All posts by Jamie Ashcroft

Liberty Health Sciences making high-quality medical cannabis available one state at a time

Around a third of all Florida residents, or some 6 million people, could qualify to use medical cannabis, so there’s good reason for the Sunshine State to be the initial focus for Liberty Health Sciences (CSE:LHS).

“Florida is one of the most populated states in the U.S., but it also offers quite a diverse amount of chronic medical conditions that doctors can prescribe cannabis for,” says George Scorsis, Liberty’s chief executive officer.

At present, the state has just over 36,000 patients registered for medical cannabis, after a 300% rise in registrations in the past quarter.  Liberty is one of only 13 companies licenced to cultivate, process and dispense it by the state government.

Research suggests Florida could be a US$1.6bln medical cannabis market by the end of the decade.  In other words, it has the potential to eclipse Colorado, a pioneering state in legalizing cannabis, as the latter is forecast to be worth US$1.5bln by then.

As we reach the fourth quarter of 2017, 29 states and the District of Columbia have legalized the use of cannabis in some form.  Last year provided something of a tipping point, with five additional states, including Florida, approving medical cannabis use, while states such as California and Nevada also approved the drug for recreational consumption.

At a federal level the market is a greyer shade of green – the state by state legalization does not equate to national legalization, and businesses thus cannot operate across state lines. In other words, each state has its own regulations and within each state businesses must establish internal production and distribution channels.

As a result, Liberty’s strategy is to enter specific state markets and embed their entire verticals within those states. Scorsis highlights the importance of Liberty’s approach to growing its business, where Florida is the initial focus, and new ventures in other states are in the pipeline.  Discipline is a particularly important tenet of the strategy.

“First and foremost, we will only enter into medical markets. There are now a tremendous number of markets that allow medical cannabis, such as Florida, Ohio, Pennsylvania, Maryland and Connecticut, with more on the horizon,” says Scorsis.

“We plan to enter into all of those markets if they follow through with the second criteria in our business strategy, which is the number of chronic conditions that the states permit for medical cannabis treatment.”

Scorsis points out that in Florida, for example, more than 30% of the population could qualify to become a medical cannabis patient.  Meanwhile, in Ohio that figure is around 24%.

Moreover, there are some 3mln potentially qualifying patients in Pennsylvania, equating to 24% of the state’s population, while in Maryland the figure is 1.8mln patients or 30% of the population.   Connecticut is estimated at 20%, or 736,000 people.

Conversely, Scorsis notes that in New York State the medical cannabis program is too “narrow” to meet the company’s investment criteria.

Liberty is targeting states with both large populations and large numbers of qualifying patients not only with revenue in mind, but also cost – producing at a certain scale is a necessity to meet the business objectives in a given market.

“We need to ensure that we can provide what truly differentiates us from all our competition,” Scorsis explains.  “We are experienced commercial greenhouse growers and can produce the lowest cost, highest quality cannabis in the marketplace.  That means we can supply it to the patient at a more accessible price than anybody else in the industry.  We don’t enter into markets that have canopy restrictions because we would like to grow at scales in excess of 100,000 sq. ft.”

With such major ambitions it is nice not to be going it alone, and in this respect, Liberty benefits from the support of successful licensed Canadian cannabis producer Aphria.  That C$1.3bln company owns 36% of Liberty and provides both licenced products and operational expertise.

Notably, since adopting Aphria’s licensed production techniques, Liberty has increased output by about 15%.

Liberty’s current footprint in Florida comprises a 14,000 sq. ft. growing operation on a 36-acre property in Alachua County.  Production capacity is approximately 700kg of cannabis per year.

By March 2018, Liberty aims to be growing 3,000kg per year as it ramps up to 56,000 sq. ft. of growing space.  Over the following years, Liberty expects to be at 13,000kg and an intended 187,000 sq. ft. of room for growing.

