The following is a transcription of the above video, and The Market Online has edited it for clarity.
Nextleaf Solutions (CSE:OILS), is a debt-free cannabis processor known for its multi patented, scalable extraction technology. The company offers a diverse portfolio of over 80 different products across four categories, including vapes and their bestselling soft gels under its house brand Glacial Gold. Joining me is CEO, president and director Emma Andrews.
TMO: We can’t really go any further without looking at your background and wondering what is happening behind you.
Andrews: Not your typical boardroom. This is our distillation technology and equipment. This is the second part of our multi patented process, which produces cannabis distillate, one of the ingredients that we’re the specialists at, in Canada.
TMO: What part of the process is that when you’re doing all of the extraction work?
Andrews: This is the distillation component. So prior to this, cannabis biomass goes through a primary extraction skid that produces more of a crude oil. It goes into some different products if you’re looking for a broader or full spectrum, whereas the distillation skid actually produces the highest purity extract up to 99% pure cannabinoids and it’s a beautiful amber colored ingredient and that’s what’s ideal for vapes, soft gels and tinctures.
TMO: It’s been six years since cannabis became legalized in Canada. What are some of the shifts you’ve seen in your business through these early years?
Andrews: Well, this is how we began as an ingredient processor. So this was the value proposition since day one, doing toll processing for licensed producers and very quickly, as soon as Cannabis 2.0 was legalized, which is the extract class of products, that’s when we mobilized and acquired Glacial Gold, which is a brand from the prohibition era and we’ve been in market for five years now with over 80 different products that we’ve run through in the market. A lot of turnover with different provincial variations, different provincial boards have different preferences for their markets. So we produce vapes, soft gels, tinctures, infused pre-rolls and with some of our commercial partners, we’ve even launched a few craft flower SKUs.
TMO: How do you ensure that Nextleaf is well positioned to scale up and meet the demand?
Andrews: The beauty of our whole technology and value proposition here is true scalability. That was exactly why we designed and protected it through over 75 different global patents because of the technology and the value proposition around scalability. So we’ve been actively replicating this value proposition across all areas of our business. So enterprise resource planning software, quality assurance management software and looking to make sure that our in-market tactics as well, our sales and marketing efforts, are all scalable as well. We’re on a very steep growth curve right now, and we need to optimize our systems to future-proof the business.
TMO: For an investor looking to rebuild their confidence in the cannabis sector and reconsider it as part of their portfolio, what would you say?
Andrews: I would say this is a fledgling industry still. So only six years in, it’s happened in a blink of an eye but there’s been a lot of consolidation in these early years. So the early investors that were looking more at speculative businesses can now feel a lot more confident in a more stable industry and there’s more operators that have weathered the storms, the ebbs and flows, post pandemic and regulatory changes. So they can have a lot more confidence in being able to look at the balance sheets, financial statements, the results in market, purchase the products and have a personal experience themselves. It’s a much different landscape for investment than it was six years ago.
TMO: Internationally, we’re looking at jurisdictions starting to legalize cannabis for recreational or medical purposes. How can Canadian companies like Nextleaf position themselves for that global opportunity?
Andrews: True quality, I think Canada deserves to have a reputation on the global stage for quality cannabis. So focusing on your process, focusing on your quality and doing what you do best. So for us, that will most likely be exporting high purity ingredients processed here, semi-finished bulk goods and then maybe eventually even bringing our brand glacial gold overseas as well.
TMO: Now investors may start to weigh what’s a bigger opportunity, medical cannabis or adult use cannabis.
Andrews: I would actually encourage investors to think about the wellness opportunity. The wellness consumer could be shopping either in medical or in adult rec and what we’ve found is if you’re health conscious and you’re looking for alternative forms of consumption, it’s actually more convenient and more approachable to purchase your cannabis at an adult use or recreational retailer versus going through the medical channels. So depending on your need state, depending on your symptomatology, depending on your healthcare providers, they may recommend different avenues but if it’s a wellness focused consumer, they’ll likely be shopping in the adult rec channel. So I would highly encourage keeping your eyes on that category and that’s where we see the greatest growth for our brand.
TMO: What are some of the things that you are seeing on the popularity side when people are looking to buy these products?
Andrews: A lot of shifts in product innovation regarding the hardware for vapes as an example, moving into all-in-one devices, so essentially the battery and the vape cartridge all-in-one, so it’s ready to consume. I think that convenience factor is huge for consumers. We have a lot of tourists that are interested in trying cannabis, whether they’re trying it in different provinces or whether they’ve come from a different nation, it’s really nice for them to just have an easy grab-and-go buy. Same for early consumers, or new consumers that are a little more cautious, they just want something convenient. We see a lot of innovation in vape hardware devices, and then product formats too that are much more approachable, super normalized, like soft gels. I don’t think people think of cannabis in the format of a soft gel. They’re used to seeing it in flower as more of an agricultural product but let’s start to look at it as consumer packaged good, a wellness product, natural health products, those trends.
TMO: It just seems that a company like Nextleaf on the cannabis side has a variety, such an offering. Where is the advantage of that in the sense that you’re constantly able to innovate and create products for consumers?
Andrews: We humbly believe one of our best attributes is speed to market and that’s because we do all our small batch manufacturing in house for MVP products. We really focus on the product quality versus doing too much in regards to packaging, as an example, something that’s not as essential to the purchase or the consumption experience within cannabis, maybe in another CPG verticals but just focusing on what’s the most meaningful for us.
TMO: On the wellness side, what are some of the things that you’re seeing interest for? Maybe anxiety or those sorts of things, what are the things that are most pressing?
Andrews: Anxiety is probably the number one alongside sleep and pain, the lowest sought out reasons for consuming cannabis for wellness purposes. So if that’s somebody’s need state, it’s very likely that they’re going to be looking for something that is more health conscious and alternative method of consumption. So definitely that’s where the extract-based product categories really lean into.
TMO: What is the vision for Nextleaf in the coming years?
Andrews: We are setting the global standard for processing cannabis at scale. So in the future, I would love to see our technology licensed in international jurisdictions but I would certainly love to see our ingredients in brands overseas and then maybe ultimately buying Glacial Gold abroad. Maybe next time I travel to Australia I’ll be accessing Glacial Gold through the medical channels there.
You can find Nextleaf Solutions on the CSE under the symbol OILS or head to its website at Nextleafsolutions.com or at Stockhouse.com.
Company shares were last trading at $0.08
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