True Leaf Medicine International Ltd - Rockstone...
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Isabel: Today I would like to introduce you to the CEO of True Leaf, Darcy Bomford. Hi Darcy, it is great to meet you. Darcy: It is great to meet you, too! Isabel: To get to know a bit more about you, tell us what your background is and how you became CEO of True Leaf? Darcy: I’ve always loved pets and started my career by working for a veterinarian out of high school. When I was 18 I started a pet food company and grew it to over $7 million in annual sales over time. In 2010 I took it public in order to raise capital for rapid growth. We were growing fast but losing money and ran into problems with the bank. I ended up losing the company to some investors who bought the banks security and exited in 2012. This was extremely unfortunate, but not an uncommon scenario when things don’t go as planned. The investors continued with the brand and I signed a non-compete agreement to stay away from the pet industry for a period of time. In late 2012 the federal medicinal cannabis program in Canada was making a change and they were allowing companies to become licensed producers of medicinal cannabis and sell under a direct consumer model in Canada. I recognized that times were changing and this was a good opportunity to get into a new market. I formed a company called ‚True Leaf Medicine’ and was an early applicant in the federal medical cannabis program, called the ’MMPR’ or Marijuana for Medical Purposes Regulations. Isabel: That explains already a bit how your company is structured. True Leaf is very interesting for many reasons. First of all you are one of the Girst companies that applied for being licensed to grow and sell medicinal cannabis in Canada in 2013. And you are very successful with the other division of your company, which sells pet food made of hemp in many different countries. On the medicinal cannabis front you recently had very exciting news that you are at the Ginal stage of application for a cannabis production license. I read that it is a long process with 7 phases. Can you give us a little summary about the process from 2013 until today? Darcy: Sure, True Leaf was initially number 48 to apply, out of the over 1500 who have applied to date. A few got through initially and then the program came to a halt. There was a government change in Canada to the new Prime Minister, Mr. Trudeau – who supports the legalization of recreational cannabis in Canada. When he formed the new Liberal government things changed and the licensing resumed at a faster pace. Initially, we had applied and gone through a few steps. There is an application review process where they ask you all kinds of questions related to the application, like the facility etc. Then there is a security clearance step for all your key personnel and ofVicers and directors, who are required to have a high level of security clearance. That is where a lot of companies get held up. We had been at that stage for probably two years, but recently passed through. Since the beginning we sent over 2500 pages of supporting documentation to the government, but are now at the ’pre- licensing’ stage, where you to start to build a production facility and Vile all your procedures. When you are ready, the government representatives come and inspect the facility and once meeting all of their criteria, are approved. Isabel: Because this licensing application was a long process of submitting forms and documents to the government and then waiting, you were far-sighted to successfully introduce in the interim a line of hemp-focussed supplements for pets Interviewing Darcy Bomford True Leaf Medicine International Ltd Trading Symbol: CN: MJ Bio Darcy Bomford has three decades of executive management experience and a 30-year history of manufacturing pet products in three federally inspected plants throughout the USA and Canada. Highly adept at building brands through corporate vision, strategy and the successful development of relationships with team members and strategic partners. Fun facts My hobbies: Cycling, Snowboarding and my pets My favourite airport: Vancouver My favourite tradeshow: Interzoo My favourite commodity: Hemp With this person, I would to have dinner with: Elon Musk If I could have a superpower, it would it be: Being able to fly My role model: Richard Branson Interviewing Darcy Bomford - True Leaf Medicine International Ltd. page 1 Interview from the 7th of August 2017
Transcript of True Leaf Medicine International Ltd - Rockstone...
Isabel:TodayIwouldliketointroduceyou to the CEO of True Leaf, DarcyBomford. Hi Darcy, it is great tomeetyou.
Darcy:Itisgreattomeetyou,too!
Isabel:Togettoknowabitmoreaboutyou, tell us what your background isandhowyoubecameCEOofTrueLeaf?
