Emblem (EMC.V) (EMMBF) is focused on the production of medical marijuana and is in the middle of a major shakeup within the organization. The licensed medical marijuana producer has overhauled the C-Suite, is laser focused on completion of it’s 30k square foot expansion and is gearing up for the adult use market roll out in 2018.

We recently sat down with the CEO of Emblem Cannabis, Nick Dean.

Thank you very much for joining us today Nick! Emblem is the middle of a major expansion. Can you please provide and update on this project as well as the impact it will have on the business?

Construction of 30,000 square foot expansion of the Woodslee Facility is expected to be complete in Q3 2018. The major component of this expansion is a GMP certified extraction facility, lab, and production facility.

The Paris Road expansion will comprise of 135,000 square feet of greenhouse space and 35,000 square feet of infrastructure. Expected completion in 2019, the Paris Road expansion is expected to provide 15,000 kg of annual production capacity.

The trend toward smokeless products is significant. What is Emblem doing to capitalize on this opportunity? What percentage of revenues does cannabis oil account for and is this trending higher?

Cannabis oil currently accounts for about 1/3 of revenues. We will be launching our cannabis-oil oral spray and oil-filled capsules in Q3 2018. Our cannabinoid-based sustained release formulations will be coming to market in 2019. In addition to the above, other formulations and unique product innovations are being pursued in both the adult-use space and medical category.

Emblem invested significant capital in its cannabis extraction technology and was an early adopter to this opportunity. What is your current capacity for oil production and how does this channel fit into Emblems value chain?

Our current production capacity for oil is 300 litres (5,000 bottles) per month and will double to 600 litres (10,000 bottles) upon completion of the Woodslee expansion. This is currently on a single shift. Our oils have been a huge success as patients and physicians continue to seek smoke-free alternatives. We expect demand for our oils to be even greater once we roll out our capsules and oral spray.

With the company’s initial focus on medicinal marijuana and its applications, can you shed some light into Emblem’s current R&D towards medicinal cannabis and how it will impact the growth of the firm moving forward?

Our R&D is focused on value added products in dose-controlled formats. As patients demand cannabis-based medications over other alternatives, doctors need to feel comfortable prescribing these products. Our formulations will give doctors comfort knowing they can guarantee the exact dosage for their patients.

When the exclusive agreement with Canntab was announced it was perceived as a huge deal for Emblem. How will the company leverage this technology in the future?

Product innovation, new formulations and dosage forms are critical pillars in Emblem’s competitive strength and growth strategy. Our licence agreement with Canntab is an important step in this direction. We believe that cannabis medications need to be in precise, dose-controlled formats supported by pharmacokinetic, dosing and clinical data to be most consistent, effective, and broadly accepted by prescribers and their patients. We have the exclusive right in Canada to Canntab’s patents and will collaborate on the preclinical formulation, clinical development, regulatory approval, and marketing of the Sustained Release Product.

Medical cannabis is a global opportunity. Is Emblem targeting any international opportunities?

We are currently targeting Germany as our first international expansion opportunity.

Can you please tell us about some of the recent additions to the management team as well as the recent changes?

We recently appointed Maria Guest as our Chief Marketing Officer. Prior to joining Emblem, she spent 20 years at Labatt building brands and developing new products within the highly regulated and competitive alcohol industry. Most recently, Ms. Guest led marketing efforts behind brands such as Corona, Stella Artois, Bud Light, Michelob Ultra, and Alexander Keith’s. Ms. Guest will lead Emblem’s adult-use strategy, including the development of unique brands for the various segments of the Canadian cannabis market.

Kim Horrill was hired as Vice President of Medical Marketing, bringing extensive health care and pharmaceutical experience to Emblem. Having spent over a decade with a major Canadian pharmaceutical company in both Commercial and Medical science divisions as well as working as a critical care nurse and specialist in pain management, Kim is the perfect person to oversee the Company’s medical outreach program.

When compared to your peers, Emblem is very undervalued. Can you tell us more about the fundamentals, balance sheet, and growth opportunities?

We currently have $80M in cash and supply agreements in place with Shoppers and Fire & Flower. Our patient count is currently 3,300 and growing month over month. We continue to showcase that we are building a business based on traditional fundamentals of revenue growth, market share, EBITDA and shareholder value. We believe the future of the cannabis market lies in value added products, where we aim to be a market leader.

How is Emblem positioned to capitalize on the recreational cannabis market in Canada?

With supply agreements in place and expansions underway, Emblem is poised to establish position in markets across Canada through a combination of premium dried flower and value added non-smokable products. We will also leverage the significant marketing and product innovation strength within our Executive Leadership Team to establish a product pipeline and brand strategy that will create significant demand for our products amongst adult-use consumers.

With your recent strategic investment in Fire & Flower can we expect to see an even bigger push by Emblem into retail?

We will continue to build strong alliances with our retail partners across Canada. Retail is at the forefront of consumer education and we want to be in lock-step with our retail partners to ensure consumers receive the best information available when selecting the products that are right for them.