All posts by Peter Murray

Irving Resources unearths exceptional gold, silver exploration opportunities in Japan

When one thinks of Japan, sushi, Shinkansen bullet trains and onsen hot spring resorts come to mind more readily for 99.9% of the population than precious metals exploration. But those famous hot springs are plentiful because of geothermal activity, and this special geological phenomenon in Japan has given rise to some rich gold mines in years past.

The most impressive example in modern times is the Hishikari mine located on the southern island of Kyushu. Operated by Sumitomo Metal Mining Co. Ltd. (Tokyo Stock Exchange:5713), Hishikari is very high-grade in nature, averaging some 40 grams per ton of gold in its ore.

Quinton Hennigh and Akiko Levinson knew about the potential for exploration in Japan as they were building up ounces at the Springpole deposit in Ontario while running Gold Canyon Resources. Springpole developed into a resource of over 5 million ounces of gold before the company was acquired by First Mining Finance in 2015.

As part of the deal, Gold Canyon spun out a new company with Levinson at the helm. She and Hennigh had for years agreed that if they ever started a new company, it would focus on Japan. The new vehicle was their chance and Irving Resources (CSE:IRV) had its direction laid out from the get go.

As 2017 kicks off, Irving has a project portfolio with all the hallmarks investors like to see – multiple projects with high-grade gold and silver showings, sound infrastructure, and a friendly jurisdiction to work in. Combine these attributes with good share structure and a healthy treasury and the Irving story has become an investor favourite, its stock price rising over 600% in the past 12 months to around $0.90.

In November 2016, Irving raised just short of $6 million, with famed precious metals investor Eric Sprott personally providing the lead order. That leaves the company with over $7 million in the treasury, or to put it another way, all the financial runway it needs for well over a year to begin showing the world how rewarding precious metals exploration in Japan can be.

“We are one of very few exploration companies operating in Japan,” explains Hennigh. “We are building relationships in the country and it is a very pleasant place to work.”

Irving, though a local subsidiary, has thus far acquired three projects, all located on Japan’s northernmost island of Hokkaido. Each of the projects holds great promise from an exploration standpoint, but Omui is the one that excites Hennigh most at this early stage, and with good reason.

Chip sampling off float boulders on the property returned assay numbers the company termed “exceptional”. The assays included samples of 480 grams per tonne (g/t) gold and 9,660 g/t silver, 143.5 g/t gold and 2,090 g/t silver, and others of similar quality. Even the newcomer to investing in precious metals will recognize those grades as being virtually off the charts.

“Omui is a very high-grade epithermal vein system exposed at surface and there was limited mining there in the 1920s,” explains Hennigh. “We expanded our land position by filing for applications for additional tenements, and have also started to prospect beyond the historic Omui mining area.”

Importantly, the exploration team has also found Omui’s rock to contain silica, a common element accompanying veined precious metal deposits, and critical to ore processing in Japan. The early results indicate rock at Omui being very low in toxic elements such as arsenic and antimony as well, suggesting any deposit outlined at the project could yield ideal smelter feed for domestic refineries.

While Hennigh and Levinson will be spending quite a bit of time in Japan going forward, when not there they have teammates to rely on in the country who are second to none.

Hidetoshi Takaoka enjoyed a long career at Sumitomo Metal Mining, helping to explore the Hishikari deposit and sharing credit for finding and developing Alaska’s world class Pogo gold deposit. “I’d say Mr. Takaoka is Japan’s best known geologist,” says Hennigh.

Irving also considers itself fortunate to be working with Haruo Harada and Mitsui Mineral Development Engineering Co., Ltd. (MINDECO) for assistance with permitting applications and other work with specific engineering requirements.

Dr. Kuang Ine Lu, an Irving Resources director who earned a Ph. D in Economic Geology from the University of Tokyo, brings yet another experienced hand to evaluate projects and strategy based on years of local experience.

Longer term, the plan at Irving is to prove up deposits from which to sell smelter feed to domestic smelters.

Hennigh is quick to point out, though, that the company intends to move ahead in a methodical manner, so as to make the most of its financial resources and ensure the highest possible likelihood of ultimate success.

“We are looking to shore up our land positions in the next few months and then starting in May begin field work on the various projects,” says Hennigh. “Omui will be first, as it is our most advanced project and is giving us the best numbers. But we will explore Utanobori, Rubeshibe and possibly other projects we are considering with chip sampling, mapping, soil sampling and maybe some geophysics. This year will focus on refining targets and it will probably be 2018 when we are ready to get drills turning.”

Interestingly, Hennigh says that experienced drill teams are available in Japan not only owing to mineral exploration but also because resorts and energy projects drill to tap hot springs throughout the country. They use core drills primarily, which is exactly what Irving wants so that it can preserve layers of rock and assess veining at various depths in detail.

Shareholders will be happy to learn that the depths Irving envisions its targets at are not that daunting, with Hishikari’s deepest levels of 350m serving us a good indicator for a Japanese precious metals deposit.

And because of Japan’s size and advanced development, project accessibility is not an issue. “Most areas in Japan are accessible by road and we don’t have to walk more than half a kilometer to any of the sites,” says Hennigh.

The stars seem aligned to make 2017 an exciting year for Hennigh, Levinson and the rest of the Irving Resources team. With field work starting in a few months and early project showings nothing short of outstanding, the company is set to draw attention to a country whose potential for precious metals exploration has largely been overlooked.

This story was originally published at www.proactiveinvestors.com on Feb 27, 2017 and featured in The CSE Quarterly.

Learn more about Irving Resources Inc. at https://www.irvresources.com/ and on the CSE website at http://thecse.com/en/listings/mining/irving-resources-inc.

Mining for Movies: Virtual Reality booms for Imagination Park and its low-risk approach to Hollywood

In a world where corporations with big budgets toil night and day to eke out what often are mere single-digit profit margins, the idea of a company making modest, low-risk investments and generating swift returns of 1,000% or more seems fanciful. Such a company would have to operate in an innovative industry facing serious capacity constraints, and be one of the few groups holding the keys that unlock the potential to address them.

Well, meet Imagination Park (CSE:IP), a young company that actually is on such a path, working in a realm that over time is likely to touch each and every one of our lives…virtual reality (VR).

Imagination Park is home to a multi-talented team whose members have sold feature films, concepts, scripts and intellectual property to some of the largest entertainment studios in the world. It is a company that seems to have the business side of the industry figured out, pursuing a model that provides multiple chances to make exceptional returns while limiting financial risk to a minimum.

How do they do it? They follow the money.

“I am a film producer by trade and learned early on that the best money in film is not made in production or finance, but in intellectual property,” says Gabriel Napora, Imagination Park’s Chief Executive Officer. “Our mission is to create, option or purchase the most compelling intellectual property in the fields of film and VR.”

More on virtual reality in a moment, but to illustrate the power of ideas in the entertainment industry, consider a story Napora tells about one of his many successful projects. “Early in my career, I produced a project called Tetravaal with a young director on a budget of about $4,000. Tetravaal won the attention of the right people and ended up being the precursor to Chappie, which had a budget of around $70 million. But it all grew from an idea that originally cost only a few thousand dollars to produce.”

