November 29, 2019

WeedMD Outdoor Grow Harvest Site Tour – Good Looking Buds

Midas Letter
Midas Letter
WeedMD Outdoor Grow Harvest Site Tour - Good Looking Buds

WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) (FRA:4WE) CEO Keith Merker talkes us through the company’s 27 acre outdoor cannabis grow.  While the results of cannabis crops cultivated outside may vary, from what we saw, WeedMD’s growing fantastic looking buds.  During our visit to the drying rooms, it became even more apparent that the WeedMD outdoor harvest is likely to result in heavy yields.  The buds were large, well-formed, and even though it might not have initially been part of the plan – they can probably sell a portion of it as premium dried flower.  WeedMD also has the option to expand if they like what this year’s crop will do to their balance sheet.  Behind the current area there is enough land to expand significantly.  Not that 27 acres isn’t significant though, it remains to be seen what this will do in terms of revenue and margins, but it does indeed seem very promising for the company to compete for the low-cost crown.

Midas Letter
Midas Letter
WeedMD Outdoor Grow Harvest Site Tour - Good Looking Buds

[stock_chart symbol=”WMD:TSV”]


Unknown Speaker: A lot of folks are worried that the sky is falling across the cannabis industry today. I think we’re here to demonstrate, at WeedMD, that it’s nothing but blue skies for this particular company.

We’ve made a point at being very good at Cannabis 1.0 – at the cultivation of the plant. And we’re building a company for the long term.

Unknown Speaker 2: Here we are on site, where the first harvest from the outdoor field is being dried and processed here at our Strathmore facility.

Unknown Speaker 3: So that strain that we’re standing in now – Wine Gums, or as it’s sold on the consumer market, it’s known as Sweet Sativa – has quickly become a favourite of our patients and our customers. It’s got a really unique terpene profile. It’s going to be one of the most successful and one of the last strains to be harvested in the outdoor field, and our cultivation team has a lot of experience with this plant, growing outdoors.

You can see there’s a lot flower, a lot of influorescence on each plant, and we’re super excited with the yields that you can see around me, behind me, that you’re going to be experiencing here with Wine Gums.

Unknown Speaker 2: So we’re standing in front of one of the many dry rooms that we have in operation as we get through all of our outdoor harvest. This is actually the second or third time these rooms have been filled, and what we’re going to see in here is some of our wonderful Ghost Train Haze that’s now in the later stages of drying.

In this facility right now, we’ve got about 17 dry rooms in operation and processing rooms, and we’ve got air movement from the fans you see around me. We’ve got dehumidification happening and HVAC in the rooms; we’ve got heat, as well. The rooms are fully climate controlled so we can maintain the optimal conditions to get drying in as expeditious a manner as possible.

We did 27 acres outdoors this year. We had over 20,000 plants out there. We are anticipating a harvest in the neighbourhood of 20 tonnes to come from the field. A lot of that product will be Grade A product, so we’re anticipating maybe a 20 percent Grade A, 80 percent extract grade. We’re seeing some great, great buds. You can see behind me, these colas are now, you know, in the later stages of drying, and if you’d seen them fresh in the field, these would have been as large as my arm, many of these buds.

We go through in three cycles, so we go through and we take the top colas first, we take the A grade cannabis off of the plants. We let them fill in for a week. We’ll take the shoulders, or a second pass on these plants, and then after that we’ll go back and take the remainder, which is guaranteed to be high quality cannabinoid-producing, extract-grade cannabis.

Down the road at our second site in Aylmer, we’re now converting it to have actually just commissioned our first extraction machines on site, so we’re now able to ship a lot of this product down the road to our other site to be produced into extracted products for Cannabis 2.0 later this year.

Unknown Speaker 4: So now we’re in our hybrid greenhouse, and down this corridor, there’s actually 18, 10,000-square-foot flowering rooms that are in operation today. These 10,000 square foot rooms are producing north of 300 kilograms per harvest, and so if you take it all together, we’re well north of 20 tonnes of capacity of prime indoor-like cannabis grown from our hybrid greenhouse.

Behind me, you’re seeing finished dried cannabis in bulk form, that’s now been fully harvested. It’s been dried, it’s been processed. WeedMD has established great relationships across the country on the recreational side with all of our provincial partners, as well as retail partners and distributors. And then, on the medical side, we’ve got a booming, growing business with our medical patients, as well as distributing through Shoppers Drug Mart, and we’re currently looking at other opportunities with which we can distribute all this fine product.

In our last reported quarter, in Q2 of 2019, we did about $8 million in revenue, which was a record for the company, showed significant growth over the previous quarter, and you know, we anticipate, given the growth profile of the greenhouse here, that, you know, Q3 is not going to be terribly different just from the standpoint that we have the same production platform.

In Q4, things should change dramatically. That being, we’ve got 10 more rooms now licensed in the greenhouse. I think more dramatically is the 27 acres of outdoor crop that we’re harvesting here. Some of that, again, will make its way to market in Q4. We will see, presumably, a large increase on the revenue side for this company in the fourth quarter of this year, and the heading into Q1 and beyond into 2020.

I’ve got more certainty with respect to the cost than, necessarily, the price per seed. And because that cost is so low, we are now positioned as a low-cost provider in this industry, and we will compete with anyone, anywhere, anytime when it comes to low-cost production. And ultimately that will create great margins for our shareholders going forward.

Unknown Speaker: Many folks in the industry have looked on to other aspects of the space, including extraction and 2.0 products, and ultimately, brands. I truly believe that in the early stage of this industry, if you can’t consistently produce a quality flower that consumers demand, that your business model is at risk. So we’ve made a very cognizant decision to create a fundamental platform that’s very successful, very large, and at a low cost.

I think you can see that we’ve built a platform here at WeedMD and a culture of success, and we look forward to being a low-cost producer of cannabis for the Canadian industry. We plan to be around not only successfully here in 2019, but heading into 2020 and beyond.


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