On May 26, 2020, Heritage Cannabis (CANN.C) announced that it will be launching its own series of formulated extraction products under the brand name Purefarma, “which will be sold through Voyage Cannabis, a licensed subsidiary of Heritage”.
This announcement is the final piece of CANN’s 2020 jigsaw puzzle.
Six weeks ago, Heritage announced that its subsidiary Voyage Cannabis has been given a cannabis oil sales license by Health Canada.
Voyage can sell weed products, including oil derivatives, to provincial cannabis boards as well as directly to patients in the medical market.
Heritage was ramping up plans to sell cannabis oil, including its direct-to-vape, all natural oil products. CANN’s proprietary extraction methodology uses high pressure systems and no harmful chemicals. Pending Health Canada product approvals, Heritage plans to launch a line of full spectrum CBD tinctures.
“Our extraction division, Purefarma, has built a reputation for quality and purity,” stated Clint Sharples, CEO of Heritage, “this license allows Voyage to offer these products directly to this growing market in addition to our contract manufacturing business.”
A week later, Voyage Cannabis was granted an industrial hemp license by Health Canada, allowing Voyage “to bulk store, as well as buy and sell industrial hemp, flowering heads, leaves or branches to other license holders, and to import and export grain”.
In this Proactive Investor interview, Heritage CEO, Clint Sharples explains the significance of that milestone.
Heritage has been producing full spectrum CBD from high quality hemp biomass as part of its medical and recreational product initiatives.
“We are now able to purchase and store greater quantities of hemp on both sides of the country and can further support hemp farmers by augmenting their storage capacity in a controlled environment,” stated Sharples.
Today’s news puts these prior milestones into focus.
“For those of us who started Purefarma Solutions as a company, and others who have been integral to its success over the years, it is very exciting to see this long-established business become a brand that will be carried on shelves in Canadian cannabis stores,” stated Graeme Staley, co-founder of Purefarma, and now in charge of strategy for Heritage. “We established a reputation for creating high-quality, award-winning cannabis oil, and this reputation shapes our foundation as we make our products widely available to the public.”
The Purefarma brand will be sold through recreational channels and will feature several products that consumers have previously identified with having potential medical benefits, including CBD (cannabidiol) tinctures and a CBD vape pen made without any carrier oils or added flavours.
Heritage will announce a full line of products in the coming weeks as they are made available on store shelves and on-line via the provincial cannabis boards.
Heritage will focus on marketing the Purefarma products initially in British Columbia and Alberta, with plans to expand the marketing strategy to the rest of the country in the near future.
Two months ago, Heritage released its Q1, 2020 financials.
Key Q1, 2020 highlights (in $CAD):
- Revenue of $4 million compared to ZERO in Q1, 2019
- Gross Margin of $1.5 million (37%)
- Net loss of $2 million compared to $3.8 million in Q1 2019
- Positive cash flows anticipated in fiscal 2020
- Cash position of $9.3 million
- Working capital of $14.8 million
“Heritage’s first quarter in 2020 showed continued growth in revenue,” stated Sharples, “We have a strong balance sheet that we believe will support the company through this time and we have taken steps to preserve cash balances.”
“Heritage has done a host of deals with partners, suppliers, vendors, and acquisitions, that have brought them licenses and steady product supply and got them on shelves fast,” stated Equity Guru’s Chris Parry on February 8, 2020, “Heritage’s first revenues EVER came through in this past quarter at $3.56 million. We’re used to small cannabis outfits coming out of the blocks with a digit less than that”.
“We have been eager to introduce Canada to the formulated extracted products we have created using our proprietary technology,” stated Sharples. “We intend to meet demand by providing consumers with high-quality products at a reasonable price.”
Growing cannabis revenues, shrinking losses, a healthy balance sheet – and now a pathway to selling branded extraction products into the Canadian market.
Full Disclosure: Heritage Cannabis is an Equity Guru marketing client.