Retail outlets are also part of the plan, and before the end of 2017 the company anticipates having dispensaries open in Fort Lauderdale, Miami and Tampa.  Locations are planned for Orlando, Tallahassee and Pensacola by June.

With anticipated annual production of 13,000kg and an increased retail footprint, Liberty would be supplying the equivalent of 20,000 patients.

The opening of mass market consumer states like California (where the new legal framework officially comes into effect in January) will hold strong appeal for cannabis companies and their investors.

But Scorsis definitively sees Liberty as a medical cannabis company, with specific competitive advantages.

“Medical cannabis is who we are.  It’s the ethos of our organization,” Scorsis emphasizes.

“We truly believe that cannabis is a product that should be used for medical purposes.  Our intellectual property, our knowhow and the equipment that we have invested in are really designed to produce products for medical purposes.”

“For instance, not only do we produce the highest quality cannabis at the lowest cost, we inspect our products over 500 times before they are released to any patient.  Why?  Because it is medicine.”

This story was originally published at on December 20, 2017 and featured in The CSE Quarterly.

Learn more about Liberty Health Sciences Inc. at and on the CSE website at

Beleave – advancing smoothly through medical marijuana approvals with eye on big sales, margins

This story was originally published at on May 17, 2016 and featured in The CSE Quarterly.

Marijuana sales reached nearly US$1 billion in 2015 for the state of Colorado, where the drug was cleared for recreational sale just over two years ago

As the social narrative and legal argument surrounding marijuana continues to evolve, an intriguing dilemma is posed for a typically conservative mainstream investment community.

Investors looking at Beleave Inc. (CSE:BE) will likely have polarised opinions depending upon their age, politics and life experience.  Indeed, the issue of marijuana’s decriminalisation and commercialisation is very much loaded.

But, whatever an individual’s standpoint on the moral or ethical merits of this emerging industry, one thing is quite clear; a pragmatic look at the business case reveals a compelling argument for the growing sector.

Marijuana sales reached nearly US$1 billion in 2015 for the state of Colorado, where the drug was cleared for recreational sale just over two years ago.  According to the state’s authorities some US $135 million was collected in taxes and fees related to the pot business that year.

Colorado is one of four US states to legalise marijuana for recreational use (the others are Alaska, Oregon and Washington).  Twelve others, including big markets such as California and Nevada, now allow consumption for medical purposes.

In Canada, the medical marijuana business has legalised progressively over the past 15 years.

But, the major turning point came in 2014 with the introduction of the Marijuana for Medical Purposes Regulations (or MMPR) by the government’s Health Canada arm.

Newly-elected liberal Prime Minister Justin Trudeau in November announced that marijuana would be legalised for recreational use in Canada during 2017.

It represents a major opportunity, particularly for Beleave.

Although there’s a lot going on around the edges for Beleave – with the company working on various research and development projects – at the moment the story is quite a simple one.

Beleave is the next man up for regulatory approval

Around 30 companies have been given the regulatory green light for medical marijuana.

And as Beleave chief executive Roger Ferreira explains it, his company is currently in the advanced stages of the regulatory licensing process with Health Canada.  Being in the final stages of the approval process, the regulatory decision is expected soon.

With the help of chief operating officer Bill Panagiotakopolous, and his construction industry ties, the company has now built at low capital costs a 14,500 square foot production facility designed to meet Health Canada’s requirements.

The facility, in Hamilton, will be capable of producing some 550,000 grams of marijuana each year and, crucially, it is designed to be scalable so that the production line can grow in lock step with the commercial side of the business.

That scalability will be key. Ferreira says initial market research to date indicates Beleave could sell out its entire capacity within a year from the start of production.

Prescribed patients on average consume between one and three grams of marijuana per day, he explains.  As such just 270 to 800 registered patients would be needed to max out the group’s supply in year-one, giving the company revenue of $4.2 million with margins of 72%.  As demand for the product increases the company has already laid the groundwork for expansion of up to 270,000 square feet with margins increasing to 83% and revenue growing past $100 million.

