SOL Global Investments Corp (CNSX:SOL) CEO on Strategic Investment in Blühen Botanicals LLC
SOL Global Investments Corp (CNSX:SOL) (OTCMKTS:SOLCF) (FRA:9SB) CEO Brady Cobb describes the company as the “smart money in cannabis.” SOL Global has strategic partnerships and investments in the legal US cannabis space and works with governments in the creation of cannabis regulations. SOL Global was an active participant in the passage of the Farm Bill and Cobb indicates the STATES Act will be a catalyst in similar ways. Cobb discusses the company’s recent investment in Blühen Botanicals LLC, a significant player in the hemp space, as part of SOL Global’s goal of earning EUGMP certification and eventually supplying products to the European market.
Narrator: SOL Global Investments, Corp. is an international investment company with a focus on cannabis and cannabis-related companies in legal US states.
The company is also focused on the hemp and CBD marketplaces, and the emerging European cannabis and hemp marketplaces, with investments and partnerships across cultivation, distribution and retail.
SOL Global has a research and development program with the University of Miami, which is focused on using proprietary cannabinoid therapy to treat concussions and head trauma.
SOL Global Investments Corp. is listed on the CSE and trades under the ticker symbol SOL.
James West: I’m joined now by Brady Cobb, CEO of SOL Global, via Skype. Brady, how are you doing?
Brady Cobb: I’m good, how are you?
James West: I am rocking the free world, thank you very much. Brady, let’s start with an overview: what is the business model of SOL Global Investments?
Brady Cobb: So we’re smart money in cannabis. You know, we identify emerging markets, nascent markets both in the US and worldwide, and get in with the right partnerships early. We have a heavy focus on partnering within governments and learning the various different regulatory frameworks. I’ve been active in Washington, DC for the better part of two and a half years now, working on reform, and one of the things we announced today is, we actually were active participants in the passage of the Hemp Farming Act in the US. Not for purely altruistic reasons. And today we announced our full hemp strategy, which we’re very excited about, which is our first acquisition is a company called Blühen Botanicals, based out of Knoxville, Tennessee.
James West: Wow, fantastic. And the hemp craze in the United States has really got some momentum, doesn’t it?
Brady Cobb: It does. I mean, when the President of the Senate, already revered as one of the most conservative lawmakers in the US, personally sponsors the Hemp Farming Act, which took hemp and CBD products with less than 0.3 percent THC off Schedule 1, I mean, if you would have told me three or four years ago, as a former lobbyist and attorney, that that was going to happen, I would have said you’re getting high on your own supply.
In fact, it happened. And it happened with largely an almost overwhelmingly positive vote across, you know, across party lines. So you know, we’re seeing a lot of momentum in the US. There’s a lot been written about it, there’s a lot of naysayers. I don’t see a lot of these people that are sometimes talking about what’s going on in DC when I’m going office to office, but we are making a lot of great strides, and we’re incredibly bullish on the hemp and CBD space.
James West: Yeah, sure. Wasn’t CBD just de-scheduled from Schedule 1 to Schedule 5 or something as a result of the FDA’s approval of Epidiolex?
Brady Cobb: Yes it was, you know, and the FDA is still ultimately looking at how it’s going to treat consumer products, and they’re going to, you know, they’re in the process of putting out guidance, which anything related to the Federal government, we all know it’s going to take some time. But again, that’s why we maintain such a robust presence and team in Washington. We’re a part of those discussions, and knowing that regulation was coming from the FDA, given that these are things people are ingesting into their bodies, we are, took a very aggressive role when we were out looking for the right hemp partners. And we found Blühen Botanicals.
What really drew me to them is, they had a focus on the science side, and the long play of the medical market, serving as a medical use. And ultimately the only way to get there is to actually cultivate in a vertically integrated manner, which we have, to process, extract and ultimately manufacture in a way that is GMP, EU-GMP and on my preference, one day, ISO certified. To me, you have those certifications, I think the FDA is going to look at that a little bit differently than folks that are doing it in a different way or a substandard.