Darcy:I’vealways lovedpetsandstartedmy career by working for a veterinarianoutofhighschool.WhenIwas18Istartedapetfoodcompanyandgrewittoover$7millioninannualsalesovertime.In2010Itook itpublic inorder to raisecapital forrapidgrowth.We were growing fast but losing moneyand ran into problems with the bank. Iended up losing the company to someinvestors who bought the banks securityand exited in 2012. This was extremelyunfortunate, but not an uncommonscenariowhenthingsdon’tgoasplanned.The investors continued with the brandandIsignedanon-competeagreementtostay away from the pet industry for aperiodoftime.In late 2012 the federal medicinalcannabisprograminCanadawasmakingachangeandtheywereallowingcompaniesto become l icensed producers ofmedicinalcannabisandsellunderadirectconsumer model in Canada. I recognizedthat timeswere changing and this was agood opportunity to get into a newmarket. I formed a company called ‚TrueLeafMedicine’andwasanearlyapplicantin the federalmedical cannabis program,called the ’MMPR’ or Marijuana forMedicalPurposesRegulations.
Isabel:Thatexplainsalreadyabithowyourcompanyisstructured.True Leaf is very interesting formanyreasons. First of all youareoneof theGirst companies that applied for beinglicensed to grow and sell medicinalcannabis in Canada in 2013. And youare very successful with the otherdivision of your company, which sells
pet food made of hemp in manydifferentcountries.On the medicinal cannabis front yourecently had very exciting news thatyou are a t the G ina l s tage o fapplication fora cannabisproductionlicense. Ireadthatitisalongprocesswith7phases.Canyougiveusa littlesummary about the process from2013untiltoday?
Darcy: Sure, True Leaf was initiallynumber48toapply,outoftheover1500whohaveappliedtodate.A few got through initially and then theprogram came to a halt. There was agovernmentchangeinCanadatothenewPrime Minister, Mr. Trudeau – whosupports the legalization of recreationalcannabisinCanada.WhenheformedthenewLiberal government things changedand the licensing resumed at a fasterpace.Initially, we had applied and gonethrough a few steps. There is anapplication review process where theyaskyouall kindsof questions related totheapplication, likethefacilityetc.Thenthere is a security clearance step for allyour key personnel and ofVicers anddirectors, who are required to have ahigh level of security clearance. That iswherealotofcompaniesgetheldup.We had been at that stage for probablytwo years, but recently passed through.Since the beginning we sent over 2500pages of supporting documentation tothegovernment,butarenowatthe’pre-licensing’ stage, where you to start tobuild a production facility and Vile allyour procedures. When you are ready,the government representatives comeandinspectthefacilityandoncemeetingalloftheircriteria,areapproved.
Isabel : Because this l i censingapplication was a long process ofsubmitting forms and documents tothegovernmentandthenwaiting,youwere far-sighted to successfullyintroduce in the interim a line ofhemp-focussed supplements for pets
InterviewingDarcy Bomford
True Leaf Medicine International Ltd Trading Symbol: CN: MJ
Bio
Darcy Bomford has three decades of executive management experience and a 30-year history of manufacturing pet products in three federally inspected plants throughout the USA and Canada. Highly adept at building brands through corporate vision, strategy and the successful development of relationships with team members and strategic partners.
Fun facts
My hobb i e s : C y c l i n g , Snowboarding and my pets My favourite airport: Vancouver
My favourite tradeshow: Interzoo
My favourite commodity: Hemp
With this person, I would to have dinner with: Elon MuskIf I could have a superpower, it would it be: Being able to flyMy role model: Richard Branson
Interviewing Darcy Bomford - True Leaf Medicine International Ltd. page 1
Interview from the 7th of August 2017
InterviewingDarcy Bomford
True Leaf Medicine International Ltd. Trading Symbol: CN:MJ
Interviewing Darcy Bomford - True Leaf Medicine International Ltd. page 2
political statementtheymade.Isabel: Keeping
under a new division called TrueLeaf Pet Inc., and therefore togenerate revenue in Nor thAmericaandEurope.Addinghemptopet supplements –howdid yougetthisidea?
