BlissCo Cannabis Corp (CNSX:BLIS) (OTCMKTS:HSTRF) (FRA:GQ4B) CEO Damian Kettlewell shares samples of the company’s recyclable packaging made from materials such as milk jugs and ocean waste. Kettlewell explains that the company receives its dried flower license in November and is currently selling dried flower and prerolls. BlissCo expects to be selling a high CBD cannabis oil, a balanced CBD/THC oil product, and a high THC oil in the summer. BlissCo has a supply agreement with Supreme Cannabis Company Inc (TSE:FIRE) (OTCMKTS:SPRWF) (FRA:53S1), which also has a minority stake in BlissCo. Kettlewell highlights that by producing its own brands, BlissCo differs from other leading extractors in the space, such as MediPharm Labs Corp (CVE:LABS) (OTCMKTS:MEDIF) (FRA:MLZ) and Valens GroWorks Corp (CNSX:VGW) (OTCMKTS:VGWCF) (FRA:7LV). Kettlewell explains the process of certifying BlissCo production facilities as EU GMP compliant and shares details of a recent positive inspection conducted by EU officials at the company’s site.

Transcript:

Narrator: BlissCo Cannabis Corp. is a Canadian wellness cannabis brand based in British Columbia, and a multi-licensed cultivator, processor, and distributor of premium cannabis.

BlissCo owns and operates an 18,000 square foot, state-of-the-art GPP facility located in Vancouver, British Columbia, with extraction, cultivation and processing rooms.

With a license to process cannabis oil acquired in August of 2018, BlissCo’s extraction lab is also in operation, preparing a line of full-spectrum oils for distribution in 2019.

BlissCo Cannabis Corp. is listed on the CSE under the ticker symbol BLIS.

James West: Welcome back. I’m here with Damian Kettlewell; he’s the CEO of BlissCo Cannabis, and Damian, you’ve brought some samples with you.

Damian Kettlewell: We have brought some samples, James, yes indeed.

James West: Okay. So now, you’ve got products on the shelves in the Ontario Cannabis Store and elsewhere.

Damian Kettlewell: Yeah. BC Cannabis Store as of Monday and Tuesday; exciting time in the evolution of BlissCo. We have pre-rolls, three pre-rolls.

James West: What’s that?

Damian Kettlewell: That is a next-generation pre-roll, so that’s an exciting one, James.

James West: I was going to say, it looks exciting.

Damian Kettlewell: [laughter] That is pulled from the ocean and is ocean waste. So you know there’s big blobs of plastic floating out there.

James West: Oh, you mean, the casing is?

Damian Kettlewell: The casing is waste plastic pulled out of the ocean.

James West: Wow, that’s impressive.

Damian Kettlewell: Yeah, no, we’ve worked hard to source this.

James West: So this is recycled product.

Damian Kettlewell: That is recycled problem, and then this, which has hit the BC shelves, and soon to be Alberta and New Brunswick and Saskatchewan, this is from recycled milk jugs, the bottom half of it here.

James West: Really?

Damian Kettlewell: So that’s quite exciting. This one, actually, is not; we have a first order is the standard, but we do have 50,000 in our facility now that are going to be packaged, so it’s pretty cool.

James West: Yeah.

Damian Kettlewell: We’re excited. We are excited.

James West: So with these – is this your entire product suite that you’ve brought, basically, the packaging?

Damian Kettlewell: I just brought some goodies. So there’s – so that’s, this pouch, too, is compostable paper. So you’ve got to take the labels off, and then the bags will be compostable. So the pre-roll tubes go inside, so inside here is a pre-roll tube.

James West: Right. You’ve been selling loose cannabis on the Ontario Cannabis Store for a while now, haven’t you?

Damian Kettlewell: Not at this point, no. So we just got our first – so we’re from Vancouver, BC, we’re a cannabis wellness brand from Vancouver, BC, and since I was last in studio, things have really evolved for the company. So you know, we’ve basically got our – we got our oil production license in November, so we’ve got three skus of oil, the droppers that are coming out – a high-CBD and a balanced 2:1 CBD/THC, and then a THC oil as well. That’ll be coming out in the summertime. But we got our oil – so we got our dried flower sales license in November, and so that enables us to sell dried flower, 3.5/7 gram containers, or pre-rolls.

So that’s our initial offering, and really the future for BlissCo is the oils. We currently have, we can put out a few hundred thousand of these a year, but with the expansion plans we have, we’ll be putting out over 10 million of these a year, 30 milligram containers of, vessels of oil. And this, as well, is glass, so it’s recyclable, the glass.

