The light at the end of the tunnel seems to finally be shining through for Lifestyle Delivery Systems (LDS). LDS, located in a state-of-the-art 20,000 sq ft automated facility in Adelanto, CA has represented that effective January 22rd they have received all of the necessary permits and licenses allowing them to go to into production. The monster size CannaStrips™ manufacturing machine, the state-of-the-art industrial grade packing machine, and the pharmaceutical grade, high volatility extraction and distillation equipment neatly positioned in two of the three “explosion proof” self-contained rooms, are now, according to LDS’s CEO, Brad Eckenweiler, operational. The other activities at their facility, according to Eckenweiler, belong to the dozen specialists, scientists and aids hustling throughout the pharmaceutical grade laboratory. In fact, Eckenweiler has been told on more than one occasion that LDS’s laboratory is on the same scale as those inside of multi-billion dollar pharmaceutical companies Johnson & Johnson and Pfizer.

According to Eckenweiler, a seasoned entrepreneur and financier who is known to create shareholder value,LDS simply started out wanting to make CannaStrips™, their flagship product which resembles a breath strip. However, they soon realized the majority of the biomass in California was compromised with pesticides, herbicides, and insecticides. As a result, they decided several years ago to take very bold steps to create first mover advantage; build a closed loop eco-system in which they relied on very little, if any, external influence. Another words LDS has created their own organic grade seeds through cross pollination, has its own nursery, vegetation, cultivation and extraction departments. As well as its self-contained CannaStrip™ department. In short, LDS is one of the few if only companies in California that has built a vertically integrated cannabis-centric enterprise. Others are trying; LDS accomplished it.

CannaStrips™, a sub-lingual oral strip similar to a breath strip, is not only a safer, healthier option to smoking, but also a new way to accurately meter the dosage and assure the purity of the product. Unlike edibles which have significant dosage and consistency challenges and deficiencies, Lifestyle Delivery Systems has a unique method for delivering nano-encapsulated biological molecules of therapeutic value systemically – directly across mucous membranes – in order to achieve ease of administration, compliance, dose repeatability and improved bioavailability. In addition, CannaStrips™ proprietary process allows the active cannabinoids and terpenes to enter the bloodstream quickly through the buccal membrane of the mouth and remain in the blood stream until receptors in the body are available.

First, exclusive Interview with CEO Brad Eckenweiler since the start of production in 2018. Below is abbreviated version of the interview:

Reporter: Brad, thanks for taking the time this morning. I know you’ve been going non-stop to clear the decks and get back into production. Can you give us an update on the cause of the various production delays?

BE: We had several setbacks in December which appears we’ve overcome. First, after receiving our Volatile Extraction License from the State of California we immediately learned we needed to obtain a permit from the MDAQMD, a California environmental agency. After submitting the application we received the approval in less than a week. The same day we received the approval, we were informed by the San Bernardino County Fire Department they amended their approval and requested more fire sprinklers, which we have now installed.

In short, we’re cautiously optimistic as we again go into production.

Reporter: Now that you’re in production can you tell us what the different revenue streams that we can expect?

BE: We have three existing revenue streams with more to follow. First are our oils which are used in vape cartridges. We’ve calculated oils in California in 2018 to be a $2.7 billion market. Second, our oils sold directly to the dispensary or for white label purposes. This market is explosive and our phones are constantly ringing for companies looking for organic grade oils. And third, our flagship CannaStrips™. Unlike oils and cartridges where a market already exists, we’ll need to create the market for CannaStrips, which we actually view this as a huge first advantage positive. We can’t find anything like it in the market; organic grade oils, patent pending delivery system, tied to price points that are up to eighty percent less than the only rudimentary product that resembles CannaStrips. In short, we don’t want a consumer to have to think about this decision. We want an automatic purchase at the check out counter. For approximately two dollars they can feel the effects of CannaStrips almost immediately and it lasts for up to six hours. Nothing in the cannabis sector compares.

Reporter: Do you think people understand

the size of the California cannabis marketplace?

BE: If not, it’s understandable. It’s a difficult concept to grasp. The total population in California is 39 million with annual visitors equaling 251 million. Combined, that represents about 89% of the US population of 326 million. Of course you need to be 21 years or older to participate in Adult-Use cannabis, California is bigger than the combined seven western cannabis states, and is larger than the country of Canada. We’ve positioned ourselves to have a first mover advantage because of the completion of our state-of-the-art, automated vertically integrated facility. In short, our analysis has almost $6 billion in combined medicinal and Adult-Use cannabis sales in 2018, and then we’ve anticipated a relatively conservative 25% per annum increase in statewide sales for the next four years.

Reporter: With this much potential business, is there enough biomass or do you anticipate an interruption in the supply chain?

BE: As I stated in our annual shareholder letter, a once in a lifetime event is taking place in California and it started January 1st, 2018. The event is that individuals can legally acquire cannabis for Adult-Use purposes in the state. At the center of this flexion point is a tremendous wave of demand for cannabis related products from “Adult-Use’ consumers. Simultaneously, we anticipate a significant decline in biomass that will pass the new State of California testing requirements due to contaminants. We believe that the painstaking work the LDS team has put in over the last two years lends itself to the oncoming flexion point. In short, LDS has the capacity to scale. We meet or exceed California’s new laws relating to cannabis. In 2018 we believe we’ll grow all the medicinal and Adult-Use cannabis needed to fulfill our overall goal of having a closed loop ecosystem within our vertically-integrated company.

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