Imagination Park brings substantial heft to its projects thanks to a team whose members include two highly successful producers — Napora, plus Imagination Park President Tim Marlowe who was the Executive Producer for The Lady in Number 6, which won an Academy Award. Colin Wiebe, a creative entrepreneur, digital marketing expert and musician who toured with the likes of rock legend Randy Bachman chairs the board of directors, which also includes producer and ace talent scout Yas Taalat. The top execs oversee a technical group on the special effects and virtual reality fronts that is second to none. This is a company ready to leverage technical and cost advantages to compete in a large and rapidly growing market for the products and services in which it specializes with an emphasis on 360 degree, 3D virtual reality content.

“Netflix had a budget of around $6 billion last year, you can expect Amazon to match that or be higher, and HBO will have to do the same,” explains Wiebe. “With more and more people binge-watching on Netflix content gets consumed very quickly, so studios have to both be shooting around the clock plus looking outside their walls. But the fact is that there are only so many quality content producers around and only so many production facilities.”

Imagination Park takes advantage of this growing supply/demand imbalance not only by producing films and other content, but also with virtual reality services and more conventional production support.

It does this in a clever way from a financial perspective, structuring agreements so they pay on both the front and back ends. “In film, and to some degree virtual reality, the riskiest thing is financing. No matter how smart you are, nobody can guarantee that a film is going to make money,” says Napora.

“When we create, option or license intellectual property to present to major studios there is always an upfront fee paid by the studio before we go into production. In most cases, we also earn producer fees to move things forward. By the time the film goes into the world we have already made an exponential return, and if the film is successful we’ll make even more. So, our model is significantly less risky than one involved in actually financing films.”

In the next few months the world will get to see a series of Imagination Park projects, including a full-length feature film starring Danny Trejo, several virtual reality pieces, and a full-length documentary. “We are close to having around 18 projects either created, optioned or acquired on our basic slate for 2017,” says Wiebe.

A proof of concept is like a mini-trailer, but the intended audience is a studio or other entity who would purchase or financially support the idea. Imagination Park creates proof of concept packages for third-party filmmakers as well as for itself to market its own concepts developed internally. Napora’s Tetravaal production was a proof of concept.

“Looking back, I have been able to sell about 50% of the projects I have been involved in to major studios,” says Napora. “I am not saying we will sell half of everything we are involved in going forward, but even if we were to sell three or four we would be a very well-to-do company. If we are right on two or three projects and they turn into hits, we become a major Hollywood player.”

On the virtual reality side, Imagination Park has created content soon to be for sale in virtual reality stores. It will also work with advertising agencies, and with film studios that have a new title ready to go but need virtual reality content online to help excite potential moviegoers.

“Sales of virtual reality equipment have exceeded $1 billion and this is not even the beginning of the curve,” says Wiebe. “We are currently in discussions with some major corporations focused strictly on advertising. We have detailed proposals going out to major companies and see this as being the very start of something that will spark a huge wave of virtual reality service work for us.”

The modest investment philosophy extends to all corners of the company, with the chairman saying it is important to stay lean and mean. “Nobody is getting big salaries. Everything is performance-based and we have specific budgets for travel and projects.”

Virtual reality, proofs of concept, feature films and production work are enough to keep the Imagination Park team busy on its North American home turf, but China beckons as well. The Asian country is a huge and rapidly expanding market for feature films, and Napora happens to have both experience and connections there, plus an understanding of the types of concepts that sell to its unique audience.

“There are opportunities now that never existed in the past and they are there for the taking if you know the right people, have the right product, and have a team that can execute,” says Wiebe. “It is like mining for movies. But ours is a mining project where you know in advance that the value is there. All you have to do is go and get it. The skyrocketing virtual reality trend has been an added surprise discovery that luckily we’ve been way ahead of. ”

This story was originally published at www.proactiveinvestors.com on Nov 24, 2016 and featured in The CSE Quarterly.

Learn more about Imagination Park Entertainment Inc. at http://imaginationpark.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/imagination-park-entertainment-inc.

True Leaf twins medical marijuana ambitions with growing line of hemp supplements for pets

Canadian marijuana stocks have been some of the best performing investments of 2016, as the Liberal Government that came to power toward the end of last year made legalization of the drug one of its planks during the federal election.

It is unclear, however, precisely what form legalization will take from the perspective of producers, as there is sure to be regulation and oversight when it comes to growing and distribution. Investment in a would-be producer is somewhat of a binary play — if a company obtains approval to produce under the current or any new regulatory regime, it has the potential to generate revenue and show investors that its management team can run a profitable business. If for whatever reason it does not get a green light to produce, then it’s back to the drawing board.

True Leaf Medicine International (CSE:MJ) was an early entrant in the space, being the 48th company to submit a production application to Health Canada. But while highly confident that its application will eventually receive the government’s endorsement, the company has aggressively developed a related business whose early success has caught the attention of investors and removes some of the concern about ongoing sustainability. If Health Canada grants True Leaf approval to produce marijuana within the next year or so, it will essentially come as a very large bonus.

Harnessing the spending habits of millennials when it comes to both their own health and that of their animal friends, True Leaf established a new division in autumn of 2015 to develop and market nutritional supplements for pets that contain hemp and other ingredients targeting specific health conditions. According to Chief Executive Officer Darcy Bomford, True Leaf sees annual sales in the True Leaf Pet division potentially reaching close to $30 million in five years’ time.

“We know we can sell pet products today and there are no legal issues. We have a great product line and that is our focus,” explains Bomford. “We count zero revenue on the True Leaf Medicine side in our model, so any value attributed as we move through the various stages of Health Canada’s approvals process just improves our prospects.”

Bomford knows of what he speaks when it comes to pet products, having spent some 25 years of his career to date in the manufacture and marketing of natural products for the industry. His previous company was purchased in 2012, which freed him up to work with True Leaf, and further to consider the pet food space once the non-compete clause in the transaction agreement had expired.

“A lot of people don’t realize how big the pet food industry is until they get a dog – once you go to the pet food aisle or a specialty retailer, that is when you sense its massive size,” says Bomford. “Our product line is geared toward the millennial and baby boomer generations, which tend to appreciate natural ingredients and the value of nutritional balance.”

Being in a big industry is great, but it typically means there is lots of competition. Fortunately for True Leaf, their products have clear points of differentiation.

True Hemp Chews come in three different formulations: Hip + Joint, Calming and Health.

“Hip + Joint is for inflammation in older dogs, Calming is for anxious dogs, and Health incorporates antioxidants for general wellness support,” says Bomford. “Each formula has a hemp seed or hemp seed oil base, and then we add other ingredients. Hip + Joint has natural sources of glucosamine from green lip mussel, and it also contains turmeric root, which is known to have anti-inflammatory properties. With Calming we use an amino acid from green tea call L-theanine, plus calming herbs such as chamomile and lemon balm. Health support has DHA, a form of Omega-3 from algae, and pomegranate.”

True Leaf has gotten True Hemp Chews onto the shelves of approximately 500 retail outlets in North America so far. Next steps involve building out the line with new products and increasing the store count. Bomford sees the line extensions leading to larger order sizes from both distributors and individual stores. “We have an oil product that you pour on your pet’s food every day, and a stick format that covers the chewing function,” says Bomford. “Down the road we are looking at launching a veterinary line with higher inclusions of the active ingredients and a functional chew for cats that addresses joint health.”

