Chemistree Technology Inc (CNSX:CHM) Expanding Premium Brand Sugarleaf Offerings
Chemistree Technology Inc (CNSX:CHM) (OTCMKTS:CHMJF) (FRA:CM1) CCO Sheldon Aberman shares details of his extensive experience in the hydroponic and cannabis industries, which includes designing and building facilities, cultivating product, and providing consulting services. Aberman discusses the construction of Chemistree’s 128,000 square foot greenhouse complex and its 40,000 square foot manufacturing and distribution building, in Desert Hot Springs, California. Chemistree is already operating in Washington State, where the company cultivates its premium flower brand, Sugarleaf. Chemistree is expanding the Sugarleaf brand to include extracts, vape pens, and beverages in the Washington market and plans to bring the brand to California when its Desert Hot Springs facilities are operational. Aberman addresses industry concerns about oversupply in the California market and suggests the state actually has a shortage of premium dried flower brands like Sugarleaf. Chemistree is entering the New Jersey market after signing a deal with a vertically integrated cultivator, manufacturer, and retailer in the state and will continue to expand along the Eastern Seaboard.
Narrator: Chemistree Technology Inc is an investment company dedicated to the US and international cannabis sector, providing turnkey solutions for the regulated cannabis industry.
The company is committed to acquiring and developing vertically integrated cannabis assets to own and operate licensed cultivation, processing, distribution, and retail facilities.
Chemistree currently owns assets in Washington State, prospective cannabis cultivation lands in California, a first investment in the Canadian cannabis sector through Pasha Brands, and they a robust pipeline of assets to grow with pace of business.
As of April 2019, the company’s management ownership sits at 35 percent. Chemistree Technology Inc is listed on the Canadian Stock Exchange under the symbol CHM.
James West: I’m joined now by Sheldon Aberman. He is the Chief Cannabis Officer of Chemistree Technology, trading on the CSE under the symbol CHM. Sheldon, welcome.
Sheldon Aberman: Thanks for having me.
James West: Sheldon, how did you become the Chief Cannabis Officer of Chemistree Technology? What does that entail, exactly?
Sheldon Aberman: Well, 17 years in the hydroponic and marijuana industry, manufacturing products, high-end electronics, owning dispensaries, cultivations, and of course, through that entire design process, helping consult and build some of the largest grows in the US.
About five years ago, we formed Cannabis Consulting, took on some of the larger LPs in Canada, Greece, New Zealand, and have continued to expand the consulting arm of my other businesses. Came together with a group of friends over the years, formed Chemistree, and we’ll be doing the exact same thing for Chemistree that I’ve been doing for Cannabis Consulting going forward.
James West: Excellent. So you’re currently growing in Desert Hot Springs, California, and also in Washington. What is the size of your production profile and footprint at this point?
Sheldon Aberman: So we’re up and running in Washington; we operate a brand up there called Sugarleaf. We’re running about 300 lights and flower, pulling down some of the finest quality product the Washington market’s seen.
In Desert Hot Springs, we’re currently in design and construction phase of our 128,000 square foot greenhouse complex, and our 40,000 square foot manufacturing and distribution facility.
Sheldon Aberman: That is correct. We have signed some agreements in New Jersey to pursue an application for a vertically integrated manufacturer, processor and retailer in the New Jersey market under their new regulation, and you’ll see continued expansion along the Eastern Seaboard this year.
James West: Okay, so you’ve got all these US states teed up; are you going outside of the United States at all, in the future?
Sheldon Aberman: I would love to give you that answer, but obviously as a director, you know I can’t. We are perpetually looking at deals internationally, and I think you’ll be surprised to see what’s coming down the pipeline.
James West: Sure. The deal that Canopy Growth did where they took over Acreage Holdings, do you think that that makes Chemistree a take-out target for larger companies as a result of that?
Sheldon Aberman: I’m not sure if that makes Chemistree a take-out company, although I think some of the board members have that rainbow at the pot of gold they’re looking for. The Acreage/Canopy deal is quite interesting: it’s predicated on federal regulation, federal legalization taking place in the US. We’re not looking that far down the road; currently, we’re looking at the next 18 to 36 months to increase the size of our organization, get as much cultivation under our belts as we can, and continue our own internal acquisitions and maybe become the next Canopy acquiring an Acreage.
