March 13, 2019

BLOCKStrain Technology Corp (CVE:DNAX) Partners with NXT Water

Midas Letter
Midas Letter
BLOCKStrain Technology Corp (CVE:DNAX) Partners with NXT Water

BLOCKStrain Technology Corp (CVE:DNAX) (OTCMKTS:BKKSF) CEO Robert Galarza shares details of the company’s LOI with NXT Water LLC to create and launch AKESO Functional Fitness Water. BLOCKStrain’s technology will be part of the hemp-derived CBD water’s launch and help bring greater accountability to the infused beverage space. Galarza indicates that BLOCKStrain is looking to expand to the US as the company continues to scale. BLOCKStrain is interested in partnering with cannabis companies to revitalize strains. The company has also taken a leading role in tracking proprietary genetics with industry partners like WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) (FRA:4WE).


Narrator: BLOCKStrain Technology Corp. is a full service software company launching a Blockchain-based platform to serve the cannabis industry, which registers and tracks intellectual property in the cannabis space.

BLOCKStrain Technology allows cannabis growers and breeders to identify and secure rights to their intellectual property, and also streamlines the administrative process and reduces the cost of genetic and mandatory quality control testing for legal cannabis.

BLOCKStrain Technology Corp. is listed on the TSX Venture and trades under the ticker symbol DNAX.

[stock_chart symbol=”DNAX:TSV” align=”left” range=”1M”]

James West:   And Robert Galarza, the CEO of BLOCKStrain Technology is in the house with me right now. Robert, welcome back.

Robert Galarza:    Yeah, thank you for having me again.

James West:   You bet! Okay, so give me an update: what’s new with BLOCKStrain Technology?

Robert Galarza:    Well, we are heavily pushing a shift into expanding into the US, and a lot of this has to do with, we did a release recently, we did an LOI with a company called AKESO, which is a water company – actually, NXT Water is the water company. And basically, their entire product line is basically wanting to create a higher bar for CBD water, right? CBD has kind of got a bad name, you know, in terms of the kind of quality of content. As you know, our entire product suite is built around testing validation, right? And we talk about it in the cannabis space up here, really focusing on the genetic framework of products to be able to identify it, but at the end of the day, it really all boils down to quality of product, quality of testing.

So what we’ve looked at doing, as the Farm Bill passed and the laws are starting to shape themselves in order for us to be able to really work down in that marketplace, really looking to create full, dynamic visibility. And it’s kind of exciting for us, because you know, really all the back-end B2B stuff from a testing perspective, what it really means is that QR code, that verification seal, and making it dynamic, and making it accessible to consumers. So that’s really what we’ve been focusing on, is making that really powerful.

James West:   Great. And so your revenue, how’s that scaling?

Robert Galarza:    Revenue is scaling good. We’re bringing on clients relatively slowly here in Canada; I wouldn’t say slowly, but we always want them faster.

James West:   Right, of course.

Robert Galarza:    We always want to move faster. Contracts are out, being reviewed, etcetera. So the revenues are shaping up. The other side of it, too, is that we’re actually learning as the market’s evolving, where there’s new and unique opportunities to kind of expand on what our initial value proposition was going to be. So you know, when you start looking at genetic testing and validation and pushing that data, and then we started looking again, like I said, CBD, but other, you know, companies that wanted to dynamically publish their testing data. We have the ability to do that.

So we’re ramping up all the, you know, sales collateral material, getting our sales guys up, making the phone calls, hitting the doors, and it’s been good.

James West:   Yeah. Okay, so I’m starting a large-scale outdoor cannabis grow operation in a South American country, where I will not need to use supplemental lighting. I want to acquire a cannabis strain that is ultimately suited for this climate, and I want certain features of one strain that is going to be primarily for CBD and another strain that is going to be primarily for THC. Can you help me?

Robert Galarza:    We, that’s what we’re built for. You know, as it exists today, the only real choice right now is just picking up the phone and kind of calling around and communicating with people about, you know, what genetics are there. You know, the entire system is built around, as we start to register and aggregate this data over a period of time, so we’re able to understand, you know, I think we talked about it last time: the genetics and the epigenetics and how those genetics are changing based upon the environmental factors associated with it.

That is all built around the kind of information that we’re going to be indexing, which really gives you, a cultivator – that’s actually kind of the next generation is, we build the strain, register it. We build this library, which is, you know, WeedMD and Harvest One are getting their genetics into. We’re looking to hopefully build it in a way where people in the marketplace can then see that verified marketplace, and see other breeders, and then obviously the specifics around genetics are going to be proprietary to that grower, but we can make the connection, and then from there, you know, the communication can go that in terms of actually getting the right kind of strains for your environment.