Moving quickly to make the most of its early-mover advantage, True Leaf introduced True Hemp Chews to the European market in May of this year and is now featured in the well-established Pets Corner chain of stores in the UK. Expansion into continental Europe is on tap for 2017.

True Leaf developed its products with assistance from a graduate student at Cornell University, and given his background Bomford knows how to take the formulations, brand them properly and build the business. “We use the co-pack model to avoid becoming capital intensive,” explain Bomford. “With my previous contacts I know basically all of the manufacturers worldwide, so we leverage other companies’ manufacturing capacity and focus our efforts on the brand. This is a necessary model for international expansion because we can have products made to order locally. We just provide the packaging and then are able to warehouse nearby and serve that geographic market.”

Balance in nutrition and balance in business. It is a combination that investors so far seem to be liking, and the philosophy has enabled Bomford to attract a balanced management team as well, with deep experience in everything from marketing to finance and quality control. Even former British Columbia Premier Mike Harcourt is on board – quite literally, as Chairman.

“I think in general, the marijuana producers that have legs at this stage of the industry’s development are those with alternative revenue streams. That is what our pet supplement division provides us and we are happy with our progress there so far,” Bomford concludes. “True Leaf has a very good chance to develop its Medicine division as a supplier of medical marijuana, but you have to put yourself in a position to weather the storm that is the approvals process. I believe we have set our company up well to do that.”

This story was originally published at www.proactiveinvestors.com on Nov 21, 2016 and featured in The CSE Quarterly.

Learn more about True Leaf Medicine International Ltd. at https://trueleafpet.com/ and on the CSE website at http://thecse.com/en/listings/life-sciences/true-leaf-medicine-international-ltd.

Fantasy 6 Sports blends top technology trends to create own momentum in Big Data

Fantasy 6 Sports (CSE:FYS) is a challenge to figure out at first because it is so cutting-edge you can’t think of any obvious comparisons to help put its business into context. A fascinating array of concepts to be sure, but how do you wrap your head around it?

Best start with the broader theme and work your way down to the individual businesses, then consider how they fit together. By the way, we are talking about a company simultaneously shaping fields such as Virtual Reality, Artificial Intelligence, Augmented Reality, Blockchain and Big Data – only 5 of the 10 technology trends forecast to define the world’s digital landscape in 2017.

At its most basic, Fantasy 6 leverages its capabilities in these technology segments to help brands take their consumer engagement to the next level. “It doesn’t matter what type of industry you look at, data is driving decisions,” explains Ray Walia, Fantasy 6’s Chief Operating Officer and a 20-year veteran of the technology scene. “We are collecting data, we can anonymize it and it can drive decisions for other brands and corporations.”

Sounds like any number of Big Data companies who passively collect data and try to re-sell it with some analytical bells and whistles to entities who need insight into their target customers, right?

Here is where Fantasy 6 is different – this company generates its own data by interacting with a specific consumer base valuable to existing and potential clients. Because it collects data this way, its database is unique and proprietary. And it focuses on a very large and multi-faceted business sector that provides new opportunities for data collection and analysis every day – sports.

A good starting point in exploring the product side is FansUnite, a platform Fantasy 6 acquired earlier this year and is in the process of turbocharging from both the user appeal and business potential perspectives.

True to its name, FansUnite is a place where sports fans who like to bet on games come together to discuss strategies and try to develop an edge, or simply just learn more. “The idea is we are building a community around sports betting and sports predictions that adds a layer of direct fan engagement,” says Walia.

FansUnite gives members a free virtual currency so that they can place bets without putting actual money on the line. It’s the perfect risk-free way to keep score and it gives you bragging rights if you’re good. More importantly for the platform, it separates the skilled from the newcomers and inspires serious discussions around strategy and upcoming opportunities. And for those who operate in the real-money betting world, FansUnite is a universe rich in sports and odds aficionados who can help give them an edge. Think you know better than everyone else what is going to happen in tonight’s game? Well, put your virtual money where your mouth is.

The proprietary data side is well illustrated by shifting popularity among sports, and even the emergence of new competitive pastimes. “The most popular sport in North America for betting is the NFL, worldwide by far it is soccer, but the fastest growing one is e-sports,” says Walia. “The emergence of e-sports has caught a lot of people off guard. Having a site like FansUnite collecting all this data, you cut through the noise and the hype and people are actually seeing that there is active engagement worldwide.” By the way, e-sports is video gamers competing in organized competitions with games such as Counterstrike, League of Legends and other titles you may know. And don’t harrumph – these competitions fill stadiums with spectators.

Mobile games and Virtual Reality (VR)/Augmented Reality (AR) games are additional arrows in the Fantasy 6 quiver, the first commercial release being Football Fantasy Coach. As you might have already guessed, Football Fantasy Coach requires the player to analyze a virtual game scenario and call plays. As with fantasy sports, your choices are based on real players, with the game providing performance statistics that change in real time as actual games are being played. “It is a bridge of technology into the real world that directly engages the fan,” explains Walia. And it is one more way for Fantasy 6 to collect data for analysis alongside other sources to draw conclusions for client brands.

It is not all just about online experiences, mind you. Some of the “immersive” work that Fantasy 6 does requires actual fan participation, such as when the team built a “dynamic 360 virtual arena” for one of the largest companies in Canada recently that enabled visitors to have their pictures taken and receive an image on their mobile phones that looked as if they were standing at centre ice in Toronto’s Air Canada Centre. Not quite the same as lining up to the right of Auston Matthews, but still pretty cool.

“We maintain the right focus by keeping balance among these three verticals,” says Walia. “Each has synergies with the others but they all have different skills required to execute. The games division is going on its own with good partners and intellectual property, the data division is collecting data and it is a different audience that they appeal to. And then the immersive side is more corporate relationships.”

And who does Walia think would be willing to pay the big dollars for high-quality sports data? “In context, our data is all around sports odds and so those who can benefit include any entity in gaming, casinos or sports books for a start. They will value the data one way, and then a sportswear company would have its own different use.”

Fantasy 6 is well-funded to move forward with its plan, having received a convertible note facility in the amount of $10 million from fund Victory Square, which Walia, with partner and Fantasy 6 Chief Executive Officer Shafin Tejani, oversee.

And unlike a lot of technology companies for which revenue always seems to be a “tomorrow” concept, Walia has made sure that sustainability is part of the corporate ethos. “The convertible note is designed to show that we have the wherewithal to execute, but a lot of the ideas we pursue are intended to generate revenue and be self-sustaining. That is one of the reasons why we are able to tackle all three of our verticals at the same time. They leverage each other but drive revenue on their own and the teams sustain themselves.”

The next six to nine months will see data continue to build, the games division debut new titles in different genres, and a big push on the immersive experiences side, with the lead role in a $1.5 million fan experience project for the BC Sports Hall of Fame in Vancouver a part of the effort.

“We are putting ourselves in position to be a strong player in VR/AR and mobile games as well as sports data driven by artificial intelligence, which will be the long tail,” says Walia. “There will be huge value and opportunity around that. And we know that Virtual Reality is attracting attention and we can connect brands with this and other technologies to help them reach important objectives.”

This story was originally published at www.proactiveinvestors.com on Nov 30, 2016 and featured in The CSE Quarterly.