James West: Okay. Sheldon, tell me about Sugarleaf: how you came up with – how that brand evolved, what is popular about it, where can I buy it?
Sheldon Aberman: Well, Sugarleaf’s a brand we took over in the Washington market. It was already a premium brand with a great following. We’ve stepped in, revitalized the grow, and brought it up to the next level. It’s one of the top quality products you can buy in the Washington market, and it’s available at retailers all over.
James West: So will Sugarleaf be ultimately a extracted product like vapes and concentrates, as well as perhaps some consumer packaged goods like edibles and beverages at some point? Or are you going to focus primarily on being a premium dried flower brand?
Sheldon Aberman: So we’re actually in the process now of expanding the Sugarleaf brand in the Washington market to be extracts, vape pens and bottled beverages. We’re also simultaneously expanding the Sugarleaf brand into the California market through a series of extracts, beverages, and soon to be premium flower when our Desert Hot Springs facility come online.
James West: Does Chemistree have exposure in the medical cannabis market, or just the recreational market in California and Washington?
Sheldon Aberman: Our focus is primarily just the recreational market. We don’t differentiate between medical and recreational internally, but our focus in California is recreational.
James West: Sure. Well, medical, recreational – it’s all therapeutic, right?
Sheldon Aberman: That’s what it’s about.
James West: Do consumers of Sugarleaf products typically value high THC, low CBD flower? Or do you have like a healthy component of people who actually like to smoke CBD?
Sheldon Aberman: We don’t focus on CBD; our products are super high in THC and some of them are high in CBD. Our consumers are looking for high end flower, a quality high, and a great recreational experience.
James West: Wow. Okay, so now let’s talk a bit about the California market. My understanding is that the California market is over-supplied by a factor of two, and that’s largely because there’s so many suppliers of black market, unlicensed product. Do you see that as a challenge to achieve market share with your Sugarleaf brand in California?
Sheldon Aberman: I think it’s really relative to the way that you look at the California market. The argument could be made that it’s over-supplied or under-supplied. There’s still a huge black market, still a huge gray market, but what you’re seeing is a new demographic of consumer coming into the spotlight, and those are the people that are out at the dispensaries acquiring product. And if you go out to the dispensaries in California, realize there’s a vast shortage of quality brands and product on the market. So with Sugarleaf entering the California market, we see nothing but horizons bountiful for us, and consumer market that’ll be happy to consume the products that we put out.
James West: Do the consumers in California, do they have a preference? Would you say that most of the consumers prefer to buy from legal sources, or do you think that a lot of them are still happy buying from unlicensed sources?
Sheldon Aberman: I think there’s a big shift taking place, where people understand that they want to buy from licensed sources, they want to know the quality of the product that they’re consuming, they want to know that it was cultivated ethically – there’s no pesticides, harmful chemicals. But don’t forget, you also have this new demographic of recreational user coming in that doesn’t know the black market and doesn’t know the gray market, they only know the recreational shops that are available to them, and they’re confident that they’re getting healthy, quality, chemical-free marijuana.
James West: Let me ask you, Sheldon: what in 2019 is the big milestone for investors in Chemistree?
Sheldon Aberman: What you’re going to see in 2019 is Chemistree real breakout year. We’re expanding throughout the California market, the Midwest and the Eastern Seabord. All of our cultivations and acquisitions will start to take shape, close, and come online.
James West: So, let me ask you, Sheldon: do you see a opportunity in expanding to more states than the Eastern Seabord and the western states? Like, is Texas on the menu at all? Does Florida come to mind?
Sheldon Aberman: I’m not a fan of humidity and I don’t wear cowboy boots, but I’ll tell you what: Chemistree is going to look at every state, every country, and whatever expansion possibilities come forward, we’ll make sure it makes the best sense for our investors, and weigh that in prior to moving forward.
James West: All right, Sheldon. Thanks for joining me today. We’ll come back to you soon. Best of luck.
Sheldon Aberman: Appreciate you. You guys have a good day.
James West: You too.
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