RavenQuest BioMed Inc (CNSX:RQB) Autumn Updates and Future Developments
RavenQuest BioMed Inc (CNSX:RQB) (OTCMKTS:RVVQF) (FRA:1IT) CEO George Robinson joins Midas Letter to discuss the company’s latest developments in their Edmonton facility, exportation to Australia and the recent claim against RavenQuest for IP violation. The CEO can’t comment at length as the claim is in front of the courts but insists the company have put very strong internal processes together. The Edmonton facility is filling with plants – with grow rooms two and three filling on target – the company are just waiting for a Health Canada decision before the facility’s reaming five rooms come online. Through RavenQuest’s partnership with MedCann, the company have a guaranteed supply chain movement through all the customs and regulatory bodies for exportation to the Australian market. The CEO also comments on RavenQuest’s global footprint and the company’s plans specifically in Europe.
James West: I’m joined now by George Robinson, CEO of RavenQuest BioMed, trading on the CSE under RQB. George, welcome back.
George Robinson: Always great to be back, James.
James West: You bet. George, quick question: I saw a press release today, somebody’s making a claim for IP violation against RavenQuest. Do you care to comment on that?
George Robinson: Sure, I’ll comment, but the crumb is really, it’s in front of the courts. But we’ve put a very strong internal process together; it is really looking very good for us. But we’ll leave it at that. We’re excited to delve into this thing and deal with it, but it’s before the courts.
James West: Okay, let’s then start with an overview of what’s happening in Edmonton right now at your plant, there.
George Robinson: Well, last time that you were there and you shot the video, we had the Grow Room One completely full, as you seen. Grow Room Two is starting to fill and Grow Room Three is starting to fill. And then lastly, we’re just waiting for Health Canada to do its thing to get the other five rooms that you noticed when you were there, up and running. Somewhat frustrating; Health Canada has had some information from the last couple of months, and we just haven’t heard back from them. But we’ll continue to press them to get that going on.
But everything is on target and on plan, and Grow Rooms One, Two and Three are looking fantastic.
James West: Sure. You recently announced that you have received an export permit to send some product to Australia. Give us an update on what’s happening there.
George Robinson: Yeah, you know what? We see Australia as an important place for us to be. I mean, we’d like to see the sun never set on RavenQuest, so to do that, we have to be able to find really great partners, and our partner out in Australia, MedCann, is just fantastic. So we’ve shipped the product, it’s made it there. We’ve just got notice today that they’ve received that product. So now we have a guaranteed supply chain movement through all the customs and all of the different, let’s say, regulatory bodies, so now we get to move forward on that. So it’s really exciting times for us to find yet another place and another diverse revenue stream for RavenQuest.
James West: Sure. You have been sort of moving, making moves, in Europe and around the world; how is the whole global footprint coming for RavenQuest?
George Robinson: I just think you need to take a look at it outside of RavenQuest. I think what’s happening out there is, people are starting to realize that the largest part of the consumption is really occurring in the medical market, and if you’re focused on the medical market, Europe really tends to be the place to be. So us, our continue to push to move into Portugal and establish a processing and final product development, gives us the opportunity to sort of not have to get into import and export permitting.
Once you’re cultivating in Europe and especially in Portugal, being an EU member, we can then ship on purchase order demand to any of the countries that are in that space. Two, it kind of reduces the amount of cost for shipping overseas, takes away about 8 to 10 weeks in application and permit processing on every order from Canada to there. It’s an extremely important piece to look like, and we do look at a minimum 400 people. It’s a huge, huge market that you have to be in.
James West: Right. Okay, so then, do you see that the evolving landscape in Europe is still more of an opportunity for players who are not European, or do you think that Europe’s eventually going to sort of backfill its own production sort of scenario, with its own players? And in terms of, like, the opportunities for companies like RavenQuest, how do you see that playing out in the future?
George Robinson: Well, you know, there’s a lot of interest amongst European-based companies to come in, but essentially, today, most of them are asking for Canadian partners. The reason why is that we’ve got some lifetime, we’ve got some regulation, and we’ve got some proof that what we know how to do to produce good cannabis is something that we’ve already figured out.
But in time, I think that will balance. So if you don’t move there quickly enough, I think that’s, in fact, where the problem will really exist, that if you’re then, maybe three to five years from now, trying to ship in there, just the shipping costs and other things will make it hard to deal with.
But it’s no doubt that even seeing France get into a two-year testing period, you’re starting to see some countries that were not really part of this discussion even 12 months ago, have entered into the discussion of medicinal cannabis. So I just see that as a huge market, much easier to work in than in the US, having different regulations state to state.
I see this as being a very, very attractive market, and if you don’t go in early and create a footprint, I think it’s going to be very difficult for late players to come into a piece of that market.
James West: Okay. I wanted to ask you, because you are, you know, you have your finger on the pulse of the entire Canadian industry – HEXO came out with a half price marijuana, basically, and some other companies are starting to follow suit. Do you think that’s going to drive the cost per gram down for consumers at the expense of LPs generally in Canada, now?
George Robinson: Here’s what I think is going to happen, is that mid-grade cannabis, however that’s the find, but let’s say, consumers have started to realize that they’re not going to accept low quality product. That means taste, texture, moisture levels. So what’s happening, and to respond to that, people who may want to enter in and move product, are going to have to reduce that price. So this is the commoditization of the industry.
So if you’re going to be a big player, with multiple hundreds of thousands of kilograms, maybe this is the action that you’re going to have to take. I think RavenQuest, at 11,000 kilograms, is nicely positioned to still offer a high quality product into the recreational space. But we’re still medicinally focused. We’ll have a portion of our product that goes in there, but we’re not going to compete with those who are trying to sell 200,000, 300,000 or 600,000 kilograms into the retail market here.
I think that’s just a race to the bottom.
James West: Sure. When we visited you there last, you were discussing some new lighting strategies that you were going to be deploying on an experimental basis. Have you deployed those, and if so, how is it working out?
George Robinson: So we’ve got the lights in, and we’re going through all the testing of the lights. And what does that mean? We’re looking at room temperatures, we’re looking at PPFE, it’s just a measurement of light density. That’s happening. We should be loading that garden up, now that we’ve tested the lights; we know that they will last for the total life cycle of eight weeks. Now the plant material will be going in there. So it’s already gone through all of the initial testing, it’s proven out. We’ve taken a look at cooling temperatures and temperatures around the light source; we’ve looked at air flow. So we’re ready to go in there.
So from what I understand from the production team, I guess early next week, now it’s late this week, that that cluster will be filled with cannabis light. But we’re really liking what we’re seeing right now from overall light spectrum, and this is a spectrum developed by (unintelligible) energy car and our design team. And we’ve been able to design that very quickly and get it into the facility. So it’s meeting all of the requirements that we want from the spectrum perspective, it’s meeting the requirements for the climate that we want to control it in, so we’re now looking forward to loading it in there, which should be next week.
James West: You bet. All right, George, that’s a fantastic update. We’re going to leave it there for now, and I’ll come back to you very soon. Thank you for the update.
George Robinson: Always great to chat with you, James.