Learn more about Fantasy 6 Sports Inc. at http://fantasy6.com/ and on the CSE website at http://thecse.com/en/listings/technology/fantasy-6-sports-inc.

FanDom Sports Media prepares to turn online sports chat into a whole new ballgame

It all started with a lighthearted debate between husband and wife that ended in a draw, both sides claiming their friends would agree that they were right. “Of course they would,” each thought, recognizing friends could hardly be relied upon to render an impartial judgement. But from this stalemate emerged an idea: in our increasingly digital age, wouldn’t it be something if there were a virtual space to go where groups of people could provide a ruling?

The next step was to figure out how to apply this inspiration to the business world. Blair Naughty, the husband side of that fortuitous quarrel, took the idea to friend and seasoned technology entrepreneur Bill McGraw, whose advice was to run with the concept but focus it on a particular set of consumers prone to taking sides.

Long story short, the two now run FanDom Sports Media Corp. (CSE:FDM), Naughty as CEO and McGraw as president.

FanDom’s business revolves around an app and supporting network that aims to function as the global center for sports chat. “You won’t come to FanDom to find out the score,” explains McGraw. “You’ll come to FanDom to find out what people are saying about the score.”

The FanDom concept goes well beyond conventional comment streams, its basic framework designed to supply the one element all high-traffic mobile apps need – a compulsion loop. In layman’s terms, the compulsion loop is the particular thing about an app that keeps people coming back. It’s what prevents you from putting down the game you are playing, even though you know that there are more productive things you could be doing with your time.

Compulsion loops are pretty complex things, based on a deep understanding of the sociology of your core user base. For FanDom, the compulsion loop is an environment in which users essentially become players who compete in multiple ways to determine a result important to them as sports fans.

FanDom users will vote on arguments, taking one side or the other and betting on the outcome with virtual currency. But don’t mistake this for a gambling app, because that’s definitely not what it is.

All FanDom users will initially receive virtual currency to use for betting on debates. The more you contribute to discussions and the better you are at choosing winners, the more currency you will stockpile and the higher your standing will be on the platform.

There are many personality profiles to whom this could appeal, but imagine the sports enthusiast who thinks he knows just as much, if not more, about his favorite teams as the pundits…or even the coaches. On FanDom, you’ll not only get to offer your opinion in the comment streams but also wager on and influence the outcomes of debates on a variety of topics. Think you’re right? Prove it.

“Our initial challenge will be to ensure we have enough content,” says McGraw. “If I vote on eight or nine topics during my morning commute and then look again at lunchtime, there had better be some different opinions in there, because if it is the same ones I’ll conclude that this isn’t much fun.”

Getting off to a strong start will surely be important, and while the app itself is only just heading into beta phase, the game plan for quickly establishing a committed user base is ready to go.

Part of the plan is to dovetail the initial app launch with primetime on the sports calendar.

“Football is starting soon, as well as hockey and then basketball, and of course we have the Major League Baseball playoffs,” explains McGraw. “We have a pre-launch plan that will integrate with events at some major universities. We’d look to do a regional launch in Southern California, then move to the top 15 to 20 population centers in the United States. From there it should begin to generate its own momentum.”

Once critical mass is reached, McGraw says that FanDom has multiple monetization levers it can pull, some conventional, such as online advertising, and others reflecting the unique dynamics of the FanDom app. Examples in the latter category could include sponsorships when FanDom builds discussions around a major sports figure who participates actively on the platform.

Merchandising is another opportunity. “With some things you end up making more money by tying what goes on in the app to what is going on offline,” says McGraw. “I have been doing this for many years and can tell you that there is no magic bullet. You just have to go back in day after day and look for a new place to generate traffic and monetize. You have to let the content people do what they do, and another side of the team has to become the monetization engine.”

Scores of apps are put on the Apple and Android stores every day, but a miniscule percentage have the quality of team behind them that FanDom enjoys. McGraw has stickhandled the launches of over 30 games and mobile apps. Other team members bring decades of game development, online marketing, athlete management and branding experience. The athletes McGraw says the company is lining up participation agreements with are almost all household names. The potential for creating buzz is enormous.

The trick will be to take that buzz and shape it in such a way as to leverage it optimally for FanDom, its users, as well as its athlete participants and their sponsors, a process that will require observation plus more than a little trial and error. “My experience tells me that whatever we end up building, the consumer will use it in different ways than we anticipate. Or the areas we did not think would be that popular will be, or vice versa. Having the team in place that we do gives us the best cut at it to begin with and then we can iterate on that as we go.”

An important aspect of the platform McGraw is confident predicting the course of, however, is that FanDom automatically roots out users who behave inappropriately, which will be welcome news to anyone who has noticed that sports comment streams often devolve into personal bicker-fests. “We will have some moderation of comments, but the testing we have done shows that the whole point of coming to FanDom is to vote ideas up or down,” says McGraw. “Selfish, misogynistic or threatening comments simply fall down the stream and get no attention, because there is no reason to vote on them.”

That will be significant because part of the plan calls for extending beyond the mobile screens of individual users to the televisions in venues where broadcasts are viewed by the public. Think fans at a bar in Boston debating with their counterparts in Los Angeles ahead of a big game between teams from the two cities.

On a bus, on a train, in the airport lounge or sitting at home with your pals, FanDom aims to give everyday people a chance to be part of the action. Perhaps not to the point of donning a uniform and stepping on the field, but to have a voice in an arena with rules, time limits and participants of varying skill is in some ways like an actual game. Real sports fans care passionately about their teams. McGraw is betting that many of them will care enough to carry that passion into FanDom.

This story was originally published at www.proactiveinvestors.com on Sep 7, 2016 and featured in The CSE Quarterly.

Learn more about FanDom Sports Media at http://www.fandomsportsmedia.com/ and on the CSE website at http://thecse.com/en/listings/technology/fandom-sports-media-corp

ParcelPal sees stars aligning as it readies same-day and one-hour delivery services for full launch

This story was originally published at www.proactiveinvestors.com on Sep 6, 2016 and featured in The CSE Quarterly.

“I want it and I want it now.” So the pundits say is the mindset of millennials, a generation that has grown up amid instant access to information and unprecedented awareness of other peoples’ lifestyles. Businesses, for their part, have long been this way, as some processes simply cannot move forward without the availability of certain items or documents.

Vancouver-based ParcelPal Technology Inc. (CSE:PKG) is counting on these dynamics, looking to provide on-demand (within 1 hour) and same-day delivery in local markets that beats the likes of Canada Post, FedEx and local carriers hands down. The prize is a portion of what the company claims is a market in which billions of dollars are spent each year getting items from one location to another.

The ParcelPal platform is a user-friendly marriage of software and logistics. When a customer wants something delivered they enter the details via computer or mobile device and a courier registered with ParcelPal is alerted to the request. Much like the famed Uber system for local transportation, couriers are rated by customers, and the higher your rank the more likely you are to receive the initial alert.

ParcelPal has aimed its sights on the B2B and B2C markets to begin, focusing on both e-commerce websites and storefronts. “Currently, the delivery process is full of paperwork, phone calls and waybills,” says Jason Moreau, ParcelPal’s Chief Executive Officer. “It is ripe for automation, and by utilizing smartphone and GPS technology we have been able to automate the courier request and engineer a standard of delivery I think people will be very impressed with. Our software is scalable and we can launch in new cities quite quickly.”

