STOCK TO WATCH: NEXTLEAF SOLUTIONS (CSE: OILS) 📈 – RICH TV LIVE – JANUARY 21, 2020 – Paul Pedersen, MBA
Hi how you guys doing today this is richer in behalf of rich to be live and i’m here with a very special guest it is paul the ceo of next leaf solutions symbol oils how you doing today paul doing great thanks for having me great how you enjoying the conference so far you know it’s good show this is always uh for us oh super vancouver based company so we like to
Have a presence of the show for four company in the b2b space it’s always great for driving commercial relationships and i’ve seen scene folks that everyone’s so busy they got to see them a couple of times a year and you know always always great opportunities to to keep growing the business and and you know looking for new business opportunities with brands and
Cultivators you know we’re looking for opportunities to to outsource a you know difficult part of their business and yeah always a great show for us on the commercial side fantastic now 2020 is starting off great with this conference 2019 was an up in the beginning and then very down year now what makes next leaf solutions unique there’s like 440 companies that
Exist in the cannabis sector publicly what makes you guys special what what is exactly that you do that makes you guys unique we’re a company that became the first publicly traded company to have multiple issued patents around industrial scale extraction and purification of cannabinoids and been a company that has been very successful in acquiring and developing
Intellectual property around the production of standardized thc and cbd molecules we’ve developed eleven issued patents over the last year and we’ve got a license processing facility 45 minutes east of vancouver our business model is built on taking low-grade dried cannabis that i did a lot of that in the industry there’s over 400 tons right now sitting in vaults
Across canada and and and our business models taking that lower grade material turning it into a high purity distillate refined oil that can then be be put into products beverages edibles bait pens and and and really more importantly can be it can actually you know sit in an inventory has an oil for ten years well you know herbal form is is only gonna be good for
Six months so as canada’s kind of slow to roll out we’re really positioned well i think as our other extractors here in canada is there’s a lot of material to process and you know that’s gonna need to be turned into oil regardless of kind of how slow the the retail rolls out here in canada in ontario and in these provinces that i think have been pretty slow so
You know for us a great time i think and really what makes us unique is our focus on not just our extraction business but really developing intellectual property that we think becomes very valuable as you know a big farm a big alcohol big tobacco these large players get into this space i mean these are companies they don’t care about about farmers right they care
About about you know intellectual property around the standardization of cbd and thc based products that can be sold in canada and other markets that are federally legal so that’s really where our focus is and we we think that you know we’ve done over the last three years we’ve taken a very focused approach we’ve been focused on kind of one part of the supply
Chain and we think that’s how great business is their ability very good now our community of investors is in about sixty countries and they love to learn about undervalued underappreciated underexpose companies i think you fall in that category what would you tell an investor that is doing some research and interested in investing in your company and i think
You know first and foremost i would say look at relative investments and look at a company’s market cap and and you know when i like to invest i like to look for 10 baggers myself and absolutely we all like 10 baggers yeah i’ll tell you if if you talked to me a year and a half ago i would have told you that i i wasn’t long any cultivators and what i would have
Told you is that i was i was long on companies we all say weren’t publicly traded at a time but you know guys they’re in the same space as us and if you look back now over the last year i think you know that’s been validated by how how extractors have done relative to companies that have tried to you know do it all but i think most importantly when you look at
You know company like canopy growth let’s use them they’re you know biggest company in the world yeah you look at you know recently they came out and they talked about their 150 issued patents and and what i would say you know first and foremost before even unpacked the value of what those patents even cover i’d say you know you you want to say okay you look at
What those patents are worth on a per patent basis relative to market cap and you look at a company like like next leaf we’ve got 11 issued patents around high-throughput extraction purification and we think that you know if you value those patents on a patent for patent basis and you look at what our market cap is versus you know the biggest player in the space
That has arguably the largest patent portfolio we think that we’re number two and and and that’s a big focus for us because we think at the end of the day investors that that are long oils i think believe in the value of our patent portfolio and we say you know our commercialization of that that’s that that part of the business is free and you know you check back
With us in a year i think what you’re gonna see is that we’ve we’ve done a great job a year from now over 20 20 monetizing our ip through through licensing or patents we recently license two of our non-core patents we’re into revenue already we’re excited to put that out to the markets here very shortly but also we monetize their ip through through extraction
Services told process again in selling molecules so i think that you know that’s the that’s the you know the first thing i always say you know for guys that are that are looking for 10x is you look at you look at you know who is going to be valuable to big tobacco big alcohol you know the last company i was with was acquired by so that ellis has been as taken
A major investment from altria and i say this as every single day you know who does food is an ultra a constellation and imperial i mean they’ve if three of those companies have made investments in this space and and i think you’re gonna continue to see tobacco alcohol pharma big cpg and again you know we we really believe that you know ip is a core part of
Our strategy because that we think that’s how we create a billion dollar business for shareholders as this industry evolves from kind of you know what has been a an illicit industry and now what is you know being commercialized you know in in year two to where we think things are gonna be ten years from about five years from now as you know large transnational
Companies get into it absolutely now you guys have a relationship with beth canada can you talk a little bit about what you guys are doing with them yeah you know beth has i think a perfect example of the types of companies that we like to work with on the downstream so we kind of have an upstream that’s the the farmers the growers you know the guys grow in biomass
That they need to have turned into oil the downstream is is companies like that canada guys that are manufacturing edibles beverages you know products that that you know they know how to manufacture already and they have you know a good understanding of you know consumer packaged goods that’s not what we do we sell standardized molecules so really we love babb
