48North Cannabis Corp (CVE:NRTH) CEO on Merits of Outdoor Grow

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Midas Letter

The Digital Businesss Channel for Cannabis, Crypto and Technology Stocks.

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.

48North Cannabis Corp (CVE:NRTH) (OTCMKTS:NCNNF) CEO Alison Gordon discusses the merits of outdoor growing. Gordon credits the agricultural experience of Co-CEO Jeannette VanderMarel for providing the company with the knowledge necessary to undertake an 88 acre outdoor grow in 2019. 48North’s outdoor grow is 3 million square feet and will produce 40,000 kilos of cannabis at $0.03 a gram. Gordon believes the current supply shortage will be exacerbated by the legalization of edibles this fall and she sees outdoor growing as a possible solution to this problem. Gordon addresses the potential of biosynthetics to mass produce cannabinoids cheaply, but emphasizes no company has reached this stage. 48North has seen a surge in trading volume and Gordon credits this to the increased understanding of the importance of outdoor growing as a value catalyst for the company.


James West: Joining me now. Without further Ado and with much fanfare is the lovely and talented Alison Gordon CEO of 48 North. Alison!

Alison Gordon: I’m excited. I’m coming back next week to see everybody. You’ve got some big guests on.

James West: Big guests? You mean like tall or you mean like…

Alison Gordon: I mean like big names.

James West: Big names…

Alison Gordon: Everybody better watch. Well, you just like rolled off a list…

James West: Oh but that’s yeah, that’s some of those are a… that’s all starting in two weeks actually.

Alison Gordon: Sorry two weeks from now.

James West: Yes.

Alison Gordon: We will be back.

James West: Yes. Well, you know… How are you? What’s new?

Alison Gordon: Oh my God. What’s not new? Well, it’s very cold.

James West: Yes.

Alison Gordon: Yes, getting very warm. Everything’s going really well. I just saw you out in Vancouver.

James West: Yes.

Alison Gordon: I thought that was all very interesting.

James West: Canaccord Genuity investor day.

Alison Gordon: Yes, with the US companies.

James West. That was fun. You asked a very pertinent and troubling question of a certain company that I really enjoyed hearing you ask.

Alison Gordon: I saw you smiling.

James West: And that was surrounding the quality of outdoor grown and ability of outdoor to yield on a similar scale with indoor operations. If I’m not mistaken.

Alison Gordon: Yeah. Well, I mean, I think that what that person was talking about with their company was there one of their large facilities that ultimately when it’s fully functioning and everything is going well. I think they had said that they would be growing for about 90 cents a gram. Was that around what they were saying? But then they were also talking in their presentation about something I’ve talked about a lot which is the next generation products so that you see, you know, sixty to seventy percent of the sales in the US being thee edibles, the vapes, the creams, the drinks, all of these things.

So, for me I guess you know with 48 North we are we have our application in and we have positive indication from Health Canada for the outdoor grow this summer.

So, to the question that I was asking was how will you compete in the extracted product game if you’re growing at 90 cents a gram? I mean won’t the outdoor be extremely disrupted and I think that you can see that the person was kind of didn’t really quite know how to answer that question.

James West: Not prepared yes. But you own… uhh 48 North…

Alison Gordon: Yes.

James West: Owns Solei, correct?

Alison Gordon: No.

James West: No?

Alison Gordon: We own Good & Green.

James West: Good & Green. Oh gosh.

Alison Gordon: Yes, under VanderMarel’s company who founded the Green Organic Dutchman.

James West: Oh I’m confusing…

Alison Gordon: No, I think Solei is a brand, a sub-brand.

James West: There’s another sun grown cannabis… organic… lady who is out there in our… no?

Alison Gordon: I’m not aware of who you’re speaking of.

James West: Well, you know things are moving so fast in this cannabis space. It’s easy to lose track.

Alison Gordon: It is. Our understanding, I mean again MJ Biz reported that we were according to their sources at Health Canada at that time of month or so ago the first and maybe only outdoor application. I don’t think that’s the case. I do know of a few others.

James West: WeedMD announced that they have an Outdoor grow permitted now with a cannabis license.