Once a courier accepts a delivery request, wheels are set in motion both literally and figuratively. The courier travels immediately to the pickup point and takes possession of the package. As the courier makes his way to the destination, GPS technology is used to monitor progress. No more sitting at home all afternoon waiting for something to arrive – the customers on each end of the transaction can see precisely what is happening so they can make any related decisions accordingly.

The cost is reasonable, at $3.99 within a 4km radius for same-day delivery and $6.99 within that same radius for 1-hour service. Charges on top of the base rate are added for deliveries of more than 4km or for packages weighing more than 25kg.

Of the fee, 80% goes to the courier and 20% to ParcelPal. ParcelPal has also implemented an insurance program whereby customers can select to insure their items for up to $1,000. The company gets 100% of the insurance revenue.

Vice President of Operations Kelly Abbott explains that ParcelPal currently has some 1,600 couriers registered to deliver its packages, each of whom has undergone a screening process and training session to ensure they represent the company professionally.

“Potential couriers come in and meet us and we do a background check and an in-depth training session,” says Abbott. “We have them do a single delivery, then we show them how the application works and how to handle various delivery scenarios. Delivery standards are our main concern, so if anything goes wrong, such as if a courier is on time for pickup but takes forever to drop the parcel off, his rating will turn negative and he will automatically be removed from the system.”

Also reflecting the Uber model, couriers have the opportunity to rate customers. In this way, automation introduces efficiency but accountability is maintained through detailed monitoring of operations and real-time rating of the system’s various human components.

In the first quarter of this year, ParcelPal conducted a six-week beta launch during which it delivered over 200 packages in Vancouver and the surrounding area, its couriers traveling over 5,000km in total. The launch went “very well” according to Moreau.

In the near term, the team is continuing with its soft launch in Vancouver, slowly building the local user base and working out any kinks in the system before heading nationwide, likely in the first half of 2017. “We are receiving inquiries from Toronto and Calgary saying ‘when are you going to be here,’ but we have to make sure it is perfect first,” says Moreau. “Right now Canada is pretty much a land-grab, as anyone with a similar model is focusing on big hubs in the United States.”

Moreau says that one of the verticals envisioned is integration of the ParcelPal platform with online e-commerce websites. “What that means is a company selling shoes, or virtually any product, in a given city can integrate with ParcelPal and during the online check-out process ask how the buyer wants their goods delivered. Do you want it on-demand, same-day, or do you want it through a traditional courier that might take days? ParcelPal would handle the same day and on-demand scenarios.”

Moreau and Abbott realize that ParcelPal will have to cement its reputation before big retailers agree to feature it as a delivery option on their websites. But for smaller retailers for whom such a service could be an immediate boon to business, the API (coder lingo for the ParcelPal computer program a retailer would hook up to its system) and Shopify plug-in are available for download.

Lest anyone conclude that ParcelPal can establish itself as a household name overnight, Moreau is quick to point to the growth curve experienced by Postmates, a local delivery service based in San Francisco that was established in 2011. “It took them about five months to do their first 1,000 deliveries,” explains Moreau. A graph distributed by Postmates founder Bastian Lehmann showed it taking 116 weeks to reach 500,000 deliveries, but then only another 20 weeks to reach 1 million.

All things considered, ParcelPal seems off to a good start, with business in the first half of 2016 having moved forward according to schedule. The company recently ran an online advertising campaign which further convinced management that demand for speedy delivery is out there waiting to be met, particularly among consumers.

“We did an online ad campaign as an experiment of sorts, comparing business shipping versus consumer,” explains Abbott. “We got a little traction on the business side, but on the consumer side we got over 8,500 visits over the course of a month. It was basically an ad asking if the viewer was interested in having food, shoes or clothing delivered right to them.”

Consumer scenarios are limited in number only by one’s imagination, but a busy person needing a particular article of clothing for a function or a group wanting to order food from a restaurant are ones to which ParcelPal is perfectly suited. ParcelPal is planning to launch its consumer app early in the fall.

“Consumers will have the ability to order whatever they wish,” says Abbott. “We’ve created an on-demand marketplace right in your pocket, whether you want your lunch delivered, or you want our drivers to pick up your dry cleaning, it will be possible to have it at your door within an hour.”

For the second half of the year “we anticipate full launch of our consumer app and doing a large campaign in Vancouver,” says Moreau. “Once we are sure it is perfect then we’re going across Canada. We are a nimble young company building out some spectacular technology, and when the consumer app comes out in the fall that is where it begins to get really exciting.”

Learn more about ParcelPal Technology Inc. at https://www.parcelpal.com/ and on the CSE website at http://thecse.com/en/listings/technology/parcelpal-technology-inc

Carl Data Solutions is shaping its own niche in the Internet of Things revolution

It is a big statement to make that one’s company is working on an important part of a fourth Industrial Revolution. But listening to Greg Johnston, and the particular analogy he uses to put Carl Data Solutions Inc.’s (CSE: CRL, FSE:7C5) achievements into context, it is a statement that actually makes quite a lot of sense.

Those of us old enough to remember the pre-Internet days can probably recall when we first heard about the World Wide Web and thought “What would I need that for?” Fast-forward to today and the question has become “How would I live without it?”

Such is the dynamic that Johnston, who is Carl’s President and Chief Executive Officer, believes will take place over coming years with the so-called Internet of Things, which at its core involves appliances, automobiles and other everyday devices communicating with one another to make our lives safer, easier and more efficient.

“When the Internet came into play people did not know what it was and some perhaps dismissed it as just another trend that was going to be out of style in a couple of years,” Johnston explains. “Of course, the Internet changed distribution, it changed businesses, and continues to do so every single day. New devices, smart meters, data loggers and the products we are building do just that. It’s the Internet of Things and they are calling it the fourth Industrial Revolution.”

Carl got its start in 2014, analyzing bulk data from social media and other public sources for consumer marketing purposes. “When we started, we worked with unstructured information such as text from social media posts, media shares, photos, videos and the like,” Johnston says. “It was looking at social media and making this mass of information into something orderly and more useful, mainly for the purposes of social referral marketing, which has grown to become a more effective form of marketing than traditional strategies.”

Drawing on two decades of experience in e-commerce and database management, Johnston sensed that applying his team’s skills to increase the efficiency of industries lacking advanced analytical tools would be what ultimately separated his company from the pack. “It was always our intention to get into another vertical we thought had great promise but was underserved by technology and current marketing offerings, and the area we decided to focus on was the utilities sector,” he says.

In the fourth quarter of 2015 Carl acquired FlowWorks Inc., and with it an array of capabilities perfectly suited to utilities and municipal waterworks. Put simply, FlowWorks collects data from sensors within a city’s physical network and then applies layers of analytics to determine everything from how its systems can operate more effectively to the potential for a flood or failure in the city’s water or sewer network.

“Most cities have sensors throughout their storm water and sewage systems,” Johnston offers by way of example. “Every few minutes data loggers transmit information that can be collected, stored and funneled into the FlowWorks application that city employees can use on desktops or mobile phones to see what’s going on. This level of analysis used to take days and now we can deliver it in near real time.”

