Tag Archives: cse issuer stories

CSE Issuer Stories, Magazine

Gage Growth: The steady hand wins the race in this company’s playbook

When it comes to cannabis in the state of Michigan, Gage Growth (CSE:GAGE) is the name an increasing number of consumers are turning to. Still a young company, having been in operation for just over 18 months, Gage has nonetheless amassed one of the largest asset portfolios in the state. Experience at the leadership level is key to this success.

Gage’s Chief Executive Officer, Fabian Monaco, is a former lawyer and investment banker who was actively involved in the evolution of the cannabis industry. He was a key member of the team that transacted the first cannabis acquisition, Tweed (now known as Canopy Growth)’s purchase of Bedrocan, and also the first-ever cannabis IPO. Also on the team is cannabis impresario Bruce Linton, who serves as Chairman. Another big name is TerrAscend’s Executive Chairman Jason Wild, who has a large stake in the company.

What is it about Gage that attracts some of the most successful executives in the cannabis industry? For one, Gage is on track to be Michigan’s number one operator by the end of 2021, with 14 facilities either in operation or planned. Its first set of financial statements as a public company showed a big quarter-over-quarter jump in revenue, and a corresponding increase in its profit margin.

Clearly, the decision to start things off in Michigan was a good one.

“One of our founders is from Michigan and the other founder has a strong connection to Michigan through family,” says Monaco. “The biggest reason we chose the state, though, is that it had the second-largest medical cardholder system behind California for many years. Their caregiver program was introduced in 2008, and thanks to that, individuals have been going to dispensaries for over a decade.”

Monaco goes on to explain that close to 75% of the population in Michigan is of age to consume, and that after December 1, 2019, which was the first day of adult-use sales in the state, cannabis commerce skyrocketed. Michigan was outside the top 10 states by revenue at the time, but quickly vaulted to sixth, just behind Illinois. Today, it surpasses Illinois consistently and ranks third.

“It’s been playing out pretty much as we thought it would,” says Monaco.

In a market that size, there is bound to be healthy competition. But Gage has established some important points of differentiation and leverages them to the fullest.

“We really focus on every part of the value chain of the business, from seed to smoke,” says Monaco. “We’re constantly hunting, looking for new cultivars to bring to the table for patients and for consumers. A lot of producers out there – especially some of the publicly traded ones – don’t really grow a lot of varieties, and we pride ourselves on having 40, 50, sometimes even 60 different flavours within our retail locations for people to choose from.”

Monaco says that post-production processes are just as important, and that Gage hang-dries its product, trims it, and packages it. “We have this fun, bright, engaging packaging as well for our flower that people enjoy, and we manage most sales through our own retail channels.“

In addition to having identified a prime jurisdiction in which to operate, Gage also knows who it’s targeting to buy its products.

“In general, we’re going after the former medical user – a refined consumer, someone who has been consuming the product for many, many years,” Monaco explains. “We have a really wide variety of customers.”

The Gage business strategy calls for vertical integration and establishing operations strongly in a single state before taking its proven model and applying it in other states.

“We’re going to focus on one market for the better part of 2021, although we do anticipate doing something outside of Michigan near the end of the year,” Monaco says. “We’re trying to follow that Trulieve (Trulieve Cannabis; CSE:TRUL) model where you execute really well in one state and use that as a springboard to enter other states. Once we feel comfortable with where we’re at, especially as we approach the end of the year, you’ll see us branch out into other states.”

With expansion seemingly just around the corner, the question of where Gage will decide to go next is an obvious one. Monaco believes there is “phenomenal” opportunity throughout the United States and his team has already assessed several states this year. He says there is a lot to like. Plans call for focusing on some of the larger markets with Gage’s first few acquisitions. Massachusetts, Illinois, Ohio, Maryland, California and Pennsylvania are all in the running.

“You’ll probably see us make a move into one of the larger states pretty soon,” says Monaco.

Looking out over the next two or three years, Monaco says Gage is strongly positioned to take advantage of a wide range of opportunities that present themselves as the industry evolves.

“We have a solid cash balance to execute our plans in Michigan and didn’t really take on any harsh payment obligations, in terms of sale leasebacks or debt, over the past couple of years,” Monaco explains. “Now we have the opportunity to tap into some of the lower cost of capital opportunities that cannabis companies are seeing these days. Because our cultivation assets are unencumbered, and we own our retail locations, it really affords us the opportunity to go after some debt to fuel growth without having to dilute shareholders.”

From an earnings perspective, Monaco believes Gage can both increase revenue and expand margins rapidly, because Gage products so frequently sell out.

As for the higher goals, Gage is probably not all that far from achieving some of them already, though the walk before you run mindset remains firmly in place.

“Personally, I’d love to be number one in Michigan, our home base, and then a top player in two or three other states. I think it’s important to remain focused in Michigan before we branch out. We’ll look to be one of the top three in each respective state we go to within the next 24 to 36 months.”

This story was featured in the Canadian Securities Exchange magazine.