But it also, from a long view, given that there’s a massive opportunity in Europe, largely very little cultivation in Europe but there’s certainly an appetite for the products; if we’re GMP certified and EU-GMP certified at our facilities, we have the opportunity, once we clear the hurdles from a red tape standpoint, to be able to service that market in Europe right here from the US.
So that’s ultimately what drew us to Blühen, and we’re really excited.
James West: Wow, amazing. What kind of market size are we talking here in 2019 for you guys?
Brady Cobb: I think it’s, I mean, the sky’s the limit, you know, pun intended. You look at the size of the US market, I mean, look at what happened in Canada: you had how many producers scale up to be ready for full legalization in Canada, and there was empty shelves on Week 1. Look at the size of the United States, and you know, CBD is largely now, with the Federal prohibition and the cloud lifted off of it, now folks are really starting to pay attention. So this market could be massive.
You know, our biggest problem, and the reason we focused on finding the right operators, is scalability. I’m looking at how I’m going to grow in this market and what partners I want to define, investments I wanted to make when we were deploying capital; it was those that could scale with us, and scale up ultimately to meet the demand. We’re really more confident that we’ve found that.
James West: Sure. Okay, so are you going to seize the opportunity inherent in the THC side of things when that becomes de-scheduled to controlled status as opposed to a banned substance?
Brady Cobb: Yeah, and I think ultimately the States Act is probably the most, the next in line to pass. The States Act would take it off Schedule 1 in states where it’s legal; it’s a Bill I had the privilege of being part of drafting, and it’s ultimately something that I think has a better chance of passing, given how the composition of the Senate being conservative.
I still think we’re a couple of years away from a full legalization in the United States. It’s coming, I mean, you know how states, Ohio, Florida, Michigan, Pennsylvania, you can’t carry the White House without winning those states. So everyone in DC has had to pay attention to it; I just, I’m not a believer that all of a sudden, today, we’re going to have Cory Booker’s decriminalization Bill pass, but I think we’re going to see stepping stones to that point.
And we are prepared to, you know, we do have investments in the THC space, our primary one being Verano Holdings. We press released that deal back in October where we took our Florida license and vended it over to them, and also made an $88 million investment in cash to take approximately 20-something percent interest in their company. They operate currently over seven states, going to many more, and they, you know, have a robust presence across the US. But again, what drew me to them is, they’re truly operators – operators in the biggest sense.
So we’re excited about that investment, but we’re also have other THC investments in various different portions of the marketplace in the US to be able to seize upon it, and we’re active right now in Europe. We see Europe as kind of the next frontier, especially with the recent EU and WHO statements on cannabis.
James West: Yeah, wow, really. So when you say the sky’s the limit, you’re not kidding! You recently purchased, bought back 5 percent of your issued and outstanding shares, and the audience is always curious as to why companies do that. So why did you buy back 5 percent of your outstanding stock?
Brady Cobb: We saw value. We knew what our balance sheet looked like; we knew what our NAV was, and we actually put a press release out on our NAV. We were trading well below that, so we saw an opportunity to buy back our shares at a price that we believe was, you know, we’re undervalued in our opinion given where our assets are and how we positioned ourselves in the marketplace.
So, it was nothing more than looking at it and going, there’s an opportunity here.
James West: Fantastic. So just for the audience that doesn’t understand it, when the company buys back their shares, they’re actually accruing more value per share to the company than there was previously. So it’s the opposite of dilution.
Brady, okay, we’re going to leave it there for now. We’re going to come back to you in the near future – that’s a great introduction to the company. I look forward to following the story closely. Thanks for joining me today.
Brady Cobb: No, thank you. I welcome an opportunity to come see you in Toronto, maybe we’ll do it when, let’s get a little closer to springtime. I’m a native Floridian, so spare me.
James West: Sounds good! Or I’ll come and visit you, how about that!
Brady Cobb: Come on down anytime!
James West: All right, I’ll be in touch. Thanks, Brady.
Brady Cobb: Thanks.
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