In addition to contracts with a number of cities in British Columbia, Carl works with a long list of large cities in other parts of Canada and the United States. In July, the company announced a contract to provide its services to the City of Toronto in a collaborative effort with a major engineering consulting firm it has worked closely with over the years on other projects.

Carl reported sales of just over C$227,000 in the first quarter of 2016 ended March, and since revenue is primarily recurring in nature, recent contract wins, plus more anticipated before the end of the year, have the potential to push the top line for full-year 2016 quite comfortably into the seven-figure range.

“Our revenue is based on three areas: setup fees, recurring licensing fees and customization fees,” says Johnston. “Out of those three, recurring licensing is the one growing the fastest. The other two really are enablers for the licensing revenues. I would say that right now about 90% of revenue, of which roughly 60% is in US dollars, comes from FlowWorks business. Growing those revenues is going to remain our main focus for the remainder of 2016 in conjunction with some possible utility-related acquisitions.”

Being an early mover in any business segment brings the opportunity to help shape that market and Carl looks set to benefit from being a standard-bearer in advanced analytics for the utilities sector.

Johnston explains that most of the company’s contracts are obtained by partnering with hardware vendors. When a city issues a Request for Proposals (the contract award process commonly referred to as an ‘RFP’), more often than not they want not only pumps, regulators and other infrastructure equipment but access to the detailed information that these devices generate.

“What seems to be happening more and more is that the hardware vendors can’t provide a software application with the tools and functions that a city is looking for, so they partner with us to complete the RFP and stand out from other firms who are also bidding for the job. The majority of our contracts are like that now and we are starting to see cities include compatibility with FlowWorks as a requirement in their RFPs. In other words, the analytics solution must have the certain feature set that our FlowWorks application has. This is great because it means word is getting out and cities are recognizing how valuable the platform and its capabilities are.”

It is worth noting that Carl’s analytics platform is “hardware agnostic” and thus not limited to interfacing with certain brands or models of equipment like some of the software solutions FlowWorks’ competitors provide. All Carl needs is the raw data, sent from a physical data logger, through its cloud service, and into its application.

At the end of the day, making systems run better means they cost less, perform more effectively and operate more safely. And given the scale of infrastructure that a platform such as Carl’s can improve almost immediately, the potential to directly influence the lives of large numbers of people is clear.

Taking things a step further, Carl’s platform will soon go beyond historical analysis and near real-time monitoring into the realm of predictive modeling. Here, machine learning and other processes will be used for comparing layers of data to pinpoint anomalies that could herald problems with the potential to result in floods or infrastructure failure. Identifying weak spots within gas pipelines is a good example of the capabilities of machine learning.

“Think sensors on cars: 12 records per minute times 12 sensors per car times 3 million cars operating almost 365 days a year – that is a lot of information going back to a manufacturer,” says Johnston offering one last illustration. “It is going to be the same for the utilities sector. They need a way to understand information at a glance and use analytics to figure out how they can make more intelligent decisions managing their infrastructure and resources. That is how we are going to help them – by providing innovative solutions and offering advanced analytics that make better sense of their data in less time and at lower cost than has ever been possible.”

IGEN Networks takes relationship between car and driver to a whole new level

This story was originally published at www.proactiveinvestors.com on Sep 03, 2015 and featured in The CSE Quarterly.

Have you ever wished you knew how fast your teenage son was driving your car when he borrows it? Or exactly where dear old dad is when he is 40 minutes late for a family dinner?

Or that your car battery is about to conk out before it does so and leaves you stranded in the middle of a downpour?

If so, then you’ll want to know about IGEN Networks Corp. (CSE:IGN; OTCQB:IGEN), as the company is beginning to commercialise a system that sends all this information and more straight to your mobile phone in real time.

From monitoring the location and driving behavior of family members to tracking a fleet of drivers to ensure they are doing what you pay them to, the enhancements to safety and efficiency are far-reaching.

IGEN President and CEO Neil Chan and his team have really thought this through, to the point that not only does their solution address safety problems for drivers but also marketing problems for car dealers.

The chain of use begins when a new car arrives on a dealer lot and is installed with the IGEN hardware, a box about half the size of a computer mouse. Dealers are able to track cars if they are stolen, and the companies that finance the cars know how many cars are on each dealer lot. They will know which ones too, as the system provides the Vehicle Identification Number unique to each automobile as part of its data feed.

When a customer purchases a new car they have the opportunity to subscribe to the IGEN service and have a full array of real-time data available to them to monitor the conditions and use of their car.

The dealer benefits as well, not only from having sold the system but also because it creates an ongoing connection with the car purchaser. One of the biggest challenges for car dealers is customer retention. In other words, once a customer purchases a car, how do you get them to come back to you for their next purchase, and in the interim how do you keep them loyal to your dealership for oil changes and other service?

Because the IGEN system is monitoring the vehicle, it can automatically inform the owner when it is time for an oil change. But this can be programmed as a dealer function as well. That way, the dealer can e-mail the owner to let them know that their automobile needs servicing, and perhaps send a coupon or some other type of enticement along with the message to encourage the owner to use the dealership.

“Less than 10% of customers come back to the dealer after the warranty period expires,” Chan points out.

It is the classic win-win situation, where the customer and the business both derive clearly identifiable benefits from use of the system.

Another benefit to consumers is the potential for lower insurance rates. In this scenario, the driver chooses an insurance company that agrees to a discounted premium in exchange for the ability to monitor driving habits so the insurer knows if the driver is operating the vehicle safely and adhering to limitations within the terms of the policy. The owner saves money and the insurance company knows it is underwriting someone who realizes they are being monitored and therefore had better drive responsibly.

Chan explains that the insurance industry in the United States suffers some $15 billion each year in what is known as “rating errors,” essentially money left on the table by insurance companies because they are incorrectly assessing the behavior of the drivers they insure. “The fact is they are guessing and don’t really know how you drive,” says Chan.

“The premium discounts come from the ability of the insurance company to have better visibility on your driving patterns. We have the capability within our platform to know whether you are a good driver or a bad driver. We have developed algorithms along with insurance companies to determine that as it relates to premium discounts.”

Chan names some of the biggest insurers in the United States and says “this is where they are heading – if you want a discount on your insurance you will have to have one of these in your car.”

The driving force behind the idea and creation of the technology to support it is Chan himself, whose background fits the IGEN vision perfectly. As Senior Vice President for Sales and Marketing at Webtech Wireless, a leader in GPS-based fleet management, Chan was essentially responsible for executing the company’s strategic plan. Under his watch, Webtech grew to have 800 customers and some 240,000 location devices in over 40 countries.

Earlier in his career, Chan founded and built Motorola’s broadband access business in the Asia Pacific region, establishing 12 regional offices along the way, and was involved in the actual creation of wireless broadband through a company he helped put together called Airvana.

Thanks to these and other Senior roles at successful technology companies, Chan also understands a relatively new, but very important, market that depends on our use of mobile phones, computers and other connected devices – big data.

Once IGEN has enough vehicles equipped with its monitoring hardware, it will be able to profile drivers in different jurisdictions and pool data that can be analyzed to show how people live their lives, via their cars. Marketers, government, infrastructure planners and many others should be willing to pay a pretty penny for IGEN data and related analytics.

