The cannabis markets are sorely in need of some good news and better business practices. But if there’s a silver lining to all of this graft and double-dealing, it’s that in a market full of liars, cheats and thieves, the good companies doing good business have the opportunity to stand out.
That’s why Gaia Grow Holdings’ (GAIA.V) positive test results for their 1494.39 acres of hemp crop in Rockyview County, Alberta matter so much.
“Having a fully tested and compliant product has always been a prerequisite of our success. With positive test results, we maximize the value of our product and ensure positive and longstanding transactions as we forge our sales agreements for this crop and the growing seasons ahead,” said Frederick Pels, CEO of Gaia.
Normally farming isn’t exactly a lucrative bargain. There’s too much overhead for too little payoff, and too many contingencies like weather and insects and other issues to circumvent. When a cannabis company releases something to the press about their build-out, it’s usually a hard-pass. Most of these companies don’t know what they’re doing, and within months they’ll be awash in verticals and seeking shaky fundraising to recoup the sunk costs buried in their warehouses, expensive lighting and hydro-bills.
Gaia’s value preposition is different. Yes. They’re growing hemp, but that’s all they’re doing, and the good news is that they’ve been doing it since 2014. They’ve streamlined the processes and made the rookie mistakes. Rather than put on a front to cover up for a shambolic lack of direction, gobbling up verticals to make themselves the next Canopy Growth (WEED.T) they’re busy doing the work involved in specialization.
The company grows their hemp to scale and under specific parameters to better serve each individual client instead of offering a blanket solution. If a client wants biomass for CBD extraction, then Gaia’s products will angle that way, and if a company wants to make rope, clothing or chewable bites—why not? It is a complete protein—then that’s what they can expect.
Today’s good news involves testing.
Why is the testing important?
Before we get into the why’s, let’s look at what they had tested:
– Cannabinoid Potency: Within the upper percentiles of the limits of X59 genetics
– Microbiology: Pass
– Pesticides (full Health Canada required spectrum): Pass
– Heavy Metals: Pass.
Higher cannabinoid potency means higher quality CBD, one of the biggest uses for hemp-based biomass. Cannabis, like any other plant or food, is susceptible of contamination by different microorganisms during cultivation, processing, preservation and dispensation, and microbiology plays a part in ensuring Gaia’s customers don’t wake up one morning with a bad case of anaphylactic shock from hemp coated in bacteria. Pesticides are somewhat self-explanatory—and sadly, there’s a precedent in the cannabis industry for companies using illegal pesticides.
It’s the heavy metals that may need some explanation.
Companies seeking to improve their environmental record will often seed the parts of their yards at the greatest risk of heavy metal contamination with cannabis and hemp seeds, using process called phytoremediation to draw the contaminants into the plant.
Optimism and good news
Earlier this month, the company circulated samples of their dried hemp product around to a variety of existing processes and a cultivator to try as a physical representation of the sales chats going on since earlier this year. Just like everyone else when we’re looking to buy a new product, it’s not uncommon for companies looking to buy to do internal or third party tests to verify the product’s quality. Gaia has a few potential buyers on the line right now and the company is optimistic about the probability for getting them on board.
It’s good to see some optimism in this market.
Full disclosure: Gaia Grow is an equity.guru marketing client.