Get to know a very different kind of vertically-integrated cannabis company that’s an early mover in the Netherlands and Mexico. In today’s StockTalk Learn & Earn Video Podcast, Stockhouse Media’s Dave Jackson was joined by company Director Robert Giustra of
XEBRA Brands Ltd. (
P.XBRA,
Forum) to get our audience up-to-date on this intriguing Cannabis 2.0 play.
(Click image to play video)
TRANSCRIPT BELOW:
SH: We'll make sure that our investor audience is completely up to date on that. Robert, now you recently published a detailed analyst report on your first mover advantage in the global cannabis market. Can you elaborate?
I'm not sure what report you're referring to. I mean, we've been getting a bit of press, but you know, it's all about if you're going to be a public company, you've got to do something different not what other companies are doing. So we endeavor to do that and we're different. We were one of five companies selected in Holland to enter trials for pharma essentially a duopoly on all pharma grade cannabis sold in Holland through the pharmacies. So we beat out much larger, more established companies and we're one of five, two of the five companies will be selected to receive guaranteed contracts over six years by the Dutch government for about in US dollars, $83 million US. So we're just in the process of setting up.
The other way we hope to distinguish ourselves is by being the first mover in Mexico, pretty exciting what's happening there right now, Mexico is legalizing but we've taken a different route. We're not waiting for regulators to pass legislation. We're now in front of the Supreme court, we've argued as unconstitutional not to give us the right to in this case, cultivate, commercialize CBD, and CBG derived from hemp and we're awaiting that outcome.
SH: Stockhouse investors are excited to get up-to-date on your impending stock market listing. Can you tell us where and when…approximately?
RG: Well we've been essentially almost conditionally accepted by the exchange. We're just waiting for the official letter to come by. So there'll be a CSE listing. We're on the last round of comments with securities commission, in summary I expect we're going to be trading on the CSE. We have a stock symbol, and our stock symbol is X B R A month max three to four weeks. We should be up and trading.
SH: You’ve made huge inroads in Mexico. Can you tell our investor audience some of the advantages of setting up shop there?
RG: Well, the first thing to understand about Mexico is there's a lot of misinformation out there. Companies claiming to have something in Mexico, truly they have nothing, nobody has anything in Mexico because the legal framework isn't in place yet in Mexico, but it is coming. So why would you want to be in Mexico? Perfect climate, affordable skill labor, land is very cheap, but the main reason Dave is it's part of USMCA, which we used to call NAFTA. It is part of USMCA and under USMCA, it's our understanding that cannabis is just another agricultural product and there's so much precedent, tomatoes, eating grapes, avocados, almost the majority of those products are now grown in Mexico for all those reasons I mentioned but primarily because it can cross the border duty and tax free.
So that is the advantage of Mexico. Everything I just mentioned but being within the North American free trade zone is a pretty big deal. So our belief is all industrial scale cannabis production is going to go to Mexico. So that applies both to high THC cannabis hemp. We think it's all going to Mexico. We think it's unsustainable to grow in Canada and the United States because of cost and climate and not just like tomatoes and avocados much of that industrial scale production is growing in Mexico. So you can see why we want to be one of the first movers there.
SH: Well, simply put Robert is cannabis legal in Mexico?
RG: So cannabis is in the process of becoming legal and the first step to that was decriminalization, which happened very recently. There is an effort now by the government to put a legal framework in place to fully legalize cannabis. So nobody knows what that final bill is going to look like but there have been a number of bills that have gone back and forth between the two houses. It's just a matter of time before Mexico legalizes. However, we took a bit of a different approach. I think I elaborated a little bit on it earlier but basically what we did is we challenged the Mexican constitution on the basis that it was unconstitutional to deny us the right to commercialize CBD and CBG and it's been almost a three-year process. We are in front of the Supreme court right now and we expect that Supreme court is going to vote on this resolution to grant us essentially what would be for a limited time and outright monopoly on CBD and CBG.
So we are requesting an injunction to be legalistic or an injunction from the Supreme court. It's a highest legal authority as you know in Mexico and what we've asked for is the right to import seeds, cultivate, harvest process, create products, sell those products domestically and export them for sale as well, all under one injunction. We're extremely confident that we will succeed. It's important to understand the history of Mexico very briefly. I know we don't have a lot of time, very briefly wise, Mexico legalizing its legalizing because there's a handful of individuals in Mexico that have gone to the Supreme court with a similar constitutional argument and have obtained injunctions by the Supreme court to allow them to hold small amounts of cannabis, grow small amounts of cannabis for their personal use.
The injunction is very specific to them. So Mexico legalizing this happening, but we've taken the injunction route, which essentially would give us a substantial head start on anyone that would obtain any license to do anything with cannabis under the new legal framework that we know is coming.
SH: Perfect segue into the next question. Moving across the Atlantic, you're focusing as well on the Dutch cannabis market. So why Holland Robert?
RG: Well, it's about being the first mover, again it's about having something that other companies don't have. Contrary to popular belief, cannabis is not legal in Holland. Everyone thinks it is and they have the famous Dutch cafes. The fact is that cannabis ends up on their doorstep at six in the morning and nobody asks where it came from, and the authorities have looked the other way for decades. So the Dutch government is in the process of rectifying that situation as well by introducing a legal framework, they’ve chosen to put trials in place as part of that process, there's a recreational trial and coffee shops and there's a medicinal trial. So as I previously mentioned, we are one of five companies selected, two companies will get a duopoly, all pharma grade cannabis sold through pharmacies in Holland will be produced by the two successful companies. Hopefully Xebra is one of them.
SH: XEBRA has gone all in on Cannabis 2.0, specifically the beverage side of the market. Can you expand on this initiative for our investor audience?
RG: You know, the beverage side of the market? I'm not sure what you want me to say. There it's a big market numbers are constantly being revised as we learn more about demand on all fronts for all cannabis products. We're clearly very excited about I'm not sure it's fair to use the Word 2.0, it might be 3.0, I'm honestly not really sure we don't get caught up in that kind of terminology but there's definitely a room for a beverage player globally that is doing it right. If you take a look at our brands, they are pretty impressive and frankly the bottom line is if you have a cannabis ginger ale it should taste like ginger ale not cannabis, you know Fanta or a Cola or whatever the product might be. So we've cobbled together a pretty interesting list of brands trademarked in over 40 countries, slogans, and formulations. So yeah, bring it on cannabis 2.0, we're ready.
SH: What separates XEBRA from the competition and makes your company unique from an investment perspective?
RG: First mover. First movers everything is absolutely everything. Let me give you an example. Canada legalized, frankly, I think Uruguay may have been first or second. They didn't go very far with legislation. Okay. Canada really is truly the first country to introduce a broad legal framework for cannabis, both medicinal and recreational. Individual US states have as well and Colombia...one of the more recent countries three, four years ago to legalize and I want to use Colombia specifically and we are in Colombia by the way as well. The first three international deals that were done in Colombia, what I mean by that is publicly traded companies in Canada, Canadian-US companies, names you might be familiar with to do deals in Colombia paid 93 million, 200 and I don't know 80 million and 300 million to be the first movers in Colombia. Now there are over a hundred THC licenses, but they wanted to be the first. What do you think a big player will pay to be the first mover in Mexico? That's part of the free trade agreement with a huge consumer market. So it's all about being first mover, that's just the bottom line.
SH: And finally, Robert, if there’s anything I’ve overlooked please feel free to elaborate.
RG: Look, I think Dave, you've done a good job of covering the major basis. We're going to be trading in a few weeks. We're well-funded, we've got a plan and stay tuned.
For regular updates, visit
xebrabrands.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.