The first and second waves of the cannabis market have come and gone, which has only prepared us for the cannabis 3.0 market and all the derivative products that come with it.
Companies like
Ayurcann Holdings Corp. (CSE:AYUR, OTCQB:AYURF, Forum) are at the epicenter of the third wave of this market thanks to its specialized processing and co-manufacturing of pharma-grade cannabis and hemp products.
Stockhouse Editorial’s Jocelyn Asa recently caught up with CEO Igal Sudman to discuss what the company has been up to and what investors should be watching for.
(CLICK IMAGE TO PLAY VIDEO)
TRANSCRIPT BELOW:
SH: Can we first start off with you providing an overview of yourself and the company?
IS: Sure. So, myself, I'm an entrepreneur for over 25 years in various different industries looking for different opportunities that we can bring value and develop the business from scratch. We've done it both myself and my partner in a variety of different like I said, industries and we feel that cannabis is the way to go now and into the near future. So, we started Ayurcann a couple years ago really to specialize in help cultivators that we felt are really a commodity-based business where we can bring enhanced value. So, we work with different LPs or licensed producers, specifically cultivators, where we take their products, extract it, convert it to oil and put it into cannabis 2.0 and 3.0 products throughout the country. We also work with different brands that want to bring products to market and we work with them in order to formulate produce manufacture, obviously, and distribute throughout Canada.
SH: The company recently announced the buyback of common shares under the normal course issuer bid - can you break this down for our investor audience?
IS: Sure. So, we felt obviously the investor buyback, or the buyback of shares usually entails that the management and the company feel that the value for investors is not there. It's not reflective in the public markets. We feel very comfortable in about what we're doing. We have we're debt free and have been sort of from day one. We are also profitable, which tests to the fact that no other companies can say that in Canada, specifically in the cannabis space and with money in the bank. We felt that that's good use of funds in order to support, not only support the stock but also show that we feel very strongly about where the companies going now, what the company entails, intends to do in the future and how to enhance investor value.
SH: It’s been a bit of a rollercoaster year in the cannabis space, what are your thoughts on the market this year?
IS: So, I agree with you obviously. The last couple years, especially in Canada and worldwide but because we are working in Canada, we tend to look at it more in the micro view. So, the rollercoaster that has been, I think there was a lot of promises that were made that didn't get fulfilled by both financial advisors, I guess or as well as manufacturers. I think that that's getting cleaned up a little bit. The cream always rises to the top and we feel that not only with Ayurcann but also other companies that are sustaining themselves and keeping an eye on the bottom line doing good business and networking in the industry will rise. I think that the ones that overpromised and not delivered are getting punished and the ones that under promised and over delivered are supposed to get rewarded in the long term and that's where we stand.
SH: With so many companies in the cannabis space, what makes a company like Ayurcann Holdings stand out from its peers?
IS: So, like I said initially I think that the first thing is that we don't have any debt. We're running a profitable company that's above and beyond what everybody else has done over the last couple of years, it for sure has been doing now. There are none that I know of, there may be a few that are coming to par. So, the structure that we've put together from day one is geared towards value proposition, low CapEx, very flexible manufacturing capabilities and gaining market share on a continuous basis and we have done that. Our sales are robust and growing profitability and market share brands and awareness is enhanced throughout Canada and right now, I think I just saw a report that we are number three in vaping in Saskatchewan for example, with top sellers in Ontario, New Brunswick, Alberta. We intend to be in BC and Quebec hopefully soon as well. We keep an eye on the bottom line. Everything that we manufacture is value propositioned both for ourselves, as well as the consumer with great product and, and manufacturing capabilities. We feel that the sky is the limit.
SH: Can we talk about your value process and profitability and what the company’s overall business model is?
IS: Yeah, so we have two segments, I guess, that we work with. One is the B2B. So, we, we do Ethanol extraction. Our capacity is probably as large as any of the larger players, but we actually extract about 1000 to 1500 kilos a week of biomass. Ethanol is very efficient. We have about 300 or 400 kilograms of oil or distillate I guess in various potencies available at any one time on the shelf. So, a lot of co manufacturing capabilities that we have enhances the value that we can bring to other B2B partners, right? So, if they need oil for their vapes or tinctures or topicals or edibles or whatever it may be, they call us, we ship it, we can ship it right away, competitively priced and that's one of the models. So, it's really a B2B model. The other one is a white label I guess, or retail component where we work with different brands again because of our I guess vertical integration, we manufacture from A to Z as well as be able to distribute into the boards throughout Canada enhances the value, the brands and what we bring to the table.
SH: I understand that the company is looking to expand its presence across Canada - can you tell us more about this and if there’s a timeline that investors can be watching for?
IS: Yeah, so right now we are in New Brunswick, Ontario, Manitoba, Saskatchewan and Alberta. We're working with, a couple of brands that we're manufacturing for to be in BC, Yukon and Nova Scotia, as well as Quebec. I think Quebec will be sort of the last sort of puzzle piece of the puzzle, but we are in five provinces right now as top sellers. We hope to be over the next two or three months in the additional, BC, Nova Scotia, potentially Yukon as well. So that's full coverage throughout Canada. Like I said in the short term and Quebec up next there and we bring up the production capabilities that we have as needed. We can create different products for the brands as well as co manufacture for other LPs as required our capabilities and capacity is already here and we can do about 300,000 kilos of biomass a year and about 3 to 4 million of field products again. So, cannabis 2.0 3.0 products right now.
SH: Moving into the rest of this year, what are some catalysts our audience should be watching for?
IS: So, we have PR coming out whenever there are new opportunities that we find, and we can enhance value. Everything that we get into has to do with making sure that we are running a profitable business and enhance the value for shareholders as well as for the company. I think that we have multiple skews that are coming on board over the next six months or so cause the structure of how the boards work in Canada is based on the call. So, whenever they ask for new products to be submitted, you submit it and a couple months later they give you their opinion and if there are PO’s they come a couple months later, right?
So, it's sort of a six-to-eight-month process usually but we feel very comfortable with the submissions that we have done so far. We've had some very positive results with the products that already shipping as well as very positive feedback on new products and new skews that are going to be coming over the next couple of months. So, we anticipate that going from, I think we have about over 200 listings, sort of throughout Canada now to potentially 400 or 500 listings like I said this year.
SH: Is there anything I’ve missed you’d like to touch base on?
IS: No, I know that a lot of investors are coming looking for you or for the site to enhance their research. We hope that they will look at Ayurcann our put Ayurcann anyway on their screen. Everything that we've said so far since day one, we under promise over deliver continuously and I think that there is value for the awareness that you can bring to the table for investors in the long term.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.