Learn more about Gage Growth at http://www.gageusa.com

CSE Issuer Stories, Magazine

Verano Holdings: A 14-state footprint and coveted brands set this Chicago-based cannabis company apart

Verano Holdings (CSE:VRNO) Chief Executive Officer George Archos has connected the dots of opportunity to create one of the biggest cannabis companies in the US. Based in Chicago, the vertically integrated, multi-state operator was valued at around $3 billion when it went public in February of this year. 

The 42-year-old serial entrepreneur, who also co-founded the Wildberry Pancakes & Café chain, was inspired to start Verano after seeing the potential of medical cannabis.

“I looked at the medical marijuana opportunity that came up in my home state of Illinois and saw it was a strong challenge. I also saw that it offered the benefit of helping people. I had an uncle that had multiple sclerosis and I think that he could have benefited from it when he was suffering,” says Archos.

“We applied for a license in 2014 and were selling product a year later. We started off small with less than 10 employees and we scaled over the years as the markets grew.”

From its roots in Chicago, Verano has evolved into a broad-based powerhouse with a 14-state footprint. It has cultivation, production and dispensary licenses across several states, lending it multiple revenue streams.

Verano has 28 retail locations under the Zen Leaf banner and 50 additional operating dispensaries, with plans to open around 10 more this year. It also has 340 active dispensary wholesale partnerships.

Verano was doing well before the pandemic and its strong growth shows no sign of slowing down. For the first quarter ended March 31, Verano revenue soared 117% to US$143.3 million compared to the first quarter a year earlier.

“Verano has massive upside over the next few years and for the long term as a cannabis green wave continues to sweep across the country,” says Archos. 

“We are seeing more daily-use consumers, besides more and more medical patients coming online every single day. Sales have been strong this year and we anticipate good sales in the back half of the year as well.”

The Verano boss chalks up being able to execute well on mergers and acquisitions to going public earlier this year. 

“Going public has given us access to capital, which has allowed us to transact on the M&A front. We have built on some very strong acquisitions to the Verano platform, which has given us access to markets like Florida, Arizona and Pennsylvania,” says Archos. 

“It’s really helped us deepen our footprint and bring some high-quality operators to the Verano family.”

In February, Verano closed a key merger with Florida-based Alternative Medical Enterprises that gave it access to 34 active retail locations in Florida, with more planned by the end of 2021, and one retail location in Phoenix. It also boosted the company’s cultivation facilities to 220,000 square feet in Florida and 30,000 square feet in Arizona, with expansion of an additional 60,000 square feet currently underway.

The company has also engaged in significant M&A activity in Florida, Arizona, Pennsylvania, Illinois and Ohio, increasing assets such as dispensary locations and grower/processor sites.

Verano has completed the acquisitions of Territory Dispensary, Emerald Dispensary and The Local Joint, giving the company the third-largest retail footprint in Arizona, with six active storefronts and two cultivation facilities. 

Verano has also expanded its dispensary footprint through M&A with TerraVida in the Philadelphia metropolitan area and acquired three dispensaries in the Pittsburgh metropolitan area through the Healing Center.  

“M&A has been a part of our story and we will continue down that path when we find assets and people that make sense for Verano. We like to transact so we do see more M&A in our future,” says Archos. 

“We are well funded for expansion of M&A activities so we’re in a very good position.”

Verano had $111.6 million in cash and equivalents as of March 31, and recently completed a $100 million upsizing of its credit facility to $130 million, for total liquidity of roughly $241.6 million.

“Given both its strong cash position, and strong free cash generation, the company is well positioned to fund both organic (supported by in excess of $100 million in CAPEX in 2021) and acquisition driven growth,” said ATB Capital Markets. 

Significantly, Verano’s cash flow from operations for the first quarter was $42 million, and free cash flow totaled $4 million.

Through its 10 cultivation and production facilities, Verano produces a suite of artisanal cannabis products sold under its portfolio of brands: Avexia, Verano, Encore and MÜV. These are positioned as premium brands, so the company enjoys premium pricing and higher margins.

“When Verano started off, we positioned ourselves as a premium producer, that’s just how we built our facilities,” says Archos.

“That’s how we marketed our products, and it goes into the hand trimming and level of detail that we put into every jar, and every product that we put onto the shelves.” 

By blending cannabinoids (THC and CBD), the firm’s Avexia Medical Cannabis brand has a portfolio of balms and lotions for pain relief, an Epsom salt soak, and a line of micro-dose tablets. Separately, the Verano brand has handy “swift lift” pre-rolls, refined vapes, and concentrates, while Encore Edibles produces handcrafted chocolates, mints, gummies, hard candies and caramels.

Meanwhile, MÜV has received multiple patents for its award-winning products that provide high-quality, reliable medical cannabis for patients.  

“We consistently add cultivation as markets scale, so we are constantly under construction in almost every market, adding flower capacity and manufacturing capacity because every market is growing,” says Archos.

“Verano sometimes is as much of a construction company as we are a cannabis company.”

