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VIDEO: MPX Bioceutical Corp (CNSX:MPX) CEO on iAnthus Capital Holdings Inc (CNSX:IAN) Merger

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

MPX Bioceutical Corp (CNSX:MPX) (OTCMKTS:MPXEF) (FRA:5CB) CEO Scott Boyes shares details of the company’s merger with iAnthus Capital Holdings Inc (CNSX:IAN) (OTCMKTS:ITHUF) (FRA:2IA). Boyes states that iAnthus will focus on the US market while spinning out Canadian and European assets to a new entity controlled by MPX. Boyes believes the growing interest in cannabis among Europe’s 600 million people represents a tremendous opportunity for the company. The leadership group intends to take the new entity public as soon as the iAnthus deal is complete in January. Boyes reveals that the company has already created MPX International, which starts with $4 million in seed money as a result of the merger, and the company plans to do a financing round in the near future.

 

Transcript

James West:   Welcome back! My guest in this segment is Scott Boyes. He’s the CEO of MPX Bioceutical Corporation, trading on the – or should I say, once traded on the CSE under the MPX. Now, this merger that we were talking about, Scott, with Hadley and iAnthus, does this mean there’s going to be two separate companies?

Scott Boyes:  Yeah. We’re spinning off the Canadian asset. So we have a Canadian license here, we’re working on another facility up in Owen Sound. So Hadley and the group will focus totally on the United States; they’re US-centric, and that’s where they want to focus. So we’re going to concentrate on some products in the Canadian market, although we still – we don’t intend to compete with Canopy and Aurora and some of the big boys. A couple of niche markets.

And then I’ve spent a lot of time in Europe, the last two or three months – as you know, we raised a significant amount of capital there. And the European market is kind of where the US market was from the capital markets perspective, and even from a consumer acceptance level, where the US was three or four years ago.

So there, there’s 600 million people that are just coming onto the cannabis scene; we think that represents a huge opportunity.

James West:   Without buffoons at the top to derail any logic as far as getting it de-prohibited federally.

Scott Boyes:  Well, they have some of those over there, too.

James West:   Okay, well that’s good. It wouldn’t be fair if they didn’t.

So then, iAnthus is buying all the shares of MPX Bioceutical?

Scott Boyes:  Correct.

James West:   Then, as part of that transaction, they’re spinning out the Canadian assets and the European assets to a new entity, which will be private, initially?

Scott Boyes:  We’ll take it public, quickly.

James West:   You will take it public? Ah, okay. So that’s great.

Scott Boyes:  In fact, we intend to have it public by the time we close the iAnthus transaction.

James West:   Really? I was going to say, this is great news, because finally I get to participate in your company at the entry level, and now you’re telling me that I’m already late!

Scott Boyes:  And so will all the existing MPX investors, because they get shares in iAnthus as part of the transaction, and they also get a share in the new entity, as well.

James West:   Yeah, so that’s quite a lift from where you were. I mean, it’s, I obviously thought that MPX would one day grow to be a much bigger company; you’ve sort of been taken out of that mix, but now you’ve got a chance to sort of refocus the portfolio and develop it with some more specific –

Scott Boyes:  You know, we were kind of in a rut, and the GTIs and the MedMen of the world that have kind of emerged out of the US landscape. And iAnthus, quite – and MPX were both kind of being left behind. So in order to create the greatest advantage for the shareholders of both companies, a merger of some sort just seemed to be the way to go. And it creates a company with a $1.2 billion, $1.3 billion market cap, and allows Hadley to go forward and raise capital from institutional investors and so forth.

It was a good deal for shareholders on both sides.

James West:   Right. So how many shares will MPX end up owning of iAnthus?

Scott Boyes:  So it’s a ratio of 1.65 to the iAnthus share.

James West:   Okay, okay. So that’s, yeah, that’s too difficult math for me to do on the spot without a calculator [laughter]

Scott Boyes:  Well, the number of shares will depend, too, on the share price of iAnthus at the time of close.

James West:   Okay. So the European strategy, then, sounds like where the main focus is going to be, with a bit of Canada involved?

Scott Boyes:  Well, Canada because we have the Panaxia relationship for Canada. So we will develop that here as well. We have the Salus biopharma brand, we’ll continue to create that. Some of the international play will be able to bring in some hemp oil for CBD products, and cannabis oil, bring it in from the Third World; we’re looking for some Third World sources now. Further refine it here in Canada, distribute it to the US market, or I’m sorry, to the Canadian market, and then distribute it internationally, as well.