“I can be specific regarding the various services we offer but at the end of the day this is our business,” says Chan of analytics. “We know the lifestyle of a family based on the time they are spending in the car. Who is driving and how much time are you spending in various locations throughout the day? There is a lot of information there and our model is targeted at the consumer segment, where we are going to get the biggest sample.”

Almost sure to make that sample larger over time is a relationship with Verizon Wireless in the United States announced on May 21 of this year. Under the agreement, Verizon sales representatives will sell IGEN’s system to automobile dealers in addition to the telephones and other products they are already marketing.

“One of the first things I always used to do was go find the gorilla to hold its hand, and that was usually the carrier. I get inside the carrier to develop a relationship and that is how you expand your channels,” says Chan.

“With the Verizon partnership, we are preparing the Verizon sales force to sell our products and services into dealer channels across the United States. We do business with 500 dealerships now but there are 25,000 new car dealerships in the country, so we have barely scratched the surface.” Chan goes on to explain that a large dealership sees about 500 vehicles pass through its lot every month.

When asked to boil the appeal for drivers down to a single concept, Chan is quick to choose “consumer empowerment.” He explains this using transportation trailblazer Uber as an analogy. “What the difference is between before Uber and the present is now the consumer interacts directly with the driver. It is simple but it has created a billion dollar industry. We’ve bypassed competitors who require you to talk to someone to get information. With IGEN the information goes directly to you.”

And taking that concept one step further, could the benefits extend beyond paying customers by serving one day as a solution to the plague of bad driving? “I believe family behavior changes,” says Chan. “I have never been alerted on speeding with any of my kids when they have taken the car. It does change everyone’s behavior for the better.”

Revenue in the quarter through June 30 was US$289,065, some 90% of it from hardware sales. The first year of service is baked into the initial sale, and profit margins are good, but it is in the second year — the renewals — when the margins get really juicy.

“We are bringing the control back to the consumer,” says Chan in summary. “Providing that direct information to the consumer is really the essence. Being able to collect and use that data, being in the analytics business, is where we think the future is. And we understand technically how all this needs to come together, and what metrics you need to focus on to make sure you have a profitable and ongoing business for the long term.”

Learn more about IGEN Networks Corp. at http://www.igen-networks.com/ and on the CSE website at http://thecse.com/en/listings/technology/igen-networks-corp

Global Gardens’ Veggemo beverage targets fast-growing dairy alternative space with fresh approach

This story was originally published at www.proactiveinvestors.com on December 8, 2015 and featured in The CSE Quarterly.

With typical acerbic wit, the late columnist Mike Royko once offered his readers a simple rule for eating healthily: “If you enjoy it, you can’t have it; if you don’t like it, you can eat all you want.”

That was a little over three decades ago, when there was probably some element of truth to Royko’s tongue-in-cheek guideline. Today, however, the list of products that not only are tasty but also good for you is long and growing.

Global Gardens Group (CSE:VGM) made that list a little longer on November 5 when it released a product line aimed squarely at the highly popular almond and soy milks that many health-conscious adults view as a refrigerator staple.

Veggemo is a vegetable based dairy alternative that tastes delicious and feels so much like milk, according to the company, that even devoted milk drinkers will be hard-pressed not to give it serious consideration. Factor in the absence of bad stuff like trans fats and cholesterol and one begins to understand why the Global Gardens management team so deeply believes it has a winning combination on its hands.

That combination might never have come together were it not for a fateful meeting four years ago between now president and chief executive officer (CEO) Rob Harrison and vice president (VP) of  Marketing, Wade Bayne.

Harrison had traveled to Vancouver from Ontario to see an early version of the product at an incubator group founded by executives from Lululemon. Bayne had been invited to the office that day as well, and the two experienced consumer goods executives quickly found themselves on the same page. “We both perceived a huge opportunity,” says Harrison.

Bayne, whose background includes executive positions at names like Molson Coors and Procter & Gamble, explains that being in the right business at the right time is everything. “In an industry that is enjoying great growth, even an average company can do well, whereas in an industry that is flat or declining, a strong company will struggle,” he says.

“So, before you choose where you want to be, find an industry that has strong growth driven by factors that are sustainable.”

Harrison, who has advised the likes of Heinz, Nabisco and Nestle, claims that the dairy alternative beverage category is growing at double-digits per quarter, which compares to 1-2% growth for consumer goods overall in Canada.

And then there is dairy itself.

“You see dairy milk declining on a per capita basis for the last 25 years and people migrating to our category,” explains Harrison. “As marketers, you see exponential growth, a new category, great margins and strong demand from consumers, and we believe this shift is going to continue.”

Harrison says the alternative dairy industry is now valued at over $2 billion in North America.

In the four years since Harrison and Bayne met at the incubator, countless versions of the beverage have been created, a number of which were taken out for testing with large groups of consumers. The main tests took place in two waves: the first led to the conclusion that protein was breaking too strongly through the flavor matrix, thus causing consumers in the trials to report a slightly bitter taste.

“Protein doesn’t taste good,” says Bayne, “so you have to mask it and we spent three months getting that right.”

The next wave of testers liked the taste but said they would prefer the product to possess a little more body, “so we dialed up the texture to replicate a 1% or 2% milk,” says Bayne.

One might wonder how a vegetable-based drink manages its slightly off-white color. Bayne credits ingredients such as potatoes, organic potato starch, tapioca and a white-yellow pea sourced from Belgium for the milk-like hue. “It is not an artificial colour,” he points out emphatically, adding that genetically modified, or GMO, ingredients are similarly banned from the Veggemo recipe.

With the product perfected, the fourth quarter of 2015 was chosen for the start of an aggressive yet prudent roll-out.

“There are two things you measure in this business, and the first is distribution,” explains Harrison.

“We had set out to be in 450 stores at the end of the first quarter of 2016 and it appears the number is going to be closer to 800.”

Six months from the beginning of product roll-out the goal is to be in approximately 1,800 stores across Canada, including those run by several of the leading chains.

The roll-out continues in further stages to include chilled Veggemo (the first phase involves shelf-stable product, which is packaged in an environment such that the beverage remains fresh on the shelf for up to 14 months) and the addition of stores in the United States.

Looking a bit further out, Harrison says the company has its eye on the global marketplace, as North America accounts for only 18% of dairy alternative beverage sales volume worldwide. There are many attractive markets for Global Gardens to consider, he says, both for sheer size and, in some cases, high levels of lactose intolerance within the population.

A product can be fantastic, but if people don’t try it they will never know. Harrison and Bayne have already considered the appeal factor from multiple angles and have a game plan to ensure that consumers across the country find the product if not one way, then another. This, of course, drives the second metric Harrison was hinting at: sales per point of distribution, or how many units you are selling at each store.

Key to this is the brand and its character, which Bayne describes as “light-hearted, approachable and playful.”  A naturopath in Colorado that Harrison and Bayne refer to as a “guru” asserted that many healthy food choices brand in such a way as to appeal to hard-core health food consumers; because of this, however, they effectively alienate a large percentage of “average” consumers not drawn to a product branded in that fashion.

The packages for Veggemo’s three flavors – original, unsweetened and vanilla – are each different but share a common visual theme characterized by happy animals in fantasy-like nature settings. To say they stand out sitting amid rows of competitor’s containers, almost all featuring a white beverage splashing into a glass or cereal bowl, is an understatement.

