VIVO Cannabis (CVE:VIVO) (OTCQB:ABCCF) CEO Barry Fishman visits James West in the Midas Letter studio to discuss the company’s rebranding from ABcann Global to VIVO Cannabis. The rebranding consists of a new medical brand, Beacon Medical and two adult-focused recreational brands: Fireside, a social brand, and Lumina, a wellness brand. Fishman outlines how VIVO’s potential acquisition of Canna Farms, based in British Columbia, triples VIVO’s capacity and patient count. The pair discusses how the deal has positively impacted VIVO’s stocks in relation to the general trend in the cannabis sector and its role as a provincial supplier of cannabis.
James West: Hey, welcome back to Midas Letter Live. My guest in this segment is none other than Barry Fishman. He’s the CEO of VIVO Cannabis. If you don’t recognize the name, there’s a reason for that. The symbol is VIVO on the TSX Venture. Barry, thanks for joining me again.
Barry Fishman: Nice to be here.
James West: Okay, now, VIVO Cannabis is a new company, isn’t it?
Barry Fishman: Well, it’s pretty new! We just announced it last Friday.
James West: Well, that’s great.
Barry Fishman: So let me tell you a little bit about the rationale for the change.
James West: Okay.
Barry Fishman: We’ve had a very busy few months. We’ve changed the team, we’ve upgraded a lot of our grow technologies, we have expanded Harvest Medicine, our medical clinic. We’ve rolled out new recreational and medical brands, and we thought it was time to revitalize the company and call it a different name. Abcann didn’t mean anything; VIVO means living, it means alive, it’s a very positive connotation. So we’re excited for the future, and we’ve renamed the company Abcann with a ticker symbol VIVO.
James West: I love the name.
Barry Fishman: Thank you.
James West: I love the name, because right away, it does suggest and imply life and living and just something about two Vs that close together is exciting. [laughter]
Barry Fishman: It’s positive. It’s very positive.
James West: Yeah, okay. So tell me about some of the bigger changes that you’ve made.
Barry Fishman: Yeah, well, I don’t know if you’ve kept track of the news; we first launched a new medical brand called Beacon Medical.
James West: I saw that.
Barry Fishman: And the positioning behind Beacon Medical, it’s a very professional brand, it’s education focused, it’s focused on helping patients navigate using cannabis. And we think that we’re differentiating ourselves, because we’re very focused on medical along with adult use. And over the last couple of weeks, we introduced two new adult-use brands, the first one being Fireside, which is a social brand: being around a campfire, enjoying good times, and it has a great feel to it, great logo, and specifically targeted to gain customer loyalty in this emerging adult use segment.
And then just last week we introduced our second recreational brand called Lumina. Lumina is targeted on wellness, relaxation, mind and body, making sure that people have an experience that is positive for them.
So we now have three brands: Beacon Medical, Fireside being our social brand, and Lumina being our wellness brand. So we’ve got nothing but great feedback from people. They love the names, they love the logos, they love the package design. So, super kudos go out to the VIVO Cannabis team for designing something that I think will really resonate with people.
James West: Yeah. I love the clarity between each of the sort of silos: the adult-use recreational, adult-use wellness. Now, is there a connotation that the Lumina brand has more of a CBD sort of complex associated with the product line, and Fireside more of a THC, or that’s just my imagination at work?
Barry Fishman: Yeah, well, I would say the first thing is, we’re not launching any dried flower in our Lumina brand. It will be exclusively oils: premium oils, lotions eventually, creams, essential oils. Products that would appeal to the health and wellness sector.
On our Fireside brand, we’ll have a whole spectrum of new products that will cater to the social user. So they’re very, very distinctly positioned. We did a lot of research. We interviewed about 1,500 people in various segments, and we determined, really, to split the entire cannabis sector in Canada into three distinct sectors: one being wellness, one being social, and one being medical. So very clearly differentiated, very clear positioning, and our marketing materials will reflect that, as well.
James West: Okay. Now, you’ve also made an acquisition: you acquired Canna Farms in BC.
Barry Fishman: Yeah. We’re very excited about that. Canna Farms is an outstanding group of people, privately held BC organization, positive cash flow, great reputation on Facebook and social media. One of the best ratings of all LPs.
James West: Oh, okay.
Barry Fishman: So we’re very excited, hopefully by the end of the month, to welcome Canna Farms into the VIVO Cannabis family. So, really excited about that.
James West: Wow. So Canna Farms already has its own patient trapline and distribution channels?
Barry Fishman: Absolutely. They actually triple our capacity, triple our patient count.
James West: Wow.
