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CB2 Insights (CNSX:CBII) Begins Trading on the CSE

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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.

CB2 Insights (CNSX:CBII) is a predictive analytics, software, and services company operating in the medical cannabis space. CEO Prad Sekar is excited about the company’s launch on the CSE and believes it is another step in achieving the company’s mission of mainstreaming medical cannabis. Sekar sees cannabis becoming a hallmark medication. The company’s technology allows point-of-care data gathering, which will provide the next level of validation for medical cannabis. CB2 Insights operates in 12 states and has 60,000 patient interactions per year. CB2 Insights  completed a $5 million non-brokered private placement prior to going public to continue its execution plan and for further acquisitions and consolidation.

Transcript:

Narrator: CBII Insights is a data company focused on medical cannabis. The company uses a software and services to better identify the efficacy of cannabinoid therapy and increase the use of mainstream cannabis in traditional health care.

CBII Insights manages several sub-brands throughout the medical cannabis value chain, including Canna Care Docs, Sail Cannabis, and Token. They own and operate the largest multi-state medical cannabis evaluation and education centre, servicing 12 states across the US.

CBII Insights is listed on the CSE under the ticker Symbol CBII.

Well, this is an interesting time to bring on a guest whose company just listed. He is the CEO of CBII Insights: it’s a pleasure to welcome Prad Sekar to the show. Prad, how are you, sir?

Prad Sekar:   Doing well, thanks for having me.

Howard Glassman:   Did you – I know you were kind of around the corner there, listening to Ed talking about, you know, maybe it’s time to look at the market. We had Ben on talking about, you know, cannabis stocks in general. Your company just listed. How do you feel about, you know, this time and now in the world of cannabis investing?

Prad Sekar:   It’s a great question to ask. My response is simply, we’re a business that looked at the capital markets for a real reason for our business to evolve to the next level. The market’s behaving the way they would in terms of sector markets; from our purpose, it’s really around getting an acquisition, getting a currency for acquisition, which is really our business model at the end of the day.

So we’re more than anything else just looking forward to having this milestone being reached, and now just moving on to the next part.

Howard Glassman:   Well yeah, you know, I mean, you think about it, you know, the company’s genesis: it gets to a point when it lists, just how exciting is that?

Prad Sekar:   It’s very exciting.

Howard Glassman:   It’s got to be. It’s got to be mind-blowing!

Prad Sekar:   Of course. I mean, it’s a huge breath of relief when it actually happens; all the work that goes into it to get it here, and when you’re running a real operation and you have a real business going on at the same time, it’s definitely, you know, a good place to be.

Howard Glassman:   Well, what I was going to say is, what I like about your story is, just from a human level, you know? You guys had an idea, and you never know where it’s going to go. And then one day you get the news that it’s going to list, and it’s like a huge milestone for you personally. But as a company it means that you’re going to keep moving forward.

Prad Sekar:   Absolutely. I mean, it’s been four years in the running so far; there’s still many more years to go. Part of evolving a business, like anything else, is getting to a certain stage and then requiring, you know, more growth opportunities to come your way. And I think the public market opportunity not only gives us a currency, but also, you know, credibility, more information that we can utilize to help shareholders’ value increase over time.

Howard Glassman:   Well, I mean, that’s kind of part of what I wanted to talk about, what it means for the company: you guys are listed, and as you say, it’s been four years getting to this point. Considering what we just talked about in terms of markets and a little volatility, we’ll say – what do you want investors to know when they start looking at CB2?

Prad Sekar:   We’ve had one mission in mind ever since we started, and our mission has always been transform cannabis into mainstream healthcare. There’s three key buckets to our operation: the first is clinical – it allows us access to a unique set of information that today the industry doesn’t have. There’s a lot of data out there when it comes to the efficacy and the usefulness of cannabis; from our purpose, we want to take it to the next level of validation.

So clinical visits allow us to look at patients with physicians and clinicians, the interactions between them’ the type of data you can only get in those kind of interactions.

The second bucket being technology, allows us to standardize how we interact between those two stakeholders, track effectiveness and outcomes over time in a more clinical intervention setting, and then the third being the insights in terms of how we take those insights and move it forward.

So for us getting listed is really around now us having an opportunity. In the US, we operate one of the largest evaluation centres; 28 centres in 12 states, over 60,000 patients walk through our doors. This gives us an opportunity now to increase market share, collectively increase more interactions between clinicians and patients, and drive more valuable data insights in the industry.

Howard Glassman:   There really is a paradigm shift when it comes to, you know, clinicians and medical practitioners. Companies like yours on the forefront of, you know, research into how people use cannabis other than just the ‘Hey, let’s get high and watch Netflix’. I mean, there’s that. People do that.

Prad Sekar:   Of course.

Howard Glassman:   But you know, before we move on to some more financial questions, what about some of the breakthroughs? You know, we talk a lot about, I was just saying to Ed, you know, if you have insomnia, there’s a specific strain for that. And companies are getting more and more into microdosing and being – so what are some of the things that you’ve come across that we might be surprised the cannabis can be used for?

Prad Sekar:   It really varies based on the type of patients that we see. And we see cannabis today usage in three buckets. First one is recreational, so you use it as a recreational drug.

The second is wellness, which is what we see more of the products today. So –

Howard Glassman:   Which is a huge growth opportunity.