Then there is in-store product demonstration, which begins this month.

“We will be doing product tastings at about 1,000 stores so that shoppers can come and try Veggemo before they make a purchasing decision,” says Bayne.

Prices for Veggemo, which at first will be offered only in the 946ml size, will differ from region to region and by retailer, but the company’s suggested retail price is $3.49. This is in the middle of the category and at a level that leaves a very nice margin both for the retailer and for Global Gardens, and the company’s margin can be expected to climb in later years as economies of scale and other efficiencies take root.

Research indicates that a consumer making a health and wellness purchase decision tends to be less price sensitive than an average consumer, and because Veggemo is so innovative it is essentially creating a new segment of non-dairy beverages. Indeed, at the recent Grocery Innovations Canada show, Veggemo was chosen as one of the 10 most innovative products, which is quite an accomplishment given that there were some 300 products at the show.

While one eye will always be on profit, Harrison understands that execution of the business plan is the most important thing as the company begins to establish the brand.

“The gross margin is great and the selling price is great, but it is really about the management team, the category growth and how we have positioned this product,” he explains. “We have a point of differentiation that is research-based and are selling an everyday consumer good resistant to recession.”

Investors seem to share Harrison’s belief. When the company went out to raise capital in the second quarter of this year, its target was $2.5 million. It ended up with $4.3 million.

A commitment to running lean and mean should help to make those funds stretch a long way. A team of just five people has brought the company to its current state, with an aversion to owning fixed assets serving to keep costs mostly on the variable side of the ledger. “We are a company that fits the times,” says Harrison. “Who wants to own fixed assets and a factory with lots of people when there are groups whose business it is to do that?”

Going onto shelves in the likes of Walmart, Save-On-Foods, IGA Market Place, Calgary Coop, Metro Quebec, Thrifty Foods and London Drugs there is bound to be at least one retailer close to most people in Canada carrying Veggemo no later than April. Try it. You might like it, and if you do…you can have as much as you want.

Learn more about Global Gardens Group Inc at http://globalgardensgroup.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/global-gardens-group-inc

Golden Leaf shows way for public marijuana companies with strategy timed to perfection

This story was originally published at www.proactiveinvestors.com on December 9, 2015 and featured in The CSE Quarterly.

The rush of junior public companies into the marijuana space over the past couple of years has been fast and furious as laws regulating the drug’s use changed in Canada and some US states.

Despite the best of intentions, many of these companies have not fared well, though in fairness regulatory hang-ups undermined momentum for those focused on operating in Canada.

Golden Leaf Holdings (CSE:GLH) chose a decidedly different path by positioning itself to take advantage of regulatory change in states on the US west coast. It turned out to be a shrewd move, as the company has gone from strength to strength literally since day one.

Golden Leaf was established in May 2014 and in the one-and-a-half years since has succeeded in growing sales to over US$1 million per month. Oregon has proven to be the perfect jurisdiction for its operations, with the company having been able to legally sell its refined marijuana oil products to medical marijuana users since inception.

Recreational use was legalized in Oregon on October 1 of this year, but the only products that can be purchased through approved dispensaries at the moment are dried leaves and buds. Golden Leaf chief executive officer (CEO) Don Robinson anticipates that the second half of 2016 will bring permission for dispensaries to sell oils and edibles to recreational users, a move that would expand the market for Golden Leaf’s products by leaps and bounds.

All Golden Leaf products are based on the extraction and refining of oil from marijuana plants. The oil is sold in a variety of delivery systems, including vaporizers and edible products, the latter slated for introduction late in the current quarter or early in 2016.

“Our business model is built around the lowest cost production of the highest quality oils, based on competitive advantage, economies of scale and intellectual property,” explains Robinson.

“We think we have a different approach to the industry than other companies.”

Well-funded (the company raised a total of US$17 million in two financing rounds prior to going public on October 14 of this year) and with a strong team, Golden Leaf has proven its ability to move quickly when opportunities present themselves.

“We believe we are the biggest extractor in all of North America – we don’t know anyone bigger,” says Robinson in describing the company’s market position.

“Our growth has been explosive, from $150,000 in revenue in September 2014 to over $1 million in April 2015. We have added equipment in the last month, and by the end of this year will have doubled our output capacity and be at a monthly run rate of $2.5 million.”

Robinson explains that the company has been able to sell all of the product it makes, and that further capacity will be needed once refined products become legal for sale to recreational users. So far, Golden Leaf’s sales have come entirely from the medical use market in Oregon.

Right next door to Oregon, of course, is Washington State, where the market is twice the size of Oregon’s.

“When you put Washington and Oregon together, you are looking at a combined market of US$2.5 billion, and almost 1.4 million consumers,” says Robinson.

Keeping up with demand will require significant capital spending. “Capex for us,” explains Robinson, “is all about acquiring more machines. Each machine is close to $300,000 dollars with a two-month payback. We had three machines and added two over the summer, and by the end of the year will have 11. With each extractor you need support and auxiliary equipment because you extract with one machine and refine with another. That is the bulk of our capital spending.”

Funds have also been used to enable production of marijuana itself. “We are attempting to grow all of the feedstock for our extraction process and the reason we want to be self-reliant on feedstock is we believe it is important to be organic. You also get a better quality of feedstock if you do it yourself as opposed to buying it on the open market, where it is inconsistent.”

That claim was borne out in a November 18 press release from the company giving quality control through in-house production part of the credit for extraction yields reaching 14%, up 50% from the year-to-date average to the highest level ever experienced by the company.

From a structural perspective, part of that credit belongs to a Golden Leaf subsidiary in Israel called Green Point Science, which conducts research and development work.

“Everything that happens in Israel with cannabis is best practice,” explains Robinson. ”They have been experimenting with cannabis since the early 1970s and we are adopting their best practice in growing, breeding and greenhouse operations. In a perfect world, we would have our own strain optimized for extraction that would grow faster, with less light, less water and more disease resistance, and therefore be organic.”

Golden Leaf has grown at breakneck speed so far and with recreational use of oils in Oregon seemingly on the horizon, demand looks like something the company may never have to worry about. Still, it is hardly a bad thing that ongoing regulatory change in other parts of the country, and even nationally, will likely to add to its demand prospects.

“Four states and Washington DC are legal medically and recreationally, the states being Alaska, Colorado, Washington, and Oregon,” says Robinson. “In addition, 23 states are in some form of decriminalization.”

Then there is the national front. “The Obama administration took a big step earlier this summer and now allows research into medical marijuana,” Robinson explains.

“Up to now it has been illegal so claims as to the efficacy of marijuana from a medical standpoint are all anecdotal. Once medical studies start coming in that prove efficacy in a formal way, you will see a sea change.”

Getting back to the principle of positioning for change before it happens, Robinson points to the strength of his team and says that when it comes to management, “we have invested ahead.”

It is all about striking the right balance, mixing team members with years of experience in various aspects of the marijuana industry with executives from outside the space who bring branding and other valuable skills.

“This is going to be a very big business and we believe it requires the best of big business practice applied to cannabis,” says Robinson. “It is that marriage of talent plus ready access to capital that will enable us to continue taking advantage of opportunities as they come our way.”

Learn more about Golden Leaf Holdings at http://goldenleafholdings.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/golden-leaf-holdings-ltd