MPX Bioceutical Corp (CNSX:MPX) (OTCMKTS:MPXEF) President & CEO Scott Boyes discusses the USA focused strategy of the company, but also how they are expanding to have a Canadian and International presence. MPX closed a recent acquisition of a company called Canveda, who is a Canadian Licensed Producer opening the door for the company to participate in the Canadian market. Scott argues that the product suite issued by companies should be vast and cater to the needs of consumers, especially to compete with and displace the black market. MPX Bioceutical Corp has a wide variety of products they create and Scott relates how that strategy will be a recipe for success when there is an over-supply of bio-mass (dried flower).

TRANSCRIPT:

James West: Right now, I’ve got Scott

Boyes with me here. He’s the CEO of MPX Pharma. Scott, welcome

back.

Scott Boyes: Nice to be back, James.

James West: Let’s start off with a conversation about your

recently announced acquisition of Canveda. What is the

significance of that for the company and for your investors?

: James, we’ve been trying to break into theCanadian market for a long time. We had an application for ourOwen Sound location that goes back about three years, now.

James West: Wow.

Scott Boyes: And we had a couple opportunities to participate

in the export/import market that we had to pass by because we

didn’t have that little pink piece of paper, the Canadian LP

license.

James West: Okay.

Scott Boyes: So this opportunity came along; it’s a small

facility, but it gets us licensed. We hope it’ll help us get our

secondary license in Owen Sound and get that wrapped up. We were

one of the sponsors of the Cannabis Global conference in Europe

last month; this is becoming a global market, and while the US

is still our focus and there’s still a big land grab going on

down there, not to be able to participate in the import/export

market, we think, would have restricted our growth in the

future.

James West: Sure, okay. So does that – are we to interpret

from that, that you want to focus more on Canadian and external

to Europe, more so than the US?

Scott Boyes: No. the US is still our focus.

James West: Oh, okay.

Scott Boyes: It’s still a huge market. But we have the

arrangement with Panexia, where we’re producing medical-grade,

GMP-grade products. We had opportunities to invest in several

Israeli firms that were doing research, but Panexia has already

got the products ready for the market. So we’ve already got the

building permits to build out a 5,000 square foot lab in Owen

Sound, that would be producing the Panexia products that we’ll

sell in Canada and the US under the Salas Pharmaceutical label.

We have a lab that we’re building out in Arizona as well.

So we’ll participate in the medical market. We’ve also got the

MPX brand that we’re just exploding within the US, and we want

to be able to bring that brand into the Canadian market as soon

as the government here starts to broaden its scope of products

that are allowed to go into the market.

James West: Yeah, okay. So you probably be relatively

qualified individual to comment on the product mix going out

into the first blush of the recreational rules. Right now

there’s talk about allowing some edibles a little further down

the line, but more or less, we’re restricted to vapes and that’s

it. So, you know, vapes and dried flower, rather. So how do you

see that evolving over time?

Scott Boyes: Well you know, if the government really wants to

kill the black market, it’s going to have to give the consumer,

either medical or recreational, forms that they want to buy, or

else the black market will continue to exist. And if you look at

our mix in the US now, we’re less than 40 percent dried flower,

and it’s changed quickly. We do shatter, sauce, wax, live resin,

vape of course…we have machineries down there that’ll produce

vape cartridges, 2,000 an hour. So it’s a mass part of the

market.

James West: Okay, now, some of these products are above 90

percent THC.

Scott Boyes: that’s correct.

James West: And having experimented with some of the more

intensive products like that, I question whether or not, once

the market and the sophistication of knowledge as to the effect

of these higher-potency products in the space is, I’m curious as

to, you know, how could those be allowed to succeed? I mean, you

do one dab of a 90 percent shatter and you’re gone. I mean,

you’re gone.

Scott Boyes: Yeah. It’s worse than the effect of four

martinis.

James West: Exactly. And so there’s also a huge absence as to

exactly what the effect of that is on the human organism, and

especially with repeated use over time.

Scott Boyes: But I’m not sure within Canada that we have to go

to the extreme that the Americans have gone in the marketplace,

but I think you need to have a wider variety of product

available if you really want the consumer to buy a product in a

regulated market.

James West: Sure. Well, you made a good point before we

started this segment, that if Canada is serious about, you know,

stomping out the black market, that they’re going to have to

offer all these products, because otherwise people will just

keep the black market alive because that’s the only place to get

these products.

Scott Boyes: And, you know, even in the medical market, with

the Panexia joint venture, they’ve got 40 skus of products, and

the delivery methods are multiple; the types of – everything

from vaginal suppositories to sublingual tablets. And these are

all part of the market, and the government is going to have to

allow them to be in the market if they really want to –

James West: Yeah. What do you, what do you make of some of

the 40 amendments that are still currently under debate by the

Senate?

Scott Boyes: Some of them, I’m glad were killed.

James West: Right.

