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Green Relief Inc CEO on Scaling Production with Soil-Based Products

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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.

Green Relief Inc CEO Dr. Neilank Jha is thrilled to refocus the company as a purely medical cannabis operation. Green Relief intends to have positive cash flow in its first facility this fall and is oversubscribed on its current capital raise. While Dr. Jha is mindful of the necessary parameters for an IPO, as CEO he’s focused on creating value for current shareholders privately. Green Relief is expanding to meet patient demand for its high-quality products and the company just signed a lease to retrofit a 175,000 square-foot facility to increase production and biomass. He explains that Green Relief will expand its offerings at this facility to include soil-based products in addition to products produced using aquaponics. Dr. Jha discusses how Green Relief is now focused on medical cannabis only and believes the company’s subsidiaries such as Green Relief Genetics can not only optimize yields for Green Relief but other companies as well. Dr. Jha discusses the evolving medical cannabis space in Canada and notes that the clinic model many medical cannabis companies rely on is not necessary anymore as more doctors become increasingly comfortable prescribing medical cannabis.

Transcript:

James West:   I’m joined now by Neilank Jha. He’s the CEO of Green Relief. Neilank, welcome back.

Neilank Jha:  Thanks for having me, James.

James West:   Now, I feel kind of like I’m really blowing my own horn when I’m blowing your horn, here, because I’ve got, you know, increasing amounts of capital going into your company. I’m buying your product. Like, I’m basically a one-man promotional outlet for Green Relief! That being said, the reason I keep writing cheques to this company and keep buying their product is because it’s so damn good, and I say that having compared Green Relief’s Sunrise Oil, which if you go to their website right now, you can’t buy it. You can buy Sunrise Light, has come back into stock as of yesterday, but I bet you it’ll be out of stock by tomorrow, because everybody loves this oil.

And, like, what can we say about it? You can’t keep it on the shelves; why is that?

Neilank Jha:  Well, it’s a very high quality CBD product. We’re at 55 percent CBD, and it’s due to the Green Relief labs that we have, where we have very advanced extraction techniques with the liquid chromatography, the simple path distillation. We’ve invested a lot at Green Relief. We’re a medical-focused company on the quality of the product.

James West:   Okay. So Green Relief is still private; when is it going to go public?

Neilank Jha:  Well, James, right now what we’re doing is, we’re building value for our current shareholders privately. I was only brought on as CEO seven weeks ago. We’ve refocused the company to be purely medical, so we have Green Relief, the parent company, which does the cultivation, where we have our aquaponics facility in Hamilton. We just signed the lease and opened the doors to start construction of a retrofit of 175,000 square foot facility to increase our production, and there we’re going to be offering different offerings in the form of soil-based products as well, to increase the biomass – because like you said, we’re oversold with the aquaponics product all the time.

It’s very clear to our clientele that we have three offerings: premium aquaponics, organic-grade soil, and regular-grade soil, is the plan. However, the quality of the product is really based on our Green Relief Labs, which is what we discussed previously. So we have the parent company and we have three subsidiaries, which is Green Relief Genetics, where we’re starting to do experimental studies on what are the best genetic seeds, how do you increase the yields from each seed? So we have PhDs all over Green Relief that are doing studies on is it UVA versus UVB? What type of lights do you use? What CO2 levels, what nutrients? And determining that with that type of genetic, should you use aeroponics? Should you use aquaponics? Should you use soil?

So that’s how you maximize yield, and this is also a service that Green Relief Genetics will be providing to Green Relief, but also to other providers, as well. And it’s a subsidiary that will be profitable in and of itself.

We also have Green Relief Labs, as we’ve discussed, and then our most advanced subsidiary, which is Green Relief Innovations, where we conduct clinical trials. And we’re already quite advanced with traumatic brain injury and looking at post-traumatic stress disorder, depression and anxiety as indications.

James West:   Okay, so when are you going to go public? [laughter] No, when do you think that the company will seek a public listing? Just because people – the audience wants to know. Okay, this is all very fine and good, but how can I at home play along? How do I participate?

Neilank Jha:  Well, James, to answer that question, what I would say is that my goal right now is that we’re going to be cash flow positive in October, November of this year in our first facility. Our next facility, at 175,000 square feet, we’re going to have over $50 million in free cash flow, and we’re very good at keeping our costs low. I’m very particular about overhead.

