The following is a transcription of the above video, and The Market Online has edited it for clarity.
Edible cannabis producer, Indiva Ltd. (TSXV:NDVA), recently announced a LIFE private placement, open to all retail investors, and intends to raise a minimum of $1.094 million at 10 cents per unit.
Indiva has an incredible 23 per cent market share in the Canadian cannabis edibles market. To discuss the company’s plans and the opportunity for investors, we spoke with Indiva CEO Niel Marotta.
TMO: Niel, how has Indiva been able to capture such a large share of the edibles market?
Marotta: I think it speaks primarily to the broad appeal of our cannabis products. We make delicious products.
We really started initially four years ago with licensed brands like Bhang and Wana, and also Pearls. And we still make all three of those brands 100 contract manufacturing, and we make and sell Pearls and Bhang, and we take that to market.
But since then we’ve moved on to innovating our own products: Brands like Doppio Sandwich Cookies, 1432 Chocolate and most recently No Future gummies and vapes.
So the skillset that we have in terms of making delicious products with broad appeal and also being the low-cost producer allows us to be very competitive on price while still maintaining very high margins.
TMO: Where do you see the opportunity for growth for the company?
Marotta: I think the growth will come from our pipeline of new products. All the edible cannabis brands that we have in market we’re able to add line extensions, new flavours and cannabinoid ratios and we also have a robust pipeline of new products that we should bring to market throughout the rest of 2024.
TMO: Canada has been criticized for its restrictions on edibles. Can you explain the key issue and what a resolution would do for the edible cannabis market more broadly?
Marotta: Great question. The edible cannabis market and the THC limits are capped at 10 milligrams per package in Canada.
This is quite different than what we see in mature markets like in the United States (Colorado, Nevada, California, etc.) where typically the limits are a 100 milligrams per package while limiting the dose at 10 milligrams.
So for instance, you might have a package of gummies where there’s 10 gummies in the package, each with no more than 10 milligrams but you’re allowed to put 10 gummies in that package. We’re capped at 10 milligrams total per package.
Interestingly, the cannabis is the least expensive part of the products that we make, and so what this has done is made the products artificially expensive in Canada and has really stunted the edible category as a percentage of the total market.
When you look at U.S. states like Colorado for instance, edible cannabis is close to 15 per cent of that market, whereas in Canada, we’re limited to only about 5 or 6 per cent.
If the edible limits were increased, we think we’d see an improvement in public safety. This would drive fewer people to the illicit market for those higher doses and competitive prices. Also, the price point would be much more competitive.
As a result, we think the edible category would grow dramatically – double and maybe even triple as a percentage of the total market. That would drive huge growth in our business.
So we think there’s a very compelling argument to be made for increasing those limits, both commercially and from a public safety point of view, which is very important.
And we expect to hear for the end of this month from the expert panel’s review of the Cannabis Act. Specifically, we want to know what their opinion will be on increasing those limits. We’re very hopeful that they’ll listen to the advocacy that I’ve done and that other folks in the industry have done to increase those THC limits per package.
TMO: Why should investors participate in your private placement and where should they go for more information?
Marotta: They can email [email protected] or they can go to our website indiva.com under the investor section to look for the offering memorandum.
This is a LIFE equity placement, so it’s free trading. Additionally, it is open to all investors in all jurisdictions, with the exception of the United States. The reason to take a look at it is for all the growth we have in front of us. Also, for all the optionality we get potentially from regulatory change.
We intend to grow our edible cannabis business quite a bit in 2024 and beyond, even without regulatory change. And I think this is very a good time with our stock closer to a low than a high for folks to take a look at Indiva.
Investors can also visit Indiva’s Deal Room for more information.
You can find Indiva Ltd.. on the TSX.V under the symbol NDVA or head to its website at indiva.com for more information.
Join the discussion: Find out what everybody’s saying about this stock on the Indiva Ltd. Bullboard investor discussion forum, and check out the rest of Stockhouse’s stock forums and message boards.
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