Canada because it’s it’s molecules thc and cbd highly purified come out of next leafs patented extraction distillation plant and then it powers babb khanna’s products we think they’re going to be one of the largest beverage players in canada we think again you know that’s a that’s a segment all two canopies very focused on that because of the the constellation
Brands relationship and we think you know over the long term we were we think beverage is really exciting so for us we’ve got a we’ve got some technology that we acquired recently that allows the the onset time to be sped up from about an hour and a half to two hours for me when i take a traditional kind of beverage or edible to 10 to 12 minutes wow okay and
And so for us we think the value that ip you know has is going to be tremendously valuable moving forward to the companies like bev canada and and other beverage players that are looking for you know highly purified molecules that are multiplied and ready to go and be added to their beverage products fantastic now what can investors expect for next leaf oils in
2020 i think what what you’re gonna see in 2020 you’re gonna see a few more licensing deals where we generate royalty fees from our non-core ip but we’re what i think what we’re most excited to unveil is some of our partners on the downstream product so companies that are that are existing manufacturers of food products that you know now are bringing their their
Infused edible line to market we’re very excited to start making those announcements and then also our program for for cultivators and large-scale outdoor cannabis farmers we think that the outdoor legalization of cannabis has really changed the game and we’re really excited to start announcing some of those relationships as well you know what you think it’s a
Great it’s a great year i mean obviously many farm labs and balance and both done a great job to really validate the model i mean i remember you know two years ago you know biggest lps and the in this space that there’s not another there’s no market for for what you guys are setting up and you know we’re gonna do it all ourselves but i think what what really labs
And and valens have done is they’ve demonstrated there’s a lot of billion-dollar companies that said you know what this is this is quite you know isn’t it as easy as buying equipment and setting it up yeah exactly you know they’re starting to focus on kind of what they do and and and we think that there’s a lot of value and in companies that focus and and again
Continue to push the signs and get and get and get more efficient when it comes to what’s their cost per molecule without oil so i agree with that i agree with that i mean like everybody was vertically integrated vertically integrate everyone wants to be vertically integrate every wants them get their hands involved in everything and why not just become an
Expert in one thing hey you know i faded everyday balance is shown and labs are shown and you guys are showing that if you become an nf canada – if you become an expert in one thing you have a chance but if you’re trying to be jack of all trades master of none does that know what we’re seeing on an entire sector of companies that have blown through in some
Cases billions of dollars canopy growth is burning through 300 million a quarter aurora canada’s last quarter burnt through eighty eight million dollars it’s crazy what and this is a scary thing too because you look at some of these balance sheets so what’s on the balance sheet you got facilities you know but you got facilities that quite frankly you wouldn’t
Build today because a company like next leaf all we care about is how many phd and cvd molecules are in that biomass yeah you know we’d love that biomass to be growing outdoors because it’s gonna be a lower cost per molecule for us so the end of the day there’s a lot of these indoor cultivation facilities that quite frankly you gonna at some point you’re gonna
Shut off the lights because you gonna say well you gonna grow this outdoors in a field once per year you’re gonna process that in oil but the other thing you know the good will the biological assets gonna continue to see writedowns with that and modally and i think in some ways that that’s going to be that’s going to overhang the sector but the one thing that
We know is that canada is the first developed country in the world to legalize the most popular illicit drug globally and there’s gonna be a lot of winners over the long term of course and there’s gonna be companies that you know you and i are gonna be laughing chuckling about in five years from now and said holy smokes i mean guys guys literally blew through
Billions of dollars and and and you know shut off the lights and and you know guys bought the assets for for pennies a dollar and you know it’s it’s in some ways it’s sad but i but i also think you know you look at other industry coke and pepsi don’t grow sugar cane and process it and it’s right you know they do one thing they they in some case that don’t even
Bottle you know they’re they’re they’re formulation and they’re a breath right and and it’s gonna be the same thing in the food so let me ask you a question you’re the ceo so if the right company came to it to the table and offered you x amount of dollars would you sell listen every single day we will do what’s in the best interest of the shareholders that’s
Who i work for you know of my family and i are the biggest shareholders of this company and they and you know you know we got a lot of pride our management team our board we had a lot of probably where it is to build a billion-dollar business and we’re in this to like to make a lot of happy shareholders and you know i love this industry we’ve we’re a group that
Really we built our business on 15 years of experience in the legacy market and we do that that justice by developing ip around around this experience and really scaling it and we think that you don’t have a lot of opportunities again to be in an industry that’s you know as a massive global demand he’s a disruption opportunity and you know for us again we’re
Not looking for any exits we’re looking to build a billion-dollar business that’s why we recently put a shareholder rights plan or poison pill in place we looked at you know some of these hostile takeovers that we’ve seen over the last couple years we we expect that there’s going to be some some hostile takeovers in 2020 we think especially as some of these big
Billion-dollar companies are gonna need to backfill somewhere they’re some of their market cap so we think at the end of the day you know again look at labs look at balance i mean these guys have have with that business model focused on biomass the oil have surpassed guys that had a 2 3 4 year head start absolutely profitability revenue in economics of running
In a great business so we think that you know obviously there’s going to be a lot of opportunities to do m&a transactions but you know for us we’re always we’re always focused on what you know what’s in the best interests of the shareholders and how do we build a great company ok great well i think you’re doing a great job thank you very much for being here
Today for all you guys that are watching next to me solutions this is paul the ceo take a look at them symbol is oils and thank you very much for your time today i wish you all the best of luck thank you very much appreciate every self a great day and thank you guys for watching
Transcribed from video
STOCK TO WATCH: NEXTLEAF SOLUTIONS (CSE: OILS) 📈 By RICH TV LIVEliveBroadcastDetails{isLiveNowfalsestartTimestamp2020-01-21T143508+0000endTimestamp2020-01-21T145137+0000}