Prad Sekar:   Of course. It’s a massive growth opportunity. And then we see a third bucket, which is more of a hallmark medication. And so when you think about more of a traditional pharmaceutical medication, it’s usually a molecular-based compound, it’s standardized over time, it’s tested, you have dosing efficacy, risks, and you have a more prescribed manner as to how to obtain it: prescription-based, insurance-covered, etcetera.

We see medical cannabis in the future really as moving into a hallmark drug industry, and so when we –

Howard Glassman:   That’s an interesting, phrase, I’ve never heard that. Hallmark drug – meaning, like a traditional, this is the prescription that you’re going to replace with something less harmful?

Prad Sekar:   Could be something replacing less harmful, or something that’s more easily understood and adopted. So, if you were to go and talk to a physician or a health care provider, how do they currently assess you? How do you they currently prescribe you? And more importantly, how do they know that the product that you’re taking won’t interact with any other treatment plans that you’re on currently? And that’s really important.

Howard Glassman:   Last month, February, you announced the completion of a non-brokered private placement for gross proceeds of $5.74 million. What was that money for?

Prad Sekar:   So majority of it’s going to be used for growth opportunities –

Howard Glassman:   Now, I want to know every dime, Prad. No, I’m just –

Prad Sekar:   Let’s get into that.

Howard Glassman:   Yeah, exactly.

Prad Sekar:   Currency for us in terms of acquiring and acquisitions and consolidating a US market is going to be primarily both driven through public market currency, but also cash. So it’s our intention to utilize the cash to continue to build a pipeline of consolidation in the US markets, and deploy an execution plan.

One of the things that we bring to the table is not just the ability to acquire and consolidate, but also to improve. And so we’ve proven through execution in the last year, where we’ve acquired clinics in 2017 and have been able to grow revenues and patient count by over 20 percent, profits by over 100 percent…

Howard Glassman:   Amazing.

Prad Sekar:   So, our ability to take cash, use the cash to make acquisitions, turn those acquisitions into more revenue-generating profit centres, and then being able to continue to bolster the value of data over time.

Howard Glassman:   And now going back even further in time, in October, MPC Technologies, Inc. announced that it would undergo a significant brand transformation. What was the point of the brand transformation? What was it that was going on at that time you thought, hey, we need to do something differently?

Prad Sekar:   Sure. MPC Technologies was always the incorporated name of our company; over time, you get to acquire technologies or acquire assets that eventually come with their own brands, and so when looking at a house of brands approach, or a single brand that represents everything, we decided to move more towards a single brand that would represent the real mission of mainstreaming cannabis into health care.

So CB2 being the cannabinoid receptor 2 in the human body, allowed us to maintain a more scientific approach to the type of data we’re collecting, and Insights obviously being data is really what we’re driving towards.

Howard Glassman:   Over the years I’ve had a chance to host a few events for some big pharmacy companies, and one of the things they always talk about is how long it takes to get a drug to market. Will we see cannabis medicine take the same amount to prove, or will it come to market quicker, do you think?

Prad Sekar:   It’s a good view into seeing, you know, you’re looking at 10, 15, 20 years sometimes for certain drugs to hit the market, and this is an interesting insight: last year in December, the FDA released the new frameworks for real world evidence, which basically says anything that’s not a traditional clinical trial can be used to generate insights to potentially help bring a drug to market faster. And this could effectively save millions of dollars for Big Pharma companies.

I think this is equally just as valuable for cannabis companies as well. When you’re looking at bringing a new drug to market, especially on cannabis-based medications, it can both save time and also money.

Howard Glassman:   Well, that’s interesting you’re saying that, because, you know, there’s a whole sector, the nutraceuticals, sort of the vitamins and therapies and I mentioned earlier this week about things like saw palmetto, people take that for prostate health – but they always have that, you know, ‘this drug has not proven to be’ – no FDA approval. Will there be a sector of the cannabis market for medicinal use that, with that proviso that this hasn’t had the regular pharmacological trials, will still be available? Is that a sector you guys are interested in?

Prad Sekar:   I think we’re more focused on the sectors where future FDA approvals and testing is going to be required. It’s again where we see more of the traditional healthcare medications going, and especially the value of the data we collect is really focused on that real-world evidence that allows for the future Insight generation.

I do think, though, however, that you will see other products being introduced to markets; again, I think more the wellness bucket than in the medical market, and so it’ll just be very based on what you eventually are looking for.

Howard Glassman:   Well, tell you what: lots of interesting stuff. The CEO of CB2 Insights, Prad Sekar. Anything else you’d like to leave folks with while they’re going to quickly scurry and investigate more about your company?

Prad Sekar:   Sure. I mean, like anything else, we always like to tell investors that we’ve been able to prove our business over the last four years. It’s a revenue-generating asset that is able to continue to grow based on existing management knowledge and execution tactics, and like anything else, the value of data is something that’s been unproven to a large part of the industry. And like most companies collecting data in the industry, I think it’s going to be a value at some point that, you know, will be realized for shareholders that are looking at it in a long-term.

Howard Glassman:   Well, you seem like a nice person. You seem to know what you’re talking about. Hope you enjoyed your experience.

Prad Sekar:   Oh, I loved being on the show. Thank you for having me.

Howard Glassman:   Hope this wasn’t too weird for you?

Prad Sekar:   No, not at all. I loved the questions. I thought it would be more financially real.

Howard Glassman:   Fantastic. [laughter] Well, we do what we could. We did the best we could.

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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