Alison Gordon: Okay.

James West: And there’s a couple other small ones. There’s one out in the west coast. What are they called now? They’ve been on the show. Darn it, can’t remember but…

Alison Gordon: There are a few I mean, I think some of the bigger LP’s like CannTrust. I don’t believe Aurora work doing a small. I’m not sure how large CannTrust is. But Aurora, I believe there’s sort of a test run for the outdoor for us because Jeanette has such great experience in agriculture. So, her family was the largest Apple producers in Ontario. So, she’s grown up in large-scale agriculture. That’s been a huge part of her experience.

So, for us we’re going for the full hundred acres. Well, it’s about 88 acres when you take away all the fencing requirements as you can imagine. But the interesting thing James that a lot of people don’t realize is that 88 acres is actually something like 3 million square feet.

So, really you’re talking about an organic farm that we purchased for 1.5 million the operating costs aren’t extensive in any way and we will get forty thousand kilos off that farm. So outdoor will change everything in Canada.

James West: So, will that outdoor product be available in the Cannabis stores the government cannabis stores that are recreational basis, or is it more geared for the medical extraction?

Alison Gordon: Right. So, it will what we are modeling out is 10 percent of the grow for flour and that’s very conservative. I mean, I think you and I have discussed before what some of the product has looked like that we’ve gotten from some of the provinces and doesn’t look so dissimilar from outdoor.

That’s my way of saying that but most of that will be for distillate and isolate and will be extracted. But that’s what the markets going to need. I mean, we’re already in this under supply and then you’re now moving in October to the extracted products the edibles and the vapes and all these things. So how will it happen?

James West: Right, one of our viewers is putting up a comment right now that…

Alison Gordon: Oh my god.

James West: that they’re pointing out how eloquent and knowledgeable you are and you’re great.

Alison Gordon: Thank you. Thank you. That’s nice. Often I’ve come on and I see comments where people say “Outdoor grow? Don’t you know this is Canada?” and it’s like yeah. No, we were well aware. We’re not talking about five crops a year. You’re talking about one harvest season.

James West: and with zero power costs essentially.

Alison Gordon: Right? I mean cannabis is meant to be grown outdoor and you and I’ve talked about organic as well, which is really important.

James West: Indoor-outdoor, which is better discussion is sort of missing the point in large degree because the THC content of any given strain is based on its genetics not on where it’s grown.

Alison Gordon: Well, I don’t know if that’s true. I mean, I think when you grow in door and you can really control the environment you can get higher levels of THC out of the genetics right. So how would genetic express itself if you and I grew from the same sort of seed family. We are not going to grow at the same way.

We’re not going to have the same results. Right? And that’s why you see the LPS have been selling each other genetics since the beginning of this program, but you don’t see every LP having the exact same results so indoor does allow for more controlled environment, but when we talk about taking the crop and extracting from it into the molecular level then you know again, yes, you might need more of the outdoor plant to get what you would get from the indoor, but when you’re growing at 3 cents a gram versus, you know, 90 cents, $1.00, $1.50, whatever the cost to grow indoor. It just does not make sense to use that product for your edibles in your vapes and your topicals or any of those things.

James West: Right? What about the biosynthetics?

Alison Gordon: Well, you always bring this up.

James West: Why I love that discussion because I mean it’s like…

Alison Gordon: Are you… how, have you seen? And I always asked you this that done on a mass scale at a cost effective price because my understanding…

James West: Have I seen it?

Alison Gordon: Yes.

James West: Not as of yet Alison. Not as of yet.

Alison Gordon: Okay. So yes, you’re right. I guess if that comes around but my understanding is for 30 years people have been trying to do that and they have not been able to do it in a cost-efficient way. That’s again. I’m not going to say this is my area of expertise.

James West: Right? Right.

Alison Gordon: But I don’t know if you’ve seen anybody do it in a mass way right? As opposed to just a small.

James West: No, it’s just been done. Well, it’s been being done on an ever larger scale at two locations I’m aware of.

Alison Gordon: And the costs?