James West: Very cool.

Damian Kettlewell: So that fits in with our focus of being – we’re really focused on the full spectrum, so whole flower, whole you. As you know, there’s over 60 cannabinoids in the cannabis plant, and so we want our customers and our patients to be able to receive all the medical benefits of all of those cannabinoids. So we’re really focused on the full spectrum, so…

James West: Interesting. On that point, I can’t tell you how many times that somebody mentions the number of CBDs, and the number invariably ranges from, I think 60 is the lowest I’ve heard, up to 140.

Damian Kettlewell: Yeah, yeah. I mean, the science continues to evolve, but I just kind of be safe and say above 60.

James West: Yeah, 60 you know about!

Damian Kettlewell: Sixty, yeah. So you know, there’s a CBD-A, and you know, there’s CBD, there’s just a whole multitude of them. So yeah, we are moving down on some research fronts; we did present about a month ago at the Sick Kids Research Institute in Toronto. It was quite exciting; there was pediatric researchers from across Canada, with doctors, and they were looking to, it was basically organized by industries, by a non-profit called MICYRN, and they wanted to ensure that when there is a clinical trial on pediatric research in regards to cannabinoids, that it’s really focused, because we are wide geographic country with a limited amount of sick kids. And so really, they’re trying to focus on a clinical trial for cannabinoids that’ll work for pediatric researchers.

And as you probably heard, in Israel, there’s pediatric research that’s being done on autism. Early results show that autism, use of cannabinoids can help children with their autism, and so we’re helping with some introductions, and we’re going to participate in the future in trials like that, and other trials, as well. So yeah, I mean, BlissCo, it’s really been quite a journey, and we are now at the stage where we have revenue. So after five and a half years, we have accounts receivable, and it’s only going to grow, so it’s really exciting times.

James West: Okay, so what’s your cultivation footprint look like?

Damian Kettlewell: So we are a processor first and foremost.

James West: Okay, so you buy your inputs from others.

Damian Kettlewell: That’s right. We have two supply agreements; number one, from Supreme Cannabis Company, which is a minority shareholder in BlissCo; we’re fortunate to have them as a minority strategic investor. And then we have a supply agreement for up to 3,000 kilos of cannabis for the medical market over the next two years.

And as well, we’re fortunate to be working with Green Seal Cannabis, which is a licensed producer in Stratford, Ontario, and we basically buy from Green Seal in bulk just like we buy from Supreme in bulk, and then we package into containers, we get QA to sign off on it, and do the certificate of analysis on our side and the lab tests are done, and then we put it into pre-rolls as well, and we ship that out. And these pre-rolls have been very popular. We’re hearing very strong results in the first few days in BC of retailers buying a good amount of inventory in the first week, so really it’s quite exciting.

We do have a small grow ourselves, but 95 percent of what we sell is grown by others. So we’re, you know, similar to Valens and MediPharms, but we’re different because we have a brand. So we’re very much focused on building the BlissCo brand.

James West: Okay. So you are, first and foremost, involved in extraction as you say.

Damian Kettlewell: Yes.

James West: And that’s interesting. So you’re a third model. So ValensGro does the toll milling model, so to speak, but they also have proprietary input, but I haven’t heard of them adding that, yet. Then we’ve got MediPharm, who’s strictly a buyer of external product that they then put into a product form, and you’ve got external partners from who you get feedstock, and you create your own brand.

Damian Kettlewell: That’s right.

James West: Wow, that’s interesting. We’ve got three of the same things here, may the best man win!

Damian Kettlewell: Yeah, no, we’re happy to stay in our lane. We’re very much focused on building our cannabis wellness brand, and we’re very much focused on getting this to market, and then, of course, vape pens and the full extracts. We’re coming out with extracts, edibles, and topicals coming out later this year, but extracts is going to be a focus for ours.

James West: Okay, so in the short term, do you see that this – you know, we’ve got new rules coming out, meaning that everybody can now make extracted products like edibles, beverages, vape pens, etcetera. Do you see that you’re going to possibly face competition for feedstock because pricing is going to go up due to the shortages created by this huge new wave of demand coming from the edibles?

Damian Kettlewell: Yeah, no, it’s a great question, and there will be demand for product, but the reality is, there’s more licensed producers coming onboard all the time. We get approached by, I’d say, at least three licensed producers a month who want to sell to us, and as well, what we’re starting to now, James, is starting to buying outdoor hemp, high-CBD hemp that is grown outdoors, from industrial hemp farmers that are licensed under the Cannabis Act. We’ve processed a first run of that, and the Certificate of Analysis results from the lab have come back positive.

