Brad Rogers, President & COO of CannTrust Holdings Inc. (CNSX: TRST), an ACMPR Licensed Medical Marijuana Producer, talks about their ability to acquire 1000+ new patients per week in their latest run. They have also announced their expansion plans which will increase their footprint in Ontario significantly.

TRANSCRIPT:

James West: Hey Brad, thanks for joining us today.

Brad Rogers: Thank you for having me.

James West: Brad, you’ve had a stellar quarter; you’ve closed a $20 million financing. Let’s start with the quarter: give us an overview.

Brad Rogers: We can’t keep up. I mean, we just keep outpacing the industry. We’re getting about 1,000 clients per week coming through our door, which, when you look at the traditional ACMPR stats, 12,000 to 15,000 new clients are coming in to the system every month; last month, we took in 4,000. So we’re outperforming industry by a quantum, and so we’re very, very pleased about that, and I think it has a lot to do with the results of the quarter.

James West: Sure. So you’ve been building out another greenhouse, you’ve got your operation in Vaughan is expanding. What exactly is the production footprint of what’s going on right now?

Brad Rogers: Our production footprint has grown significantly. We got our license in our Niagara facility for 250,000 square feet that we just initially moved into. We have 200,000 more coming online, and we have 30 more acres of licensed production facility that is being planned for that site.

James West: Wow. So you’re looking at 40,000 kilograms at this point?

Brad Rogers: 40,000 kilograms, and that’s a conservative estimate. So what we’ve done is, we’ve taken our Vaughan production and cut that back by 60 percent. So that’s a very, very conservative number, and we think we can outperform that as we always do. We under-promise and over-deliver.

James West: Sure. What is your total production per square foot in terms of grams of dried product?

Brad Rogers: Well, out of our facility, we are doing somewhere in and around 350 grams per square foot, which is, when you look at those industry stats, I think that’s pretty much maxed out.

James West: That is the highest I have yet heard.

Brad Rogers: Absolutely. We don’t have master growers; we have PhDs and we have true horticulturalists growing our crop. So that gets us to scale, and that gets our consistency, and that’s been a key value proposition of CannTrust for a very long time now. What we’ve done is, we’ve standardized every single product that comes out of our facility. So we have label claim on all of our dried products and all of our oil products, which is key to actually getting into doctors’ heads in that they can dose, titrate and gauge efficacy on the very same potency, every single time.

James West: Wow. And that’s quite an accomplishment. The whole industry has been trying to achieve that.

Brad Rogers: Yes they have.

James West: So your all-in cash cost per gram is down to $1.21 from $1.49 over the same period last year. How did you achieve that lower cost? What did you do?

Brad Rogers: It’s all about yield. So, it’s all about productivity. So we are at the pinnacle of automation; we look for new technology every single day. Our people are top-notch. We have PhDs and horticulturalists growing; we have doctors and nurses advising on the client side, and we’ve got technology as well. So when you look at what’s going on with the technology of cannabis production, we are – we have grown, no pun intended, we’ve grown significantly in that respect. So very excited about what’s coming on in terms of technology – at scale, as well.

James West: You’re at 35,000 patients now in total?

Brad Rogers: 36,000 now. So we’re growing by the week.

James West: Ask you by the day, it goes up.

Brad Rogers: Exactly, that’s right.

James West: I would say, categorize, that CannTrust is not looking to be the biggest; you seem to be focused on being the best in certain categories. Is that a fair categorization?

Brad Rogers: Correct. Yeah. So what we want to do is foundationalize our product line. So in doing that, we’ve standardized. Which means, again, the same label claim on all of our products. And that stratifies both medical and rec, so when we look at our medical, that was very important for us, to be able to put a standardized product out that doctors can dose and titrate. But beyond that, when you go into any, let’s say, LCBO, you don’t guess what the alcohol content of anything on the shelf is.

James West: Right.

Brad Rogers: And so what we’ve done is very similar to that; what we’ve done is standardized, and so you know what you’re getting every single time, and your reaction to that is going to be the same, every single time.

James West: Okay. So is CannTrust focusing on medical even post-recreational legislation, or do you have a recreational strategy as well?

Brad Rogers: We think our products can stratify both. Never before in the history of the world has a product ever stratified medical and rec, so that’s very exciting for us. And we think our foundation of standardization will get us there.

We do have an exclusive partnership with a big, big company, pharma company, called Apotex.

James West: Right.

Brad Rogers: Apotex is the seventh-biggest generic manufacturer in the world, and they’re in 115 countries around the world. And so we’re right now developing products with them on the medical side. So on the pharmaceutical side, we’re developing enteric-coated capsules, we’re doing nasal sprays, we’re doing a lot of extended value line products that we can distribute internationally, not just nationally.

James West: Sure. Your affiliation, support from Bloom Burton, which is Canada’s premier life sciences investment bank – you’re the only company they’ve invested in, and is that relationship with Apotex a result of that very focused sort of approach to the life sciences side of things?

Brad Rogers: Sure. Look, these guys are very hyper-focused on what they do, and we fit their model, and I think they’re very much aligned with how we think about the market, and they’re very supportive of what they see in us. And again, what they’ve done is been able to communicate to the medical market that we are focused on that market and we are able to actually execute within that space.

James West: You bet. All right, Brad. Great quarter, thanks for the update. We’ll catch up with you in another quarter. Thanks for coming in today.

Brad Rogers: Thanks for having me.