James West:   Right. So are you guys actually actively breeding different genetic combinations yourselves?

Robert Galarza:    No, no no. We’re just, we’re the software. So we live in kind of the base layer, and you know, and this is kind of one of those things that we know a lot about genetics, I mean, comparative to probably a lot of other tech companies, but we’re not a genetics company per se. So we open ourselves up to, you know, partner with any and every type of testing partner out there that’s looking to aggregate this data, so whether it be groups down in the US that are doing a lot of genetic library database, and we want to sync up with them as well.

It’s all trying to make the ecosystem more efficient by taking the data and making it dynamic.

James West:   So one of the realities that we’re seeing in the cannabis space is that different strain names are being replicated in the marketplace, but the strains themselves have no real relationship to each other. They are wildly different, and so we’re finding that the ability to understand what you’re going to get as the outcome from a plant is becoming more diluted over time, largely due to a lack of a system like yours to track these things.

So is your software going to prevent a complete dilution of all of the sort of the genome of the cannabis plants that are in production, if it’s adopted by substantially all of the industry?

Robert Galarza:    That’s what we hope for. I mean, we built this system based upon our background in the California market initially, and really what it was, was, Blue Dream was one of the big ones, and Girl Scout Cookie was the other one that came out, and then literally the shelves just flooded themselves with Girl Scout Cookie and Blue Dream, right? So the running joke is, none of those exist anymore in those markets.

Really, I think at the end of the day, the more we’re able to identify this product by both its genotype and its chemical makeup, its chemovars, as well as all of the microbiological, you know, clearing, and the clearance on all the pesticides, etcetera, all of that information, the more we empower that for the producers, the better we can start to make this distinguishing characteristic. And if I can distinguish a strain, you know, and it’s a very unique strain, and it’s one that you like, and it’s a particular purpose – and, by the way, it may change over time. So by 2010 it may be different than by 2019 or 2025, because as we learned, epigenetics can change things.

As we’re able to index the information, we then can say hey, look: this isn’t the only Blue Dream that ever existed, but it’s just, this is the exact type of the 2019 or 2020 Blue Dream that we made. And then, you know, and then obviously we want to partner with companies that are doing things like, you know, cold storage and all of the facets that go into like revitalizing strains down the line.

But you can’t really do any of that unless you’re really keeping track of the information behind it.

James West:   You must see some trends in genetics that probably are a lot further ahead in the evolution of this whole industry than a lot of people who don’t look so closely at genetics. What are some of the trends that you’re seeing that are emerging, that sort of indicate, you know, the shape of the landscape in the future?

Robert Galarza:    Yeah, I think what we’re seeing is, we’re starting to get this understanding that there’s a lot more varietals out there than we maybe originally thought, that the craft market as it’s starting to evolve and enter into the space, and we’re seeing, I think, in the Canadian market we’re seeing a lot of producers go out and look to acquire large libraries. And then of course, then you look at countries like Jamaica and some of the ones in South America that you know, they all say they have the original, you know, lineage of genetics.

And I think everybody’s trying to plant their flag in terms of what genetics mean and kind of where they should exist. You know, really, we’re not trying to police anything in particular; we’re just trying to be a solution that can connect all of the components, right? And so all of the evolution of genetics and where genomics are going, and being able to better forecast characteristics and all that stuff, I mean, there are people far more talented and educated in genetics than we are; but the really beautiful part is, as I said, we’re able to turn all that into, you know, powerful, verified data, and then really lock that data and track that data and manage that data.

That’s where we can really hopefully build, like, better science, right? Because you know if, really at the end of the day, when you start looking at, you know, genetics and genomics matching themselves with the chemical makeups and how those plants, you know, evolve and showcase themselves, and the characteristics, we would love to be able to link all that to, you know, those folks that are doing, you know, clinical trials, and doing, you know, unique cultivations and unique formulations and stuff.

But it’s all, you know, information is power, right? So the more information we can aggregate and make it intelligent, I think the better we can be at forecasting, you know, what strains are going to work for what people.

James West:   You bet. All right, Robert, that’s a great update. We’re going to leave it there for now. We’ll come back to you in due course. Thanks for joining me today.

Robert Galarza:    Sounds good. Thank you for having me again.

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