Darcy: Hemp is an ingredientwhichhasseveraluniqueproperties.Weareusing the hemp seedwhich hasmanyunique properties including being richin omega3’s and other properties thath e l p w i t h i n V l amma t i on a ndhypertension etc. Recognizing thathemp could be a very unique petproduct additive and knowing the petindustrysowell,wethoughtitwouldbea great idea for pet supplements. TrueLea f ' s new pe t p roduc t s a remanufacturedwith hemp, andwe alsoaddotheractiveingredientstoenhancethehemp.Itisnotjustthehempthatisdoing the work. It is a sort of acombination of these other ingredientsthatsuperchargethehemptoworkevenbetter.TrueLeafoffersthreeprimaryproductsforpets.Forexample,thereisoneforhipandjointfunctionforolderdogs.Asyouknow, dogs age like people and theyhavethesameissueswithhipandjointfunction.Itishardforthemtojumpintothe car, go for longwalks etc.That is abig market and is mainly treated bystrong pharmaceutical products, whichyougetfromyourvet.Ourgoalistohavemorenaturalproductsforpetswithlessharmfulsideeffects.
We have two other products, one is acalming formulation and the othersupports healthy heart activity. Thecalming formula has hemp seed oil asthe base ingredient, and then we addinnovativeingredientssuchasanaminoacid derived from green tea, whichproduces a calming function, andcamomile and lemon balm extract,whichareknownascalmingherbs.Thelast formula supports the immune andvascular system - we add Vish oil andpomegranate, which is an antioxidantsupporting immune function andvascularhealth.Isabel: That sounds so good that Ialmost want to have one of thesechew sticks. And it sounds also like
thatitiseasiertosellhamburgerstopeople than producing and sellinglicensedpetfood!?
Darcy:(laughs)Thatisnottoofarfromthe truth. It is very difVicult andeverybody has their own rules. Butbecause I have beendoing thismost ofmylifeIhaveagood knowledgeabouthowitworksinthismarketplace.
Isabel:TheannouncementtolegalizecannabisinCanadawasthissummerandthelawissupposedtobeinplacesummer2018,isthatright?
Darcy:Thatiscorrect.
Isabel:Anditisafactthatthisisgoingtohappenlikethat,right?
Darcy:Yes,currentlythereisamedicinalcannabis program where you areallowed to go to your doctor and get aprescription issued, and then you cancan send the prescription to a licencedproducer and buy medicinal cannabislegally.Rightnow,thereareaboutViftylicencedproducersinCanada.However,withthenewupcominglegislation, cannabiswillbe made available for recreational usewithoutaprescriptioninmorelocations- similar to purchasing alcohol ortobacco. Prime Minister Trudeau is asupporter of the program, and hebasically toldeachprovince thatby July2018itisgoingtohappen,anditisuptoeach province to Vigure out a sales anddistributionsystem.Iftheycan´tVigureitout, then he is still going to allow thelicensedproducerstosellnationwidebymailordirect-to-consumer.Heisputtingalotofpressuretomovetherecreationalprogramforwardanditlookslikeitwillhappenregardlessofwhattheprovincesdo.
Isabel: So tellmehow itworks.Howlong does a cannabis plant need togrowuntilyoucanharvest?Doestheplantgrowbackorhowoftendoyouneedtoplantnewones?
Darcy:Wearegoingtogrowcannabisinan indoor environment under verycontrolled conditions. You Virst harvestthe Vlower, or the bud of the plant, andthenyoudryitandthereare5cyclesper
year. A licenced marijuana producercanselldriedmarijuanaorextractandsellcannabisoil.The amount of production capacity acompanyhasisofcoursebasedonthesquarefootageofthegrowingareaandtheamountofsecurity installedatthefacility. Cannabis production is verycapital and area intensive, that iswhysomeofthesecompanieshave100,000to 300,000 square foot productionfacilities-becausetheyneedthismuchspacetogrowtheplants.