Barry Fishman: And we’re both expanding. Canna Farms is expanding their cultivation facilities in Hope, British Columbia, and we’re expanding our cultivation facilities in Napanee, Ontario.
James West: Okay, Napanee. All right, we’ll have to come and visit with a film crew.
Barry Fishman: Absolutely, anytime. You’re always welcome.
James West: Napanee in August is the best time to go, from what I understand. Now, it’s had a really positive effect on the share price; I mean, in contrast to other charts we’re seeing in the cannabis sector, which are uniformly drifting lower, you’ve tacked on 50 percent in the last weeks.
Barry Fishman: Yeah, there’s nothing better than looking at the charts at the end of the day and noticing that your company is on the top of the list as far as increases in that specific day. So we’ve had a couple of those; we’re very excited about it. We’re also very excited, at the end of the month, to integrate Canna Farms within the fold, and that will certainly take us to the next level. So, very exciting times. The team at both VIVO and Canna Farms are extremely excited about it; we think our new brands certainly provide us with a great ability to grow into the future, obtain customer loyalty, and make a mark for ourselves in this really super competitive industry.
James West: Sure. Okay, so, apart from your medical mail-order business, which is still restricted to mail order at this point, how will consumers access or get the Fireside and Lumina products?
Barry Fishman: Yeah, well, we’ve publicly announced that we have an agreement with the Alberta government.
James West: Okay.
Barry Fishman: So we’ll be a supplier in Alberta, along with, we’re in negotiation with a number of other provinces as well. So we do hope to have very wide distribution across Canada, and it’s a starting point for us. As we expand capacity, we will ensure that there’s demand to fill that extra capacity. So at the end of the year, we’ll have about 12,000 kilos of capacity, quite a nice number, and by 2020 we expect to have 57,000 kilos of capacity, combined VIVO and Canna Farms, which will make us a great niche competitor, and we’re very excited about that. Not only in Canada, but we’re also looking at great opportunities in Australia and Germany.
James West: Ah. I was just about to ask you about an international strategy. So you’ve already got stuff going in Germany and Australia?
Barry Fishman: Yeah, James, we have employees on the ground in both countries. We have a pain study that we’re expecting to start in the next few weeks in Australia, so that we will have kind of one patient at a time. It’s a slow-growth market, Australia, but we believe it has a lot of potential.
And then in Germany, we’ve selected a contract sales organization to help us sell our products. We’re awaiting our distribution license any time now, certainly by the end of the year, and we will participate in the next tender round to become a cultivator for the German market. And Germany is actually a stepping-stone for the EU, which is a huge market and a great opportunity for us.
James West: Yeah. So tell me: is the progress legislatively throughout the Eurozone, is it moving towards embracing a medical cannabis strategy? Is it moving towards embracing both medical and recreational, or what is the status there, and what’s the progress?
Barry Fishman: Yeah, so James, at this point in time, we really think that the EU is focused on medical cannabis. Germany is taking the lead; not too far behind are countries like Italy, Spain. Recently the UK announced their intention to enhance their market, as well. But we believe that the best foothold for us is to establish a solid platform in Germany and then expand from there.
James West: Okay.
Barry Fishman: So, excited about that, too.
James West: Yeah, no doubt. Okay, great. Well, so then, how’s the – what’s sort of the financial condition of the company at this point? Do you have all the capital you’re going to need to get to profitability, and when does profitability happen for you on the timeline?
Barry Fishman: Well, we certainly over the last six months or so built up a very healthy balance sheet. We have about 130 million; once we acquire Canna Farms, we’ll have about 110 million in cash. Not all of that cash is allocated; partially allocated to our expansion plans as far as growing cultivation. But we certainly have un-allocated cash. We’re looking for product development partners, we’re looking for supply chain partners, we’re looking for retail partners. So we’ve got a lot on the go. The team has never been busier, but also, the team has never been more motivated to make a difference in this really exciting medical and recreational cannabis business.
James West: Well, great, Barry. What are the main catalysts in 2019 that investors can look forward to that are representative of you delivering on your business plan?
Barry Fishman: I actually think the main catalysts will be execution. We have a great plan; we have a solid vision. We know where we want to go, and I think now the team is ready to execute. And in this business, I think investors need to look for companies that have the ability to execute, and a proven track record of execution. So we’re priding ourselves on our ability to execute, and focus on execution, while at the same time building a platform for growth in the future.
James West: And that’s borne out by the chart.
Barry Fishman: Yeah, so we’re looking forward to that, thanks.
James West: All right, Barry, that’s great. We’ll leave it there. We’ll come back to you again soon – thank you very much for the update!
Barry Fishman: Thanks, James. Appreciate being here. Thank you.
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