James West: Well, the costs are obviously high because they’re in the sort of development phase. So, it’s not like there’s a commercial biosynthetic source of either THC or CBD’s out there yet. However, the companies that have invested in them are you know not guys to throw around money lightly.

And so, I would be surprised given the success that Bioform has had with growing insulin on genetically modified yeast that they don’t replicate the process over time and whereas they may have been working on for 30 years of cannabis only really being legal for the last two years, right? We haven’t had much runway. So, we’ll see. We’ll see. I mean for a premium smoker who cares about biosynthetics.

Alison Gordon: Exactly. I was going to say, there’s the farmer market there’s the therapeutic Market there’s the recreational market so we don’t know. Yes, it’s incredible time. Like we always say could you believe that you’re living through this time where money is just being thrown into cannabis and…

James West: And it’s so and all over the place.

Alison Gordon: But we need you to come like I just see the photo shoot with you with all the Big Trees outdoor like just rolling around in the trees.

James West: This weekend I’m setting up my four pot indoor hydroponic grow.

Alison Gordon: Are you really?

James West: My seedlings are ready for transplant.

Alison Gordon: Okay. What are you growing?

James West: Well right now I’ve got so I’ve got a bunch of clones and I’ve got… now technically I’m breaking the law because they’re clones, but I’m going to obviously kill all but four I’ve got two Granny’s medicine, which is a CBD THC.

Alison Gordon: Okay 1 to 1.

James West: Not quite 1 to 1. I think it’s 20 milligrams of THC or 20 20 percent THC 20 percent 18 percent CBD and then there’s black rhino which is all THC. Early Skunk, which is also an Indica dominant and THC dominant indica, and then the other one is called Granny’s medicine and it’s a very it’s six to nine percent THC six to nine percent CBD. So which I’m growing because this is for me a very lightweight cannabis.

Alison Gordon: You’re basically going to become an LP. I mean, it’s actually quite interesting, no it’s really interesting because for the farm we’ve been looking at which genetics as you said genetics are important. I didn’t want to give the impression that the genetics aren’t important. I just I just mean to say that whether you how you grow it there will express itself differently but thinking about what genetics you are going to grow outdoor.

Like obviously, we have a strong history of outdoor grow in the black market in Canada, but there really is only a few areas in Canada that cannabis can grow really well so our farms in Southwestern Ontario and that’s what they call the banana belt. So anywhere where you see people have grown more of the tropical fruits and in southern BC sort of Delta BC would be the other area. So, what’s interesting is that the latitude of the farm is quite similar to Southern, Oregon.

So, looking and speaking with those growers out there or Northern California about the types of genetics and having the year ahead of everybody else to kind of figure out the farm and how and what we’re going to grow and to be able to phenotype and do that type of research. I think it’s just the most exciting thing for me because we’ve already been you and I part of this revolution. So now I’m like we need a new revolution let’s go outdoor.

James West: Well, I will I will look forward to coming out and shooting that.

Alison Gordon: Yeah and rolling around and that no you will never roll around I’m joking, you’ll be wearing your full…

James West: No actually, technically that’s kind of how they make hash in Afghanistan and Morocco. They send guys out with their burlap things in there, you know walk through the buds like this and I can see how that would work it. In fact, I always thought that was interesting because it’s like, oh that’s how the why that hash taste the way it does. It’s actually the combination of terps, THC and burlap.

Alison Gordon: And sort of shoot our shot to put it all together a little bit. I know you’re looking forward to the hash day that it would be legal.

James West: I really am.

Alison Gordon: When do you think that will happen?

James West: Oh gosh. Well, it’s going to happen as soon as I finish my crop. I can tell you that because I thought the make myself some green crack. What are your big catalysts that are unfolding right now for 48North?

Alison Gordon: Well, definitely the farm is a huge one. Obviously, that would be a big game changer for us. So, we have the good in green facility indoor and we have our dashing facility indoor so between those two we can do about 4500 kilos.

So, bringing in another 40,000 will be very big but we’re also working on product development because this is what we’ve been waiting for is October being able to get really interesting great products out there into the market. So I don’t know if you’re excited, but I am that we’re finally going to be able to have…

James West: I can’t wait to try your product. I know in fact this weekend, I’m having a small gathering at my house, which I’m going to send you an invite.