Isabel: How much will it cost toproduce one gram of cannabis andfor how much can you sell theproductlateron?
Darcy: It is a very good question.Currently on the blackmarket peoplearegrowingcannabisforaboutadollarper gram to produce. But if you aregrowing cannabis under a healthCanada system or a regulated systemfocusedonqualityitwillnaturallycostmore.We have indications from companiesrangingbetween1,50 to3dollarspergram, depending on how efVicientlythat licensed producerworks.We aretargeting production costs ofsomewherearound1,50to2dollarpergramandweexpecttheretailpricepergram is going to be between 8 to 12dollarsagram-dependingonthestrainandtheamountofactives.
Isabel: What exactly will youproduce? Are you targeting themedicalsegmentoralsothe„justforfun“recreationalconsumer?
Darcy:Ourfocuswiththepetdivisionis that we are helping pets andimproving their quality of life withproducts for calming, joint pain andimmune function. The model for thehumanmedicinalcannabissidewillbethe same “quality of life“mission.Weare going to focus on the medicinalproperties of the plant and basicallyproduce more natural, therapeuticproducts to help people who sufferfromanxiety,pain,inVlammationissues,andinsomnia....weseeabigmarketforeach. We also want to have productsthat are easy for people to take, for
InterviewingDarcy Bomford
True Leaf Medicine International Ltd. Trading Symbol: CN:MJ
Interviewing Darcy Bomford - True Leaf Medicine International Ltd. page 3
political statementtheymade.Isabel: Keeping
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example gel capsules, which is a moresaferwaythaninhalingcannabissmoke.
Isabel:Ithinkyouareright.Thereis a bigmarket for these commonproblemslikeanxiety,painetc.Allcommon painki l ler or anti -inGlammatories are so chemicaland people are often looking formore'natural'solutions.
Darcy: Yes and there are no sideeffects. There is one other reallyinterestingthingaboutthehempleaf.There are varieties of hemp leaf andmarijuana.Therearetwomainactiveingredients. One is THC. That is theone that makes you high. And thenthere is CBD, which has beendiscoveredthelastfewyears.Itisnotpsychoactive, so it is not making apersonhigh,butithasverypowerfulmedicinal properties. It is themainingredient that seems to helpchildren with epilepsy and is alsovery good for pain and many othersymptoms that it is treating withgreatresults.
Isabel: Can you Gind these hempGields in Canada? In Germany youcan see themquiteabitnow. It isusedmostlyforclothing,Ithink.
Darcy: Yes, Canada is a very largeproducer of hemp, I think it isnumber two in the world. However,farmers are mainly producing hempseeds and extracting them for hempoil.Theyhavetodestroytheleafanddon’t have a huge market for theVibre. But you are right, in Europethere is big hemp industry, butmostly for the Vibre and not theseed....butthatmaybechangingsoon!
Isabel: What are the next stepsnow?WhendoyouexpecttheGinalokfromthegovernment?Andwhathappensafterthat?
Darcy:We are very excited becauseprogress within each division isprogressingrapidly.We have these two divisions: TrueLeaf Pet, which features all of ourinternational pet products and TrueLeafMedicine,whichisourmedicinalcannabisdivision.
We are hiring more people for eachcompany and creating a very solidteamforeach.WithTrueLeafPetweare launchingmoreproducts andaredoing reallywell.We just closed oursales last March at just under$300,000dollars. It isnota lot,but itisgoodstartforalittlecompany.Thatcompany isdoingreallywellandourmonthly sales are increasing rapidly.We hope to be reporting some goodViguresforourVirstquarterthisyear.
