We’ve had ads set to roll for a month. We’ve been calling the IR folks, asking for information. We’ve been watching trading volume dwindle and heard questions being asked that went unanswered. Conversations involving the medicinal cannabis sector which would once include the company as a player were now going on without mention of it.
For all intents and purposes, it appeared Stockhouse client T-Bird Pharma (TSX:V.TPI, Stock Forum), once one of just a handful of Health Canada licensed MMPR-approved medical marijuana producers and looking to ride to big revenues, had fallen off the world.
I’ve asked for a sit-down with executives, but the executives aren’t talking. That’s not to say they’re not responding, just that they’re not talking.
“I have nothing to tell you.. right now..” said one insider this week. “There have been issues that we’ve been working through that we’re confident won’t be issues shortly. As soon as I have something to report to you, I’ll be on the phone and it’ll be on the newswire.”
In the medical marijuana world, this is not uncommon. There’s a general fear among many LPs that Health Canada is an organization that, at times, is making it up as it goes along, and saying nothing sure beats learning the hard way that you’ve said the wrong thing.
A recent publication of the MMPR-approved companies by the government body was suddenly split into two groups – those that could grow and sell to patients, and those who could grow.
T-Bird, which got its licensing earlier in the year and was approved to both grow and sell previously was suddenly showing up on the grow-only list, along with Tweed Farms, the ‘early growth’ arm of giant LP Tweed that ships product to HQ when it needs to be processed, and Hydropothecary, a Quebec outfit that plans to sell product at six times the price of Tweed, when it’s allowed to sell product.
What this meant for T-Bird, and whether that was something the company was okay with, was unclear. Were they planning on becoming a B2B operator, farming plants out to other LPs instead of patients? Or were they blindsided by a Health Canada rule change that put their business concept in doubt?
Answers were thin on the ground. So I’ve done some digging.
Here’s the way it looks, from the outside at least, for TPI.
T-Bird, when it was approved for its license, had a small zoning issue going on with the District of Saanich. It wasn’t a big deal, and calls to the district this morning indicate the council has no trouble with T-Bird doing business there, nor does it have problems with the idea of local medical marijuana production in the area.
Couldn’t get anyone on record, but one city staffer told me the council was being ultra-careful with the process and wanted to make sure that, if anyone wanted to complain about medical marijuana locally, they’d have every chance to do so.
While that process was ongoing, T-Bird couldn’t move forward with its business plan. As best as I can figure, the company saw this as a temporary delay and worked with the district to move forward quickly and clearly while it was building out its patient list and seeding its first grow.
But while that was going on, T-Bird’s annual MMPR license renewal came due. This requires a Health Canada inspection to ensure the company is following all the rules but, shortly thereafter, perhaps because there weren’t any sales happening (happy for someone at the company or Health Canada to clarify this), T-Bird landed on the new ‘grow only’ list.
A public hearing took place at the District of Saanich chambers Tuesday night. Medical marijuana is understood by many on council, in fact one councillor reportedly spoke to the crowd at a previous meeting about how a family member was successfully using the substance to treat illness.
There were objectors, as there always are, but I’m told council moved forward with the decision to add a new definition for MMJ production and distribution and to amend zoning of the T-Bird facility to permit such use. At present, the minutes of that meeting are not available online, but the agenda can be found here.
If what I hear is true, T-Bird’s zoning issues just went away.
Which leaves its MMPR issues.
This morning I talked to a lawyer in Toronto who deals with Health Canada issues, and they told me (again, off the record, and with no insight into this particular case) that for a company to move back to the grow-and-sell list, they’d have to get have their product tested and approved in a certified lab, and get another Health Canada inspection on the facility done. And regular industry watchers know how that can go.
There are about 50 MMPR applicants waiting for a visit from HC, and a handful at the final stage of the MMPR application hoping to get the nod sometime in the next month. Or two. Or six.
I’m told most companies that go through the lab testing process irradiate their crop to ensure there are no surprises. T-Bird reps told me months back they don’t irradiate and had no plans to do so.
If T-Bird can get product approved without hitting it with plutonium first, then well played, sirs.
T-Bird stock, and it’s a credit to the company that this is the case, has largely held up during this period of radio silence. It hit $0.60 a month back, down from the $0.90 it went public with, but up from the $0.50 level investors have seen for most of its existence. The last month has seen stock slip back to that six-monthly average, at a time when bigger players with no MMPR problems or zoning issues have seen stock quotes and volume slashed.
So the big question is, is T-Bird about to get back into the game?
If it is, it would explain why they’re not talking, even to a company like Stockhouse which they’ve paid money to for marketing tools like banner ads, email blasts and Q&A’s, which currently sit unused.
Any hint that the company is about to open its patient registration process up and start shipping product would likely see an enthusiastic jump in desire to own the stock. And that product shipping start would likely happen quickly, as the company has been allowed to grow for some time and has been likely storing product in expectation of a return to business normality.
There’s precious little on the company website that points to patient signups or product availability. That may be a smart move, at a time when Health Canada has been sending out warnings to just about every LP (T-Bird included) that they shouldn’t be engaging in excessive product marketing of what is a controlled substance.
And T-Bird isn’t patient numbers-focuses anyhow, as they have always said the company is looking to do business with a niche patient demographic that is genuinely ill and prepared to pay a premium for the best possible medicine for what ails them. A concerted push to become the insurance company vendor of choice is high on their wishlist for the coming year, and their mondo-low cost structure enables them to not have to rely on driving patient signups a few hundred at a time to keep the lights on.
I’m not alone in this thinking. Insider buys have been stacking since Tuesday.
I would expect the company to post news on the zoning soon. I would hope that news of successful Health Canada inspections, harvesting, and the first round of product delivery would follow quickly thereafter.
Long holders take note. Potential long holders, start your digging.
And, company insiders, my notepad is ready when you are.
--Chris Parry
https://www.twitter.com/chrisparry