Post by
Jonasss on Oct 08, 2019 6:52am
PURE Investor update minutes ago!
Dear Shareholders and Investors, The team at Pure Global has been busy fortifying its foundation to unleash a profit generating operation over the coming quarters. We have been waiting for several months for Health Canada approvals for our newly finished cultivation, processing, and extraction rooms which makes up Phase 2 and will enable us to begin our core cultivation, extraction, processing and manufacturing business. We are expediting the installation of automated processing and packaging systems planned for Q1 2020 to increase our capacities as the market demand is rapidly outpacing supply on these fronts. I am pleased to share a link to Pure Global Cannabis Inc.s (Pure) latest Investor Presentation. Phase 1: Medical and Retail Sales: In the meantime, our Phase 1 medical and retail sales focus has resulted in connectivity with many cannabis clinics, medical clinics, online platforms, and retail sales channels including: Medical B2C: We are approaching 1,000 patients registered. We are expecting to see a significant uptake in the number of new patients resulting from our oils sales capability which we only recently received in September. We are also expecting to see substantial increases in patient numbers over the coming months especially when another LP has not being able to service their 70k+ patient base. Medical B2C: Direct interface with Appletree / Canadian Health Systems (CHS) EMR which is the third largest database of patients in the country. This seamless interface reduces patient activation time by over 50% and sends medical documents from CHS systems directly into ours. We are rolling this out to a few clinics over the next few weeks before we expand to their entire physician network. Retail B2B: PureSinse now has its products available on the shelves of retail stores in Saskatchewan and soon in Manitoba. We are adding product lines to the other provinces over the coming months as we launch P&W, PureSinse Wellness, Galaxy, dried flower and vapes, and Kumo mochi edibles. Retail B2B: Through our distribution agents Velvet, our goal is to be in every legal retail cannabis store across Canada in H1 2020, and become a recognized retail consumer brand for premium cannabis and CBD products. Hemp B2B: Our Great Canadian Hemp Co (GCHC) which represents a high margin opportunity, has been re-formulated and configured with a third party co-manufacturer to start producing for export to France, Germany, Romania, the UK, Japan, S. Korea, and China starting H1 2020. We also plan on launching this line in the U.S. sometime in 2020. Phase 2: B2B Sales enter PureCanna Solutions: Our Phase 2 expansion of our Brampton facility is ready and awaiting Health Canada approvals. Currently the highest volume sales and high margin opportunity in the sector exists in bulk isolate sales. There is very limited LP sourced CBD isolates available in a market that is expected to be 10 fold larger than THC markets, given CBD is non-psychoactive and has numerous health benefits when used topically or ingested. It is estimated that eventually CBD products will be much more broadly available than THC. After cultivation of either cannabis or hemp, the next key aspect of the supply chain is concentrates and extracts. Soon most CPG brands will have their line of CBD products, and we aim to be their supplier of choice for their CBD Active Ingredient or co-manufacturing needs. PureCanna Solutions is our newly launched B2B brand which will focus on selling CBD bulk isolates and distillates, as well as offering white label and co-manufacturing services. With installation of large scale biomass extraction equipment underway, and CO2 extraction capabilities already installed, we aim to begin bulk distillate sales very soon after health canada approval of phase 2 rooms. At current wholesale rates of $50k to $90k per kg, we aim to be at 50-100kg sales per month by Q2 2020, and increase to 500kg per month by year end 2020. With retail CBD prices ranging from $80k to $180k per kg, we believe the 50% to 80%+ margins will hold for some time. This should enable us to reach cash flow positive in Q2 2020, and profitability by Q4 2020. Eventually wholesale isolate prices may fall for which we are hedging with our branded products, as retail prices arent expected to fall as sharply leading to higher margins for our branded products as time goes on. China bulk CBD Manufacturing and Sales: To further secure the companys long-term ability to produce and sell bulk cannabinoid isolates (CBD), competitively on a global scale, with the lowest cost possible and large capacity potential, we have successfully secured a joint operating agreement with KMT-Hansa for access to lands and licenses in Yunnan province - a very clean unindustrialized part of south west China. With this arrangement in place we will be able to secure low cost organic hemp cultivation and pharmaceutical grade CBD manufacturing, at costs and capacities that will allow us to compete in any global market with government support at all levels. KMT-Hansa - Yuanjiang Region - Pure Global Signing Ceremony September 28, Under the joint operating agreement, Pure Global will receive 30% share of profit from the project. KMT will provide all the resources required and secure any licenses to operate. Pure will design and manage the operations, and sell all the products produced by the project. The hope is the project will produce well over 1M kg of CBD isolate equivalent in the first year of operation, which in todays international CBD bulk marketplace, would sell for a minimum of $10,000 per kg. We were recently in the proposed region of China and were toured by ministers, mayors, governors, and officials to share the development plans and potential of the region. Our task force and due diligence team was provided with all of the information we required to assess the viability of the environment and lands. So far we have determined the land is better than expected and has potential to achieve USDA organic certification, as other outdoor crops in the region have. With the existing farmers who are growing only corn and rice, we can modify their farms with simple irrigation and provide them with vegetated plants which they grow and bring back to our processing facility to our specifications. We can at the same time bring these people out of poverty and allow them to continue their centuries old craft. The next step is for license registration, designing the facilities, then begin building the site where we can import our genetics and begin mothering. The facility is planned to have separate genetics lab, processing/extraction, and manufacturing sites, as well as a training centre for the farmers, where we would provide the necessary training and access to equipment to meet our requirements for the farmer to qualify for the growing contracts. According to our plans we will require 50 to 100 tons per day extraction capacity very quickly but will scale our capacity according to anticipated sales demand. In China things happen very fast so the hope is the minimal facilities will be up within 6 months to begin vegetation and the first farms. CBD topical products are currently legal in China representing a huge market opportunity there, where we plan to launch our GCHC product among other in H1 2020. Next key catalysts: Back in Brampton, as we wait for Health Canada approvals for phase 2, we have over 80 genetics in our library from which we are choosing the ideal cannabis and hemp cultivars for our particular bulk and finished products. Our team is continuing to go full steam with installation of the biomass extraction systems in place of one of the formerly planned cultivation rooms. We are devoting 3 previously planned cultivation rooms to storage, processing/packaging, and cold ethanol extraction. We are close to securing the necessary biomass with high CBD to begin isolates manufacturing. Our sales team is in full speed to secure sales contracts and PO's. Health Canada approvals are expected any day now which will catapult our manufacturing capabilities, sales potential, and likely our share price. Pure Global is positioned to become a leader in CBD bulk sales both in Canada and globally. To hedge against a market flood of isolates, we have aimed to produce organic, GMP, and ISO grade, as well as apply for Active Ingredient status at the earliest. Further to this we have secured low cost manufacturing capabilities to allow for price compression. To further hedge, the company is installing automated packaging and manufacturing for its branded products as well as for CBD/THC product co-manufacturing services. Over time the plan is to increase high margin branded sales with low cost inputs and continue to maximize bulk isolate and formulated cannabinoid extract/pre-formulated sales while offering the co-manufacturing services and white label products. Though Pure was up 58% in September 2019, the biggest and perhaps only gainer in the sector, we are only getting started. We believe we offer investors an opportunity to invest in a unique company at an attractive valuation. You can find us on the TSX Venture Exchange under PURE, or on the US OTC board under PRCNF. We are aiming to make 2020 the year for Pure Global with a solid foundation and high margin business model in place. Thank you and we look forward to your continued support and making Pure a recognized and trusted sector leader! With best regards, Malay Panchal President & CEO Pure Global Cannabis Inc