So as we move to the outdoor cultivation phase in regards to hemp, we’re going to see things really change on that front, and you know, you’re never going to be able to compete with the quality of indoor-grown cannabis for medical purposes, for pain, for high-THC, but on the CBD side, there will be more, a lot more bio, a lot more feed coming online, or a lot more biomass coming online.

So we’re, yeah, we’re really, really blessed and excited to have our current supply partners with Supreme and Green Seal, and we’re expanding that slowly and making sure that it’s done the right way. And you need to be careful what you bring into your facility, because you don’t want to bring in any contaminants, and we are going through the European GMP process right now. So there’s five companies in Canada that have a European GMP-certified facility; we had the Germans, two Germans, onsite in last January for four days, and they came and visited our facility, they went to our lab, and as well, we were fortunate to have Health Canada come as an observer because they wanted to learn about this GMP process, which is great. And so that is a real focus of ours as well, is to build our brand internationally. It’s just focused on Germany and Europe to start.

And so we’re, it’s quite an extensive process, the GMP certification, and we’re going to get there this year.

James West: Yeah. I’m not an expert on extraction, and I’m curious, because it seems to me that a layperson’s thinking, which is this is, if you’re going to create an extracted concentrate from a plant, then technically, theoretically, shouldn’t it not matter whether the plant is indoor or outdoor?

Damian Kettlewell: One thing that I do have to say, we spent a lot of time with our quality assurance team; we’ve got a team of four, soon to be five, and one of the concerns that we talk about with outdoor farmers is, basically, birds flying over top and excrement coming from the sky.

James West: Really?

Damian Kettlewell: So that’s honestly what QA is concerned about, and number two, they’re concerned about being too close to another farm and things blowing over, and use of pesticides. So when you’re an outdoor farmer, you know, you want to be focused – if you’re an outdoor hemp or cannabis farmer, you want to be focused on land and soil that has grown hay and canola, and so because those two stocks, or those two crops, you don’t require any pesticides. So there’s been other folks that we hear out there that have grown in, they’re growing hemp in properties where there’s maybe different crops other than that; maybe flowers, maybe whatever it might be, and there are some residual pesticides issues. So that’s a very sensitive issue to us, as we not only subscribe to the Health Canada standards of Good Production Practices, we’re taking it one level higher with Good Manufacturing Practices. So that, so really spending a lot of time getting to know your suppliers and your partners is really key for us.

James West: So there’s this whole sort of expectation by the investment community that this wave of outdoor grown hemp-derived CBD is going to undermine the viability of all of those very expensive, ultra-high-tech indoor grows. Sounds like it might be completely false.

Damian Kettlewell: I think the truth is somewhere in the middle, for sure, because number one, there will be some might say high-CBD hemp grown outside, potentially high-CBD cannabis grown over time; but if you want a really high quality cannabis that has a higher THC or that good balance, the most controlled environments would be indoor. And for instance, for the German markets, I could not see, at this early stage, that the Germans would allow us to extract and export hemp or cannabis grown outdoors. I mean, time will tell, but I don’t think I would want to go down that road with German inspectors. They feel a lot more comfortable with indoor-grown cannabis.

And so we had our friendly German inspectors and they hadn’t been to, they were inspecting pharmaceutical facilities and they came to our facility and they were like, oh, this is our first cannabis facility. So then they said, we’re used to, how do you – we need to check your service records going back three years for your HVAC equipment. And we’re like, we’ve only been in service, we’d only been licensed for 11 months when they came, not even that.

So they’re like, ‘then we need to do more incentive research on the quality of your water’. And we’re outside Vancouver, so we’ve got good quality water. And so the level of detail you go into with these European GMP certification is quite high, so we’re very cautious. Probably, it will only ever be indoor that we would be interested in extracting and exporting under the GMP model.

James West: Interesting. Well, Damian, that’s incredible. I – you’ve really actually educated me today, which doesn’t happen every day on this show, but most days it does. Let’s leave it there for now. We’ll come back to you soon. Congratulations on your product rollout and everything; I’m going to look for BlissCo, and I can’t wait to try the product.

Damian Kettlewell: Thank you very much. Nice, well, I’m here with Nafisha, our sales manager, and we’re going to submit to Ontario in the near future to get these oils in there. So we look forward to bringing you some oils one day from Ontario.

James West: Perfect. Thanks, Damian.

Damian Kettlewell: Thanks so much, James, thanks for your time.