Beleave Inc (CNSX:BE) Evolving Novel Brands for High Customer Demand

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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.

Beleave Inc (CNSX:BE) (OTCQX:BLEVF) CEO Bill Panagiotakopoulos joins Midas Letter for an overview of the company and what Beleave’s footprint is within the cannabis industry. Beleave are focused on growing craft, premium cannabis in their Hamilton, Ontario facility, which is undergoing its much-anticipated expansion. The company will add almost 100,000 square feet for increased cannabis extraction, processing, and cultivation. This expansion expects to generate approximately $50 million in annualized revenue with an average gross profit margin of 60 percent once fully operational. In early July 2019, Beleave commenced sales of cannabis oils for the Canadian adult-use market and are launching four new products this fall. The company is looking to take advantage of the evolving cannabis market expanding into the vape pen market and by introducing a novel water-soluble powder – allowing customers to add a dose-able, odourless ingredient to any form of consumable product. Currently, customers are enjoying Beleave’s product offerings as the CEO expresses the company “can’t even keep up with the demand right now” as the company continues to work on satisfying their market and its customers.

Transcript

Narrator: Beleave is an ISO-certified Canadian cannabis company that cultivates cannabis flower, oil and extracts for medical and recreational markets.

Beleave is fully licensed to cultivate and sell medical and recreational cannabis, and is leading the way through research partnerships with universities to develop pharma-grade extracts and derivatives.

Through recent partnerships, Beleave have expanded their presence to the growing South American and European markets.

Beleave trades on the Canadian Stock Exchange under the symbol BE.

James West: I’m joined now by Bill Panagiotakopoulos. He’s the CEO of Beleave, Inc., trading on the CSE under the symbol BE. Bill, welcome.  

Bill Panagiotakopoulos: Hi, James. Thank you.

James West: Bill, let’s start with an overview: what is Beleave’s actual footprint in the cannabis industry?

Bill Panagiotakopoulos: Well, we started back in 2013, one of the original cannabis companies to make our foray into this new, exciting industry. We’ve built up quite an impressive library of intellectual property; we’ve built a facility. We generally, we grow, actually, about twice the industry average per square foot. We’re doing really well. We’re in four provinces, we have our extraction license for oils, one of the two dozen or so companies that have that, and we’re about to do a major expansion in our Hamilton facility.

James West: And so, Beleave products are available on the Ontario Cannabis Store?

Bill Panagiotakopoulos: So they are. What we have is our recreational brand, which is Seven Oaks, which is doing extremely well, and we just launched the Beleave branded products in the OCS and Saskatchewan, earlier on this month.

James West: I’m going to have to try them.

Bill Panagiotakopoulos: Please do.

James West: Okay, so, what kind of footprint have you got in terms of growth canopy, and how much are you producing in a given year?

Bill Panagiotakopoulos: So right now we have our original facility that we were building out. Our whole facility is about 10,000 square feet of all space. our canopy space is relatively small; it’s about 2,000 square feet, but we’re able to generate over 900,000 grams from that little footprint there. That yields, or that generates, about $5 million of revenue a year just out of our original test facility. It was just to prove out our concept, and it ended up becoming actually viable as a business.

From there, we have our long-anticipated expansion, Phase II in Hamilton, which is 91,000 square feet, and that’s going to have a canopy space of about 57,000 square feet. So we’re going from 2,000 to the 57,000 square feet. It may not be large in today’s large LP standards, but what we are is, we’re really good at craft growing. We grow really small batches really well, and that’s been, I guess, I mean, the way the market’s accepted our product and keeps coming back for more of it, the way the provinces keep asking us for more product than we could ever produce, is a good sign. We’re doing well on the grow and sale of the product.

James West: Sure, yeah. I’ve actually heard, just rumour-wise, that Beleave is some of the better cannabis available out there, so that’s great. Okay, so you’re going to grow to 100,000 square feet. Now, what does your particular arc-way to profitability look like?

Bill Panagiotakopoulos: So in April of next year, 2020, we will have a positive EBITDA. We will actually be profitable. Right now, we’re about breakeven, but in the New Year, we will be doing exciting new things with the new facility, with taking on the rest of the provinces, and doing ourselves. We have an incredible team. They have redefined, in my opinion, what growing good cannabis actually is, and as the industry evolves, keep in mind, we have, you know, very few stores right now; less than, or just over 300 across the whole country. You really need to come out with really good quality products so people remember you and want to come back to you. Just putting stuff out in the market en masse is going to hurt you in the long run, and we’re really careful about that. We take pride in that.

James West: Yeah, you bet. I’m curious as to whether you have any sort of global ambitions to, like, Europe, Latin America, United States?

Bill Panagiotakopoulos: So we accomplished an ISO-9001 certification in our current Hamilton property, and we’re going for our EU GMP, of course, to be able to export our oils and our dried flower cannabis to Europe. We have a partner in Germany that’s helping us through the regulatory process there. We have interests in South America as well, but what we really want to focus on is the Canadian market right now, because it is the fastest-evolving out of all the countries right now. And solidifying your footprint here helps to go global.

James West: Do you envision focusing or participating any way meaningfully in the evolution of the Cannabis 2.0, as they’re calling it here – the edibles and beverages?

Bill Panagiotakopoulos: Absolutely. We actually are launching four new products this fall, and in December, of course. The vape pen market, which is the highly-anticipated, very lucrative market, we will be in that. We’re looking at a powder and a pill, which is novel right now in the industry. What we did is, one of our, the IPs, the intellectual properties that we’ve been working on for the last three years, is a co-crystallized cannabinoid that is, along with an excipient, makes it extremely water-soluble and makes it dose-able, so you can actually properly dose it. And you can take this, we’re going to offer it in a cap and in a, it’ll look like a sugar packet. So you can carry this around and take it to wherever you want.

You want to add it to your tea, your coffee, your water, your sports drink, pancake mix, muffin mix…it becomes, now, an additive. It’s an ingredient. It’s food-grade, and it works really well. Odourless, colourless, it’s one of the most exciting aspects of Beleave, in my opinion.

James West: Great. What kind of brand evolution are you looking at in the long term? Like, do you guys, you’re going to have another 90,000 square feet; are you going to evolve more brands, or are you going to focus on distributing the brands you’ve got now to a broader audience?

Bill Panagiotakopoulos: James, honestly, we can’t even keep up with the demand right now. What I’d really like to do is actually satisfy the demand that we have for our Seven Oaks and Beleave products, and then really focus on maybe further brands. But for right now, we really want to satisfy the market, our customers, and say, Here, guys: we have more product for you. You know, enjoy it.

James West: That’s a great attitude. I wish more growers had it. Okay, Bill, we’re going to leave it there for now. We’ll come back to you very soon. And thanks for joining me today.

Bill Panagiotakopoulos: Thank you.

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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