Alison Gordon: Okay, please do.

James West:  And we’re going to sample 12 varieties of OCS sourced cannabis. Okay that I just took delivery of and there’s going to be a variety of methods for consuming it mostly restricted to smoking because we didn’t have time to make any edibles and I didn’t want anybody spending the night. So, I thought no edibles.

Alison Gordon: But for you, are you more of a do you use flower or would you prefer to consume?

James West: No, I don’t do edibles because the unreliability and unpredictability of the onset and offset time.

Alison Gordon: Right. As we develop those products and they you can know dosage and be more certain. Do you think that…

James West: The other thing I don’t like about the oral consumption of it. It tends to be more of a body stone and I live, you know, I like to live exclusively in my head. It’s all about my bubble up here, you know.

Alison Gordon: I hear you but it’s interesting that you’re a dying breed really?

James West: Don’t say that! That true that’s interesting. Well, I don’t know I fully expect that, you know in the in the back waters in the foothills of Humboldt and these places there are second and third generation descendants of guerrilla growers who are you know, they’re growing up as consumers and connoisseurs of premium dried flower.

Alison Gordon: But we can see that the sales of flower are only in and around 30 percent in some of these states.

James West: True, true.

Alison Gordon: So, something has shifted. I don’t know.

James West: But 30 percent I think you know, I think you know, I think that the total effect of cannabis the all the benefits of it can only really be enjoyed if you consume the whole plant. And so this idea where we’re going to extract the THC. We’re going to extract the CBD we’re going to extract the terps and I’m going to put it all together in a better product. To me, I have yet to try a better product.

Alison Gordon: Well, I have my friend Mark Richardson bubble man who always says smoking the flower is like eating the pizza box because really if you take the resin off the plant obviously you’re talking about maybe a whole plant extraction, then you’re getting all of the medicine all of the benefits are there not necessarily just on the leaf. So, well…

James West: Well I would counter that what I will be happy to I’m going to please extend the invitation and so we can have that debate but you know, I would counter that with you know, you can get a lot of the benefits from carrots from consuming carrot juice, but if you eat carrots so much more exactly. And so I would suggest that I certainly wouldn’t be one to say that we know so much about cannabis that safe to say that you know, the matter is not really relevant. It’s just these small group of terpenes and extracts or and resin and exactly so I mean, I’d love to have that debate with him.

Alison Gordon: Oh I’m going to call him and tell him to have it. But yeah, I think it’s just an exciting time to be able to get all this conversation out here which I can’t believe every time I’m here. I’m going we’re just sitting here talking about cannabis and to be able to run a cannabis company and it’s just it’s feeling like there’s good momentum happening for every day. I mean, I think the stocks are obviously doing a lot better.

James West: They are.

Alison Gordon: Knock on wood.

James West: They are.

Alison Gordon: And we’re seeing a lot more volume and I think people are starting to realize for us really that outdoor grow. We’ve getting a lot of calls people want to know they’re going how can you really do that? And when we explain how it works to go that makes a lot of sense I mean, why would you not grow for three cents?

James West: So the first crop will be September-October?

Alison Gordon: Yes.

James West: Okay, great. Well I’m going to come to the site.

Alison Gordon: Are you going to harvest? We’re going to need a lot of people harvesting.

James West: I’m going to bring my favorite trimming scissors. I’ve still got my trimming scissors from the 80s and 90s that I put in a briefcase just because it was like they were my best says is they never got dull? They never got too gummed up.

Alison Gordon: And you kept them forever?

James West: And I’ve still got them.

Alison Gordon: Okay, well bring them up because one of my favorite things to do up at our facility Del Shannon is to trim so, you know, we all we all, you know, go and be part of the Harvest from time to time and to me it’s just so relaxing to sit there and you see you have the whole plant and then you have a bin and then suddenly the bins full it’s like, you know.

James West: All right. We’ll be looking forward to that this year Alison. We’re going to leave it there for now. Thank you very much.

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.