At the same time the demand for licensed marijuana in Canada is forecast to soar.

The number of registered patients has grown at a rate of 20,000 patients per year since the regulatory framework was brought in during 2014, and the introduction of a recreational use market is expected to see customer numbers swell further.

So what’s next in the medical marijuana licensing process?

To be green lit in Canada, a grower has to complete a three step permitting process.

First, the company needs Health Canada to approve the drug for cultivation (i.e. growing). This is what Beleave is currently waiting for.

Once licensed for cultivation the company will then be able to legally obtain already sourced seeds and ‘clones’ for planting and begin the process of growing cannabis plants.

Health Canada assesses and reviews the operation throughout as part of the new regulation process.

A separate license is then required for harvesting.  Without a harvesting license the plants cannot be cut, dried or processed in any way.  After that, a third license is required to allow the company to commercialise the product.

From an investor’s point of view this represents a critical focus for the next year.  Ideally, Beleave will want a seamless transition through each of the three stages – as bottlenecks through permitting could see harvests missed and the loss of potential sales.

The grow op

Previously, Canadian patients were legally allowed to grow marijuana for their own medical purposes.

New regulations, introduced in 2014, aimed to create larger scale third-party suppliers to deliver a safer and more medically appropriate product.

“They wanted to establish an infrastructure whereby there was a commercial base, with a lot of quality assurance oversight to ensure that the product is safe for use,” Ferreira told Proactive Investors.

“With what patients were growing themselves, in their basements, it was unclear what the quality was in terms of potency, contaminations and consistency.”  Furthermore, there are other inherent public safety concerns associated with such a system, including diversion of plant material to illicit markets, as well as the potential for gang-related violence.”

He added: “Our facility is pharmaceutical-grade in terms of quality assurance procedures and manufacturing practices. We’re taking extremely heavy security precautions, and putting in place extremely stringent reporting requirements in terms of inventory and surveillance.”

“All of that is being done to ensure a clean, safe and high quality product.”

“It is a state of the art facility that encompasses all of these things.”

Research & development is a key focus for Beleave

Ferreira, a Phd who has authored peer-reviewed papers on neuroimmune pharmacology, highlights that research and development and academia are a key focus for Beleave.

By concentrating on science he expects the business to produce a clinically efficacious drug, as well as creating consistently potent and safe marijuana products.

Central to its R&D effort is a collaboration partnership with researchers at Ryerson University, Ontario, and parts of this work is grant-funded.

“We are working on extraction and drug standardization of cannabinoids and other pharmaceutically relevant compounds in the plant material, with the aim of developing exciting and innovative IP surrounding cannabis-based pharmaceutical therapies” said Ferreira

“Standardisation of cannabis based medicines will allow them to be considered more than just a crude plant or extract, and more as a regulated substance that’s highly characterised and has a composition that’s suited to pharmaceutical use.”

He pointed out that while cannabis is being used to treat the symptoms of multiple-sclerosis, and as ad-hoc pain relief in cancer care, it still is not an approved drug.

It remains a narcotic where the evidence of its effects is mainly anecdotal.

“There’s emerging clinical evidence of its usefulness for certain illnesses,” said Ferreira.

“But, you cannot advertise it right as a specific treatment yet. It hasn’t really been proven out, there isn’t a lot of evidence data. And there are reasons for that.

“When you look at availability in the market, there are so many different strains with all these different names and varying qualitative aspects to them – to do with aroma, flavour, strength and effects.

“These things attract a consumer’s eye, but what the clinical community is more concerned with is to do with potency and therapeutic benefits.

“So we have been looking at how we can establish a production facility that, with good working practice, can ensure reliability, repeatability and a uniform product.

“And that is what is going to make cannabis a more standardised medicine, and help move perceptions away from the idea of it being a crude plant material.”

Learn more about Beleave at and on the CSE website at