We will be producing industry best, high quality medical cannabis utilizing the latest and best technology and processes for selecting, reproducing, growing, harvesting, drying, extracting, certifying, storing and packaging our product. By embracing industry-best scientific techniques and equipment, we will be able to differentiate our brand within the Canadian marketplace. Our high end and efficient grow rooms employ the latest in environmental controls and CO2 enrichment technology and will be designed to facilitate both hydroponic and soil growing mediums.
The Canadian Medical Cannabis Market
Historically, the Canadian medical cannabis supply has been from unregulated legal, quasi-legal, and illegal home grow operations. Since the Health Canada MMPR regulations became effective in 2013, this industry has been going through a significant transformation, with the objective of eliminating most of the illegal grow operations.
A. OUR CLIENT NEEDS
To meet our profit projections, we expect to need only the following number of MMJ clients. You’ll see that there is a significant difference between the average civilian MMJ consumption, at 1.5 grams per day, and the average military veteran – normally treating their PTSD – at 5 grams per day.
B. OUR MARKETING PROGRAM
We plan to be operational by the end of 2017 or within the first quarter of 2018, depending upon the timing of Health Canada’s inspection and approval timing for the facilities we will be building. At least six months before we are operational, we will launch a professional ecommerce website which we’ll eventually use to display photos of our range of cannabis products, along with strain, CBD/THC concentration ratios, weights and pricing information. Our customers will then be able to place their orders online, make their purchases with credit cards, and we’ll fulfill their orders through the secure Canada Post and Purolator services.
Until we are actually able to commence our online sales program, we will use the website to keep our potential clients advised on our progress towards obtaining our Health Canada License to Sell.
Our MFT Connection – Fortunately, as identified earlier within The Prior Performance Section VIII of this document, Riley McGee, a principal of General Partner 1779265 Alberta Ltd., is both a Canadian military vet and the Director of Western Canada Operations for Marijuana for Trauma Inc. “MFT”. MFT is Canada’s largest and fastest growing MMJ patient aggregator. It was founded by Canadian military vets to serve the specialized needs of vets with PTSD, and has retained that focus. With MMJ members now exceeding 4,000 and what MFT believes to be a realistic goal of exceeding 8,000 members by 2018, the patients our Partnership needs to meet or exceed our profit objectives should be quickly achieved. MFT, currently with thirteen cannabinoid therapy clinics in Canada, offers its members cannabis coaching and education, lectures, cooking classes, product processing, vape lounges, smoking area and peer support programs.
Under our General Partner Riley McGee’s direction, ten more MFT therapy clinics are planned to be established in Western Canada by 2018. The first, in the heart of Edmonton, is now operational.
Corporately, MFT recently concluded its purchase of controlling interest in AbbaMedix, a publically traded company with a Health Canada licensed vault for legally sourcing its MMJ from LPs best suited to MFT’s needs. MFT’s goal is to create the best MMJ menu in the industry from which its members can choose.
More information on the MFT Group is found at http://mftgroup.ca/about-us/, where you’ll see:
Marijuana for Trauma Inc. (MFT), is a veteran owned and operated company whose mission is to improve the quality of life for anyone suffering from Post-Traumatic Stress Disorder, chronic pain and/or other medical conditions. We have a list of highly educated, compassionate and understanding doctors that are willing to consider Medical Cannabis as your solution to better health.
Our trusted staff includes a highly knowledgeable strain consultant, natural health/detoxification expert and a compassionate client care registration team, all of whom are here to ensure our clients receive quality medical marijuana through impeccable service.
So, how does this help our Partnership? We now have formal agreement by which MFT agrees to purchase all the premium MMJ bud that we produce at $4.75 per gram, which is only $0.32 per gram less than our Target Price of $5.07 that we’ve used for our profit projections.
With the benefit of the $4.75 per gram MFT purchase commitment in hand for whatever we wish to sell them, and our ability to sell retail at premium prices on our own ecommerce website, we expect that we will be able to considerably exceed our target $5.07 average pricing assumption.
For example, should we eventually sell 50% of our production to MFT at $4.75/gram and the balance at a retail price averaging $8/gram, our average premium bud sale price would be $6.38/gram, a 25% increase in achieved sales over our target, which increases just our first full year’s projected distributable cash flow from $1.1 million to $1.4 million. Alternately, should we choose to sell all of our 1st year’s production at the MFT $4.75/gram price, our year one distributable cash flow is projected to still exceed $1 million.
We expect that the markets for the CO2 extracts we choose to produce will be strong, including sales to those producing and selling infused edibles, capsules, hot and cold drinks and vape pens.
A useful pricing perspective, within the maturing Colorado cannabis market, is provided by the accompanying advertisement, published in an email from http://www.thecannabist.co on 29th February 2016.
The US$30 per 1/8th is Good Chemistry’s price for 3.5 grams, or US$8.57/gram, which converts to approximately C$11.00/gram, or more than double our projected 2018 pricing.