The Canadian Prime Minister Justin Trudeau continues to pledge that Canada will be the first industrialized nation with legalized marijuana. Recently, he doubled down on his government’s plan and says the regulations will be finalized in July 2018. Before this political tailwind, medical cannabis cultivator Beleave, Inc. (BE:CNX)(BLEVF) is aggressively executing their business model. The company is one of the select few licensed cannabis producers in Canada, and is focused on providing standardized, high-quality cannabis to serve as the foundation for better scientific and medical research for new treatments.
Recently, the company announced a number of key developments, including the appointment of Andrew Wnek to CEO. Wnek is an experienced leader with retail and profit industry experience, which fits well with Beleave’s commitment to vertical integration and growing its distribution channels.
“I am excited to join Beleave as chief executive officer,” Wnek stated in the announcement. “The organization has an outstanding management team and is well positioned to have an impact on the cannabis market with expected changes to government legislation and our continued focus on innovation, scientific research and the production of high quality product.”
In a corresponding appointment, Beleave also announced that Dr. Roger Ferreira, one of the co-founders of the company, would assume the role of Chief Science Officer. Dr. Ferreira has been instrumental in securing the company’s Access to Cannabis for Medical Purposes Regulations (ACMPR) license, and will now serve to be the company’s driving force in research and development.
“I am pleased to focus my efforts as the Company’s Chief Science Officer, as in the coming years, we are gearing up for some exciting new work in cannabinoid food and drug delivery systems to accompany our extraction IP,” Dr.Ferreira stated. “We plan to further our work in drug development for the current medicinal market, as well as for food development for the upcoming adult recreational market.”
Fresh Funding for Beleave
Secondly, the company also recently announced that it had finalized an agreement with Cannabis Wheaton, a pioneering cannabis streaming company, to receive $10 million in financing. Beleave, along with its wholly-owned subsidiary Beleave Kannabis Corp., will use the proceeds to complete the expansion of the company’s state-of-the-art facility in Hamilton, Ontario. Canabis Wheaton will give Beleave $10 million in non-dilutive debt financing by way of an unique instrument evidencing a debt obligation repayable in product equivalents, or also known as a DOPE note.
“We are excited to announce this innovative financing instrument that will help our streaming partner Beleave achieve the non-dilutive capital they seek to further its objectives,” Chuck Rifici, Chief Executive Officer of Cannabis Wheaton, said. “The Cannabis Wheaton team is constantly looking for creative solutions to provide additional value to our streaming partners and we view the D.O.P.E. Note as another tool for the company to utilize in furtherance of that goal. It was a pleasure working with the incredible group of industry professionals who form the Beleave team to develop this industry-first D.O.P.E. Note. We view this transaction as the first milestone towards a long working relationship as we move forward to the larger, previously announced streaming transaction with Beleave to finance the build-out of a third proposed production facility and add further scale to the Beleave platform. We fundamentally believe this transaction is accretive to both our shareholders as well as Beleave’s shareholders and it will result in a true win-win.”
The deal itself comes at a perfect time for Beleave.
“Everyone at Beleave is thrilled to embark on this new partnership, and we expect it will yield outstanding results for all sides, remarked Bojan Krasic, Chief Financial Officer of Beleave. “It was a truly enjoyable experience working with an incredibly diligent and forward-thinking team at Cannabis Wheaton on this transaction.”
Already Prepared for Production
This financing arrives on the heels of some huge milestones. In May, Beleave was approved for its ACMPR and without wasting any time completed its first harvest at the Hamilton Facility in September, which happened to be the same month the company started trading on the OTCQX. So, the financing puts the company on-track for commercial-scale production at their 14,500 square-foot facility that is expertly outfitted for high-quality cannabis growing. Currently, the company has said it can produce 550,000 grams of product annually once licensed. Beleave’s future agenda includes adding another 70,000 square feet of production space at the property.
The facility’s floors and walls have been covered with anti-microbial, abrasion proof, anti-moisture, non-toxic, microbiocidal, non-leaching, flame-retardant and non-slip material to ensure a safe work environment and a healthy product free of contaminants. The company’s leadership team worked together to build a facility prepared for integrated and high-level production.
“Our facility is now in full production, with plants at each stage of the growth cycle. We anticipate a quick turnaround time between crops,” stated Dr. Ferreira during the announcement of the first harvest. “Furthermore, we have developed quite a bit of knowledge with respect to the strains we are cultivating, and are continually fine tuning our growing practices to optimize these strains for large scale commercial production.”
Beleave’s Committed to Long-Term Growth
Beleave had already looked to secure increasing its production capacity with a deal back in May, which saw them partner with PannCann Streaming Corp. The deal with PanCann is an accretive agreement that would allow the building of a second facility. The company said the proposed second site will be designed to accommodate 200,000 square feet of cultivation space. PanCann will provide up to $5 million to fund the purchase of the second site and all necessary funding to complete the construction of the new facility.
All these events are putting Beleave closer and closer to its goal of being an academic beacon in the growing cannabis sector. This is evidenced in the company’s research project at Ryerson University testing genetic models and genetic traits involved in cannabidiol. The research will be used to help the company design breeding programs that make use of molecular factors and further control the cannabinoid strain production.
While there are droves of upstarts promoting their intentions to capitalize on a multi-billion-dollar cannabis industry, few companies are as commercially prepared and scientifically-organized as Beleave to both actually thrive in the industry and truly help people. This company along with its dedicated leadership is cut from a different cloth.
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