Scott Boyes: Specifically the one about identifying

shareholders. I mean, we have about, last count, on our Nobo

list, about, well, on the Nobo list, about 15,000. And of

course, as a bpublic company, they change every day.

James West: Right.

Scott Boyes: So it would be virtually impossible to be able to

comply with that.

James West: Yeah. And I would think that contradicts privacy

rules.

Scott Boyes: Of course, that as well.

James West: Do you think that the labeling rules, I mean not

allowed to, you know, identify brand swag, so to speak – I mean,

that, to me, struck me as completely sort of out of left field

and kind of wingy, because I mean, if you look at the alcohol

business, which is the nearest analog to this thing, we got beer

trucks rolling down the street with the logo; anything you can

put a logo on has a picture of a beer company’s stuff on it. So

do you see that one flying through?

Scott Boyes: Well I know in Arizona it’s a big part of our

sales. And it’s also, when we can’t advertise using print media,

we can’t advertise using electronic media other than the

internet, it’s one of the few ways we have of getting our brand

identification out there. So…

James West: Sure.

Scott Boyes: Yeah. I think it’ll all evolve. I mean, sooner or

later it’s going to get to the point where it’s recognized as a

viable industry, and it’s going to be subject to the same

standards as the other ones. Even the packaging restrictions

here, I think, are a little bit restrictive. Even if you want to

give contents, if you get into the medicines, you’ve got to have

contents of the non-active ingredients as well. So, the

packaging is going to have to change.

James West: Yeah. No doubt. So then, in terms of the

inability, or the province’s right to the deny the ability, to

grow homegrown cannabis, which was one of the core planks in the

platform to eliminate the black market, do you think there’s

going to be some compromise on that point?

Scott Boyes: Well you know, I think there’s two sides to the

story. The homegrown market could be abused, with multiple

plants being gown and then being sold into the black market, and

I think that was the fear that the Senate had. But I think by

the same token, I mean, we can make our own beer and wine. So I

think there’s two sides to the coin.

James West: Exactly.

Scott Boyes: I’m not strongly opinionated one way or the

other.

James West: Right. We saw a big raise done by Canopy Grow of

$500 million. I mean, really, that’s putting the whole cannabis

industry on the map globally in the most conservative investment

circles now. Do you think that that’s going to open up the

Canadian market even more? Or, do you think that it’s the sign,

as a lot of people are suggesting, that the market has now sort

of peaked out, and it’s top-heavy, and so we’re going to see

some unwinding? We’re starting to see a lot of short positions

build up in some of the bigger names.

Scott Boyes: Well you know, I’m convinced, and our strategy is

built on the fact, that there is going to be an oversupply of

biomass, of dried flower. So where we were originally planning

up to 400,000 square feet in Owen Sound, now our grow there will

be minimal. The grow in the Canveda operation is small, and

we’re going to focus on secondary products: distillates and the

by-products of distillates, and on the medical market.

We haven’t raised much money in Canada. So what happens in the

Canadian investor market isn’t that critical to us; we’ve raised

most of our money in the United Kingdom.

James West: Is that right? In the United Kingdom?

Scott Boyes: In the United Kingdom. In fact, of the 100

million we’ve raised, about 75 million of it was raised through

London, with European and international investors.

James West: Interesting. Ha. So is the rules in London, are

they changing?

Scott Boyes: In terms of…

James West: Well, are they moving towards a recreational

regime?

Scott Boyes: Well, when I was there three weeks ago, there was

a lot of talk about pushing medical into the market. And

typically markets go through two stages, right? We start with

the medical market, and this has happened in the US as well as

in Canada, and then the recreational movement hits on later. But

there is a very active lobby going on in Parliament in the UK to

get it legalized for medical use.

James West: Okay. So the whole world is basically moving

towards, everybody is going to be high.

Scott Boyes: You know, when I was at the conference, there was

people there from Italy, from Spain, from Portugal, from Poland,

from several countries in South America, several African

countries…it is a global industry now, and moving just as fast

globally as it is in North America.

James West: Right. So I’ve seen a bunch of companies making

moves into Africa on the pretext that Africa is the cheapest

place in the world to grow cannabis. I would think it would also

be one of the toughest places in the world to organize a, you

know, a sophisticated agricultural crop that is targeting, you

know, high THC values. I mean, I could see growing, you know,

CBD, hemp, there, but are they really going to be able to export

a high-grade – ?

Scott Boyes: You know, we’ve met people from Desoto. We had

some conversations from groups from Zimbabwe. There’s pretty

large agricultural facilities in most of these countries, and

they’re going to be able to grow flower. A lot of them are

talking about producing concentrate, low-grade oil, for export;

we’ll see if that develops. But we’re also getting competition

out of Peru, Brazil, Colombia…so.

James West: Right, right. All right, Scott, that’s a great

update. Let’s leave it there. We’ll come back to you again in a

quarter’s time and see how you’re doing. Thank you once again

for joining us.

Scott Boyes: Great to see you.

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