy of bricks-and-mortar stores and an e-commerce platform in time for legalization in July 2018.
Working together with these like-minded LPs is a reflection of our commitment to growth and to creating the best retail experience possible for consumers. | |  | | Newstrike's VP of Regulatory Affairs addressing the Association of Ontario Municipalities. | | | Newstrike executives are frequently invited to participate at industry events, panels and symposia. It’s an excellent opportunity to raise awareness and compare notes with others in the field. Recent events have included Women Grow, The Blakes Cannabis Summit, the GrowUp17 Summit, Association of Municipalities of Ontario and the Eight Capital “Let It Grow” Cannabis Conference. | |  Up Cannabis was the first cannabis sponsor of the prestigious Polaris Music Prize Gala. The Polaris Music Prize recognizes Canadian albums of distinction, regardless of commercial sales or genre.
Gord Downie, lead singer of The Tragically Hip, was shortlisted for the prize for his solo album, The Secret Path. Up Cannabis attended the Polaris Music Prize Gala and provided gift bags to all attendees and presented customized wooden boxes featuring a laser cut leather print of each nominated album to every nominated musician. | | - Newstrike Responds to Ontario’s Cannabis Plan. Link Here
- Newstrike CEO Jay Wilgar talks about Up Cannabis’ investment in Lincoln Ontario. Link Here.
- Newstrike CEO talks about investment in Dufferin County. Link Here
- Cannabis Company has Growth Plans. Link Here
| | | Do you have questions about these topics, or any others related to Newstrike, Up Cannabis, or the emerging market for cannabis in Canada? We’d love to have a conversation. Follow us on | | | If you want to speak to one of us directly please contact communications@newstrike.ca and one of our team will be happy a facilitate a connection to, and a conversation with, any member of our team. | |  Newstrike is the parent company of Up Cannabis Inc., a licensed producer of medical cannabis based in Brantford, Ontario that received its cultivation license on December 19, 2016. Newstrike, through its ownership of licensed producers, intends to develop a diverse network of high quality cannabis brands.
For more information visit www.newstrike.ca. | | | | |