So when you have that going on, and with the raise that we’re currently doing, we’ve oversubscribed on our raise. So we had a plan to take a certain amount of equity and a certain amount of debt. We’ve oversubscribed on the equity; now we’re determining that we’re going to take less debt. So ultimately what Green Relief will be in the next six to nine months will be a company that has no short or long term debt, no accounts payable, spitting out a lot of free cash flow. In addition to that, the Genetics, the Labs and the Innovations producing medication.

Now, if I were to ask you, does that sound like a good time, potentially, to consider some type of strategy for the investors, what would you say?

James West:   Well, I would always suggest that going public with a positive cash flow would be a good baseline place to start, over going public without that.

Neilank Jha:  Yeah. So I think there’s a lot of determinants like that, and it’s also based on market conditions. You know, for example, not saying Green Relief, in general. Let’s say that the US election looks like it’s going to move in a certain direction. We know that that could influence, as well, an IPO, too. So the Board will have to look at several parameters and determine what is in the best interests of shareholders. We’re continuing to produce value, and as we do this, it’s always possible to spit out dividends to the shareholders, make sure they’re well taken care of, until we determine the ideal time to move forward.

However, what I can tell you is, all the moves that we’re making right now, we’re continuing to build tremendous value for shareholders, and that’s why we oversubscribed. I mean, right now in the Canadian market, you know, I’ve attended meetings with investment banks, and when I mentioned to them four weeks ago I was going to raise capital for Green Relief, they said, Doc, the market is saturated. There’s no appetite to invest. It will be impossible for you to raise any type of money whatsoever. Who is your investment bank? And I made a joke and I said, I’m going to be the investment bank!

They said, what do you mean? I said, well, I’m going to go to our law firm and get a subscription agreement, I’m going to get a clearing broker, and I’m going to go sit in people’s living rooms, family rooms, kitchen tables, my boardroom, their boardroom, and that’s how we oversubscribed, James. Because people believe in the purely medical vision of what we’re doing here.

James West:   Wow.

Neilank Jha:  You know, cultivation, to me, it’s like Gretzky. Gretzky said I pass the puck where the player is going to be, not where they are now. And cultivation to me is sugar. Eventually, how do you make the cupcakes and the Coca-Cola? And that’s what Green Relief is doing. We may not be the Walmart where we have that volume and that size, but we’re more of a boutique firm that is producing medication.

James West:   You’re selling the most of your Sunrise CBD oil, is that correct? Is that your biggest-selling product?

Neilank Jha:  Yes.

James West:   Okay. And what – like, I actually ordered another product today, which is a, it was called Low Tide, and it’s high CBD, low THC dried flower. And so, does that mean you’re now participating in the recreational market on some of the government mandated stores?

Neilank Jha:  No. We’re purely medical, James, so even that product is a medical product as well. We have not entered the recreational market. Our focus is purely to remain in the medical market. Right now, we have patient scripts that we cannot service because we don’t have enough supply.

James West:   So are you withholding from taking new patients at this point?

Neilank Jha:  Yes.

James West:   Ah, okay. So if you weren’t, how many patients do you think you’d be seeing enrolling every month at this point?

Neilank Jha:  Well, there’s always an attrition rate where some patients leave and then we have an opening to take some new patients. However, in general, we’ve had to send a message across the clinics to reduce the number of scripts that they send us. You know, distribution in this industry is quite interesting – the model is changing quite a bit now. As more and more physicians become educated about medical cannabis, they’re directly writing scripts for their patients for cannabis. So the necessity for a specific clinic associated with cannabis is becoming maybe not as relevant as it once was.

So you know, in my office as a CEO, I have people approaching me every day: Neilank, would you like to purchase our network of clinics? And I say, well, you know, that’s not our core business. Our core business is actually not even cultivation. Our core business is genetics, labs, innovations, and building intellectual property for medical conditions.

So I anticipate that based on the way we’re doing things, James, we have a lot of scientists that are joining us. We have doctors now from the professional sports leagues that are joining Green Relief Innovations on the medical advisory. We’ve brought on a Chair of the Medical Advisory who’s a very prominent individual in the major sports leagues. We have professional athletesthat are calling us on a regular basis, wanting to join as advisors. So I think what you’re going to notice as we move forward is that the quality of our research, the clinical trials, the quality of the product that we have, as you already know…so Genetics produces the strains that we require; the laboratory purifies the product to that grade, and Innovations goes and runs the clinical trials and tests the IP. I think our distribution to patients is going to increase tremendously just based on our model of focusing on the medical side and the amount of investment we’re making in that regard.

James West:   Cool. All right, well, we’ll leave it there for now and come back to you in due course. That’s an awesome update, and thank you so much for joining me today.

Neilank Jha:  Thanks for having me.

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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