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LGC Capital Ltd (CVE:LG) CEO on EasyJoint Acquisition

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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.

LGC Capital Ltd (CVE:LG) (OTCMKTS:LGGCF) CEO John McMullan and EasyJoint Founder Luca Marola provide details of LGC’s partnership with EasyJoint, an Italian cannabis company. LGC Capital is a cannabis production operator with facilities around the world and a roster of established cannabis brands. THC isn’t legal in Italy but there is a healthy market for CBD products, which are legal. As a result, EasyJoint started as a producer of CBD branded products, such as tinctures and oils. 25 percent of EasyJoint’s products are sold online and the company’s products are in over 450 retail stores throughout Italy. McMullan outlines LGC Capital’s international strategy, including the company’s plans to offer over 150 different products to consumers.

Transcript:

James West:   Hey, welcome back again. My guests in this segment are John McMullen, who’s the CEO, and Luca Merolla, who is the founder of EasyJoint. John’s the CEO of LGC Capital, trading on the TSX Venture under the symbol LG. Gentlemen, thank you for joining me today.

John McMullen: Thank you for having us. Good day.

Luca Merolla: Hi.

James West:   Yeah. So, John, why don’t we start with an overview of LGC Capital: what’s the business?

John McMullen: The business is simple: we have partnered invested with domestic operations globally, in Jamaica, Australia, Italy, and also in Geneva, plus, as we also have an operation in Montreal, Canada. So we have operations growing and producing cannabis and cannabis life products throughout the world, with brands such as EasyJoint, now, with our partners which we’re very proud to be partners with now, and Verity in Geneva, and we also have brands coming out of Jamaica.

So very exciting business happening.

James West:   So you’re in the business of selling marijuana?

John McMullen: Yeah, that’s pretty much it.

James West:   That’s great. So Luca, tell me about EasyRoll and how you came to found it, and what kind of market share of Italy’s cannabis market do you have?

Luca Merolla: Yes, Italy is not legal to sell marijuana, so 18 months ago we started with another business. We sell, we usually sell CBD flowers, hemp flowers, or cannabis flowers, without the THC, but with a high level of CBD or cannabidiol. And now in Italy was born a new market, and this market is not only a market for Italy, but in all over Europe, other brands are starting this kind of market.

John McMullen: Hmm, interesting. So Italians now can enjoy CBD cigarettes to smoke?

Luca Merolla: Exactly.

James West:   Oh, okay.

John McMullen: The product has been sold in Italy since 2013. So it’s a established market.

James West:   Interesting. Okay, and so what is the path until Italy becomes legal for – is it legal, is THC legal as a medicine at this point?

Luca Merolla: Medical cannabis is legal now in Italy, but only the state can produce it and sell it through the pharmacies. Our kind of marijuana is not medical cannabis, of course, but the cannabinoids which are present in it can have an interesting effect for the people. For example, anxiety, insomnia, and so on, with the CBD that is not illegal, is a good stuff to –

John McMullen: The product line that EasyJoint carries is also flowers, but also tinctures and drops that are sold. And if anyone goes to easyjoint.it, they can actually see a complete line of products are being sold. EasyJoint’s products are sold in over 450 locations throughout Italy, including 11 flagship stores, and with that, 75 percent is sold throughout the stores in its chains, but also 25 percent online. So if anyone wants to learn more about EasyJoint, we welcome you the opportunity to take a look at their website and see the impact that Luca and his team has put on the cannabinoid business in Europe.

James West:   Sure. Okay, so John, tell me, LGC seems to be making some moves into, you know, every time I turn around there’s a new press release about a different country. What’s the global strategy?

John McMullen: The global strategy is to be working in domestic – we’re going to partner as we have shown to the market to date, partner with domestic operations globally, and then we’re going to cross-breed all of the brands that are being created in those respective countries, collectively amongst all the parties. So we’re going to be providing over 150 products to consumers globally, because the consumer has to have a choice in what they can consume and what they can enjoy, both medically and recreationally, and especially recreationally in Italy for today.

But as borders open, as more countries come online, you’re going to see LGC expand, and that really is our goal here, is to have as much of the market as possible, especially in Europe, because when you look at the European market right now, if you see what’s been the reports out there, people look at the United States market being valued at about 75 billion; we’re looking at close to 100 billion valuation for the European market. And being there for the last two years, working on these deals, finding people like Luca, joining everyone together, it’s been an incredible journey, but we’re far from finished. And frankly, as I was speaking to some people here at the MJ Business Conference last night, we’re not in the first inning for LGC or second inning; we’re actually in the first few hours of the game, and you’re going to see a lot more opportunity come through the doors, and our shareholders will be well-rewarded.

James West:   Okay. So tell me, how much money has gone into LGC to date, and how many shares do you have outstanding?

John McMullen: To date, we’ve done three raises. We’ve raised $15 million, but with that we had some warrants that brought in another 5 million, so we’ve collected 20 million in total. We have 380 million shares outstanding, of which 30 percent is held by management, but when we have partnerships, because we do cash and share deals, the partners end up becoming very good shareholders. On top of that, with our close friends and associates, I can say that 40 percent of the stock is actually in friendly hands; the rest is retail and institutions around the world.

James West:   Wow, that’s great. Okay, so then, in terms of raising, you know, raising the capital you need to execute on your business plan in its entirety, do you need to raise more money, or are you much going to be able to finance growth out of cash flow?

John McMullen: We’re not in the mode to raise money at this time, and we are looking at cash flow, because LGC does deals whereby we do a cash and stock incentive, and if you look at some of our projects, we actually have a royalty on a number of these companies, so that as they create income, such as EasyJoint, that royalty will be coming to LGC. So that’s where we’re having one mode of cash flow into the company right away.

James West:   Okay, so there’s some additional markets opening up in Europe, and from where we sit over here it’s hard to keep track of what’s going to be next. What are the next countries in Europe that are going to become legal, that have big populations?

John McMullen: Well, it’s interesting. Poland’s been out there on the medical side, there are over 300,000 patients in that country; that’s very interesting. We also, at the Jamaican Conference, the CannEx Conference, the Mexican representation was excellent, and they’ve been reaching out to us as well. I think that’s an excellent market as well, but I think the world has to take a real hard look at the incoming president and one of his ministers has obviously put forward medical and also recreation. So the world is opening up, and obviously we’d like to be there, and we are getting approached as a company, because as you bring good people to the table, it draws more high quality companies to talk to.

So there’s going to be a lot more, and you’re going to have to just wait and let us come out and tell you which countries are going to be next. But it’s out there.

James West:   Okay, well, that sounds great, guys. We’re going to leave it there for now; we’ll come back to you in a quarter’s time and see how you’ve progressed. Thanks for joining me today.

John McMullen: Thank you very much.

Luca Merolla: Thank you. Ciao.

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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