But we’re also looking at some opportunities in the UK. We’ve developed quite a – in the UK, and in the EU, we’ve developed a bit of a pipeline over the past couple months.

James West:   Really? You sound pretty, sort of, excited about that.

Scott Boyes:  Well you know, I was over there three or four weeks ago, and who would ever have known that the Swiss market alone, hemp pre-rolls, with 1 percent THC content, is a $1 billion business? In Switzerland? So if you take that and you advance, look at the CBD market and eventually the full cannabis market over the whole continent and the UK, it’s a massive market. It’s going to be larger than the US and Canadian markets put together.

James West:   Wow.

Scott Boyes:  And we also have a license application in Australia that’s pretty well advanced, and they’re looking to export to other countries as well.

James West:   Wow, fantastic. Okay, so then, what are the big firsts – I mean, apart from concluding this transaction, what are the big next steps for this new entity that you’re going to be heading up?

Scott Boyes:  Well, concluding the transaction is going to take a lot of work. It’s probably going to be January before we see it close, at the earliest.

James West:   Sure.

Scott Boyes:  But we’ve already created the, we call it MPX International, MPXI. It’s been created. We’re going to get some seed funding into it initially; it starts out with $4 million USD as a result of the transaction, but we’ll go out and raise some capital, get it listed probably on the CSE, and be ready to move forward with a full business plan that we’ll talk about a little bit later on.

James West:   Right. Is it your opinion that the EU will go completely recreational and medical in due course?

Scott Boyes:  You know, look what happened in Florida with CBD only, and then it’s a little more medical, and then the medical opens up, and then eventually it’ll go rec. And I see this same kind of process happening in the European countries.

But then again, I was in the UK in May; we hosted the Cannabis Europa conference, we were one of the sponsors. And the panel there talked about it being, going medical in the UK in two years. It’s going medical November 1st.

James West:   Right, right.

Scott Boyes:  Under some limited scales, and it’ll just advance. And I see the same process that’s happening there. But it’s key to get in and get an installed base; you need a presence.

James West:   Yeah, show me a British politician who runs on a pro-cannabis, anti-Brexit platform, and I’ll show you the next Prime Minister of the UK.

Scott Boyes:  That’s probably true.

James West:   So who do you think – you know, in the North American matrix, and actually globally, Canada is the leading sort of standards definer in the industry. Who would you say that is currently in Europe?

Scott Boyes:  It’s hard to say. Germany, of course, has got a program, but everybody’s trying to run in there and fill it out; Malta is emerging as a key producer. It’s not easy to get a license there, but you can get a license, and they’re part of the EU, so that would allow them, as a low-cost producer, to move into the EU.

We’re seeing some of the Eastern European countries now are coming out with – we were actually interviewed by a group from Montenegro that want to develop facilities there.

So anybody that’s got EU access, you’re going to have programs. Spain has already advanced.

When we were at the Cannabis Europa conference in May, there was 30 countries attended that conference. So you can just see how quickly the whole thing is emerging globally, not just…and Canada set the pace, and it’s probably accelerated the pace.

James West:   Sure. So what’s the total market size population-wise of the area you’re targeting, there?

Scott Boyes:  It’s about 600 million.

James West:   600 million. So in fact, when Americans say that America is the largest market, it’s actually the European Union?

Scott Boyes:  America is the largest quasi-legal market, but I’m sure the preponderance of cannabis in the UK and in EU is as large as it is in North America – maybe even larger, in some cases.

James West:   Sure. You bet. So should I buy MPX shares today, or should I buy iAnthus shares today, or should I buy both? Like how, as an investor hearing about this, I’m loving both companies, what should I do with my money?

Scott Boyes:  I think you could buy either share and you’re going to benefit from it, because the companies are going to emerge together. It will be a combined entity; it’ll move together, the integration will be very quick. They’ve got their management teams, we have our management teams. They’re East Coast-focused, we were West Coast-focused, although we were moving into the East Coast. They will really be a national company, now.

So buy iAnthus shares, buy MPX shares, you’ll win on both sides.

James West:   Yeah, right. Okay, that’s great, Scott. We’ll leave it there for now; congratulations on the combination, and we’ll come back to you soon and hear more about this new entity.

Scott Boyes:  Thanks, James.

James West:   Thank you.

Scott Boyes:  Great to see you again.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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