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Invictus (GENE) Sets Sights on Overseas Expansion, Continues to Land Top Leadership Talent

Invictus has been positioning itself as a diversified and fully-integrated cannabis company catering to both the promising medical and recreational markets.

The cannabis industry continues to melt upward, most recently thanks to Canada’s legalization of recreational marijuana this week, an event many on both Wall Street and Bay Street had largely been watching closely. The landmark decision is expected to spark a prodigious market in Canada, forecasted by New Frontier Research to grow nearly five-fold from C$1.7 billion in 2018 to C$7.7 billion by 2025.

With that, Health Canada is bullish on cannabis demand. In April, the agency forecast domestic demand to reach 1 million kilograms (2.2 million pounds) by the end of the year, implying a shortfall of approximately 700,000 kilograms considering production in April stood at only about 300,000 kilograms.

Against that backdrop, Invictus MD Strategies Corp. (GENE:CA)(IVITF) has been positioning itself to be not only a leader in the cannabis production space, but a diversified and fully-integrated company catering to both the medical and recreational markets. White Rock, British Columbia-based Invictus owns and operates two cannabis production facilities, both with sales licenses, under Canada’s Access to Cannabis for Medical Purposes Regulations.

In West Central Alberta, Invictus owns 100% of Acreage Pharms, a company now accepting patients and processing orders for medical cannabis. In and around Hamilton, Ontario, the company owns 50% of AB Laboratories, which is currently selling its dried cannabis flower to Canopy Growth (WEED:CA)(CGC), and of AB Ventures, the owner of 100 acres of land planned for future cannabis cultivation.

Last month, Invictus added to its portfolio, pending a binding letter of intent to acquire a B.C. licensed producer applicant with two locations and 32 acres of buildable land. One of the facilities, called “Delta Facility,” is a state of the art, production and research facility expected to receive its license in the coming weeks. The other is awaiting the green light from Health Canada to construct a 50,000 square foot state of the art, purpose-built indoor facility, dubbed the “Mission Location.”

Construction is ongoing at the Invictus facilities and remains on-track for the company to have 330,000 square feet of cannabis production capacity by the end of this year and 820,000 square feet of capacity by the end of 2019.

The business development plan includes building a retail presence in addition to wholesale operations and soon launching the world’s first zero-cleaning vaporizer systems through its 100% owned subsidiary, Poda Technologies.

Strong Leadership

These fundamentals have attracted top talent to the leadership team at Invictus. Music and marketing magnate, one of the founders of the seminal rock ‘n’ roll band KISS, Gene Simmons joined Invictus in March as Chief Evangelist Officer. This month, the company said that communications and government relations expert Jessica Martin is coming on board as Vice President, Public Relations and Regulatory Affairs, effective July 2, 2018.

Martin may not be a household name like Simmons, but what she brings to the table is invaluable, as she’s been involved with the legalization of cannabis in Ontario since inception. She was the former Press Secretary and Senior Advisor to Ontario’s Minister of Finance. There she led the development and execution of Ontario’s communications strategy for cannabis legalization, participated in excise tax negotiations at Federal, Provincial, and Territorial Finance Ministers meetings in Ottawa, and worked with the Liquor Control Board of Ontario to deliver the branding and retail model for Ontario Cannabis Stores.

“Jessica’s thorough understanding of the strict regulatory environment around cannabis legalization, combined with her extensive media network, will provide exceptional value for Invictus as we look to build our brand,” said Invictus Chairman and CEO Dan Kriznic in announcing Martin’s new position.

Martin is a natural fit to Invictus given not only her background in cannabis regulations, but also media. Previously, she was the spokesperson for Toronto Hydro and the Toronto Transit Commission, where she provided live updates on City TV’s Breakfast Television, CP24 and 680News. Elsewhere, she worked as a Research Analyst at Queen’s Park and Floor Director at City TV.

Through Canada and Beyond

On Tuesday, Invictus made its intentions clear to establish an international footprint by signing a non-binding letter of intent to sell dried cannabis to a German importer and distributor of medical cannabis. The name of the importer is remaining undisclosed until a definitive agreement is signed, according to Invictus. Per the LOI, Invictus has agreed to sell 1,000 kilograms of dried cannabis flower per annum at a price of $6.50 per gram.

Some simple math (there are 1,000 grams in a kilogram) shows that agreement has an annual value of $6.5 million to Invictus.

The sales volumes for the second and consecutive years will be defined in a definitive offtake agreement.

While names were confidential, Invictus said that the buyer has a “vast distribution network of 20,000 pharmacies and a clear focus on product marketing and professional education.” The importer’s seasoned management team, made up of medical professionals, experts in pharmaceutical regulations and entrepreneurs, led an international joint venture successfully to the final stage of the German tender for domestic cannabis production.

Separate from the offtake agreement, Invictus and the importer are collaborating on the potential of securing a cultivation license in Germany.

Invictus noted that each company has to obtain various licenses in order for the deal to come to fruition, including export and import permits and EU-GMP manufacturing certification.

“We continue to explore opportunities for sales and distribution beyond our nation’s borders to countries, like Germany, that welcome legalized medical cannabis products,” Kriznic said. “These new relationships will diversify our operations and further allow us to become Canada’s Cannabis Company, and beyond.”

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