On themedicinal sidewearemovingahead with our licensing applicationto Health Canada. We are spendingmoney on the medicinal cannabisproduction facility in Lumby, BC inpreparation for the visit fromHealthCanada . The company is a lsolaunching a crowd funding campaignin the US, which is interesting andvery innovative. We are going to betheVirstpubliccompanyfromCanadatohavearegulationA+crowdfundingoffering in theUS. This enablesus tosell small amounts of shares to thesame people that are buying ourproducts. They will basically be ableto click online and buy shares right
through our website that they cantradefreelyontheOTCmarketintheUS.We are pretty excited about thenew way to get shareholders andhoping to raise up to 10 milliondollars, starting in early SeptemberunderthatplatformintheUS.
Isabel:Thatisinteresting,becausemynextquestionwas going tobethat you did a Ginancing inMarchand I was going to ask how doesyour Ginancial situation look likeright now? But you basically toldmenowwhatyouareplanningonthatside.When do you expect to makeproG i ts wi th the True LeafMedicinedivision?
Darcy:With theTrue LeafMedicinedivision we hope to be sellingmedicinal cannabis under the newprogram by July of 2018 and thenapproximately a year later, by latesummerorfall2019,tobeatabreakevenlevel.
Isabel: How much of True Leafdoesthemanagementown?
Darcy : Managemen t owns as igni V i cant amount . We haveapproximately 70 million sharesissuedwith about 28million ownedby management, which is a solidindication of our faith in thecompany!
Isabel: Darcy, it was such apleasuretotalktoyou.Ilearnedalot!Thanksforyourtime.
Darcy:Thanksforhavingme.Itwasapleasureforme,too.
Interviewing Darcy Bomford - True Leaf Medicine International Ltd. page 4
Share Structure: (as of 9th of August 2017)
Outstanding shares: 69,84 millionMarket Cap: C$32,12 million52 weeks high/low: C$0.56 - 0.17
Corporate Information:
32 - 100 Kalamalka Lake RdVernon, BC, V1T 9G1
☎ 1-778-475-5323
True Leaf Medicine International Ltd. Trading Symbol: CN:MJ
Asweworktowardsourinitialgoalof becoming a licensed medicinalcannabis producer in Canada, TrueTrue Leaf Medicine InternationalLtd.wasfoundedin2013andhas2divisions: True Leaf Medicine Inc.andTrueLeafPetInc.True Leaf Medicine Inc. began as a‘Licensed Producer’ applicant inCanada’s Marihuana for MedicalPurposes Regulations (MMPR)program. Shortly thereafter, thefederal government changed itsposition onmedicalmarijuana. It isnow governed by the Access toCannabis for Medical PurposesRegulations (ACMPR) program andmany applicants have either goneout of business or have declined tocontinue down the difVicult road toachieve license approval. The teamatTrueLeaf continues topersevereand the company’s application is ingood standing in the securityclearance stage. In 2015, whenf ede ra l g ove rnmen t l i c en se
approvalsmarkedly slowed down,the True Leaf team gathered tobrainstorm on how to generaterevenuenow.
True Leaf Medicine InternationalLtd. is now organized into twodivisions, True Leaf Medicine andTrueLeafPet.
TrueLeafPethas entered the fastgrowinganddynamicpet industrywith an innovative hemp-focusedproduct offering. The company’sinitialproductlineprovideshemp-based antioxidant, joint andcalming support in a soft chewformat that is sold in the USA,Canada and Europe. The companyis focusing on the specialty petstoremarketinitially,withplanstolaunch additional products in avariety of formats to the specialtypet and other select markets aspartoftheirlongtermplan.Statisticsshowthatconsumersare
looking for higher quality petproductsthataddresshealthneedsand improve the quality of life oftheir animal companions. TrueLeaf Pet’s product formulationscapitalizeon the signiVicanthealthbeneVits of hemp and address thismarket demand by marketingnatural products focused onproviding 'quality of life' for ourfour-legged companions. This is averyexcitingtimefortheinvestorsand management team of TrueLeaf.
