SEATTLE, Feb. 19, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- CFN Media Group (“CFN Media”), the leading agency and financial
media network dedicated to the North American cannabis industry, announces publication of an article covering Westleaf Inc. and their place in the Canadian cannabis industry. Canada’s cannabis industry
is projected to reach C$22.6 billion over the coming years, according to Deloitte, driven by the legalization of recreational
cannabis last year. Investors have many opportunities to capitalize on the industry’s growth with more than 100 licensed producers,
but only a handful of companies have taken a vertically-integrated approach that could eventually turn them into industry giants.
Westleaf Inc. (TSX-V: WL) is a vertically-integrated cannabis company with a presence
across the value chain. By taking this approach, the company is maximizing its potential margin, controlling the customer
experience, and gathering valuable insights from retail that can be applied upstream to create cutting-edge products and
experiences. Investors may want to take a closer look at the company given this unique approach.
Production Footprint
Canada’s cannabis industry continues to experience significant supply shortages, which underscores the importance of in-house
production. Many industry experts believe that these supply shortages could worsen with the launch of edibles proposed for October
2019. In addition to a reliable supply, in-house production ensures that strict quality standards are met and eliminates any
premiums that must be paid for third-party supply agreements.
Westleaf has a large-scale indoor cultivation facility under construction in Saskatchewan with anticipated capacity of more than
14,600 kilograms of dry flower per year. The first phase involves building out 84,800 sq. ft. of space into 20 grow rooms and a
processing hub capable of producing 7,300 kilograms each year. The second phase will use the same processing hub and add another 20
grow rooms to boost total production to 14,600 kilograms per year.
The company’s facility will have roughly the same size and scale as Whistler Medical Marijuana Corporation, which was recently
acquired by Aurora Cannabis Inc. for approximately $175 million.
Specialty Extraction Capabilities
Cannabis oils and extracts have already exceeded flower in revenue. In addition to commanding higher margins, oils and extracts
are more palatable to consumers that aren’t interested in smoking cannabis. The launch of edible and beverage products in October
could accelerate these trends and make specialty extract even more important for licensed producers that want to keep ahead of the
latest industry trends.
Westleaf has a 60,650 sq. ft. processing, extraction, and manufacturing center under construction; the company recently renamed
the facility The Plant by Westleaf Labs after buying out Delta9. Designed by a team of experts in supercritical CO2 extraction, the
state-of-the-art facility will focus on developing a diversified set of SKUs targeting multiple cannabis markets. The Company will
initially focus on oils, tinctures and gel caps and when legal, vape pens, edibles and topicals.
These extraction capabilities could put the company on-par with MediPharm Labs Inc. a $273 million public company, and other
extraction companies in the space.
Premium Retail Strategy
Many licensed producers haven’t focused on branding given the shortages in the market, but these dynamics will change as supply
and demand evens out. Controlling brands and the retail experience will be essential for setting products apart from competitors in
the market. Few companies have established a strong retail presence in Canada, and even fewer have managed to create distinct
brands that resonate with consumers.
Westleaf has developed a premium retail portfolio under the Prairie Records brand with more than 50 locations set to launch in
2019 and 2020 across much of Western Canada. By marrying the instinctual ties between recreational cannabis and music, the company
aims to create a unique and engaging retail experience. The company is launching its ecommerce platform to sell online in
Saskatchewan in February.
The company’s premium retail approach is comparable to Fire and Flower Inc., which operates a retail chain offering cannabis
products and accessories. With $10 million in revenue between October 2018 and January 2019, Fire and Flower’s success underscores
the potential for large-scale retail operations in the cannabis industry.
The Bottom Line
Westleaf Inc. (TSX-V: WL) has already secured funding for the cultivation and processing
projects using a combination of senior debt and equity. By taking this approach, the company has a lower cost of capital than
competitors and limits dilution for shareholders. Investors may want to take a closer look at the stock given the company’s unique
vertically-integrated approach, significant operational progress, and its low-cost financing approach.
For more information, visit the company’s website or download their investor presentation.
Please follow the link to read the full article:
https://www.cannabisfn.com/westleaf-a-truly-vertically-integrated-cannabis-play/
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Westleaf Extraction Facility
The Plant by Westleaf Labs