Verano has opened three Zen Leaf dispensaries in New Jersey, where the expansion of its 120,000 square feet cultivation facility is underway in anticipation of the onset of adult-use sales in the state.

“Being profitable and cash flow positive was important to us, so we have been very good stewards of our capital,” Archos concludes. “We have deployed funds where we thought we could get the quickest return on investment.”

This story was featured in the Canadian Securities Exchange magazine.

Learn more about Verano Holdings at https://verano.com/

CSE Issuer Stories, Magazine

Temas Resources: Financial and environmental benefits are some of the good things that come from thinking outside the box

At first glance, Temas Resources (CSE:TMAS) is an explorer with two key mineral assets: a titanium project in Quebec and the intent to acquire a boron property in Serbia. As these commodities are used to make products such as paint, fertilizers and pharmaceuticals, Temas is positioned as a potential supplier to the specialty chemicals sector.

A deal was announced by the company in late January of this year that adds an exciting new strategic dimension. With its acquisition of a large stake in ORF Technologies, Temas will have access to patented, cost-efficient and eco-friendly processes for extracting, separating and recovering nickel, iron, gold and titanium dioxide.

Expanding the number of angles to the Temas story suits Chief Executive Officer Michael Dehn just fine. The new CEO has been involved in the titanium industry for years but honed his early skills in the gold sector in Red Lake with Rob McEwen and Goldcorp.

“I see us becoming a mining technology or mineral processing company,” Dehn tells Public Entrepreneur.

The key here is how all of the assets work together. The company’s flagship La Blache project is a 2,653-hectare property approximately 100 kilometres north of the community of Baie-Comeau, Quebec. It is home to the Farrell-Taylor magnetite-ilmenite lens, where consistent iron, titanium and vanadium grades are found across the entire length of the complex.

Preliminary metallurgical testing of oxide mineralization indicated 90% recovery of iron and 95% recovery of vanadium into a final high-purity product. A titanium dioxide product suitable for further processing to pigment-grade titanium dioxide was fully recovered in testing.

La Blache’s value lies not only in the ground but also in its proximity to key end users in North America. Temas is looking at processing in Ohio, which is close to at least five major US paint producers. What’s more, production at La Blache could be powered by tapping into the area’s electrical grid, making it a greener option than alternatives reliant on diesel.

There are other ways in which the project is green as well, as Dehn describes. “Your mine is wherever the rocks are. In our case, about 65% of the recovered rock goes into a finished product. We’re using around 65% of the rock to recover iron, vanadium and titanium.”

Shortly after Dehn joined Temas in November 2020, the company formed a strategic partnership with Erin Ventures to develop the Piskanja borate project in Serbia. Piskanja has an indicated mineral resource of 7.8 million tonnes averaging 31% boron oxide and an inferred resource of 3.4 million tonnes averaging 29% boron oxide. The project will be the only production of borates on the European continent, according to Temas.

Boron is primarily used in chemical compounds, with around half of all boron used as an additive in fibreglass for insulation and structural materials. The next leading use is in polymers and ceramics in high-strength, lightweight structural and refractory materials.

For Temas, adding Piskanja to its portfolio didn’t trigger much debate. “It’s such an obvious project,” says Dehn. “We have reasonable capital expectations to get to production in a country with very strong mining roots. The European Union and European Bank for Reconstruction and Development are trying to encourage Serbia to phase out coal mining, which means there is going to be a locally skilled workforce that will be looking for another opportunity.”

Under the terms of the agreement with Erin Ventures, Temas will commit to spending a total of €10.5 million toward the development of Piskanja within a three-year period. Erin will remain operator on the project until Temas has exercised the option to earn a 50% interest in its subsidiary, Balkan Gold, at which point Temas will become operator of Piskanja. The two companies expect to finalize the agreement by April of this year.

Between Piskanja and La Blache, Temas already has a couple of company-making projects. The acquisition of ORF Technologies was the missing component that can take things to the next level.

ORF’s technology is estimated to be 59.2% better on a production cost basis, leading to a process that is around 144% more cost-efficient than that used by the world’s largest titanium dioxide producer, The Chemours Company. ORF’s process is less energy-intensive than the industry standard and can create high-quality titanium dioxide from low-grade materials, which contain contaminants that competitors must discard, according to Dehn.

With the ORF approach, rock is dissolved in hydrochloric acid to selectively extract metals such as titanium, nickel or vanadium. The purity of the extracted elements is extremely high.

“We can go right from an ilmenite ore to a titanium dioxide without having to go through several intermediate steps, which is what the rest of the industry has to do,” Dehn explains. The same goes for commodities such as nickel, which now is in higher demand thanks to the red-hot electric vehicle market.

Temas plans to acquire a 50% interest in ORF. The company will fund certain ongoing expenses through secured loans, including acquisition and development of new technology, to be repaid from income generated by ORF before declaration of dividends to ORF shareholders.

Temas is in good financial shape to advance its 2021 agenda. Since November, the company has raised $5 million via Crescita Capital and an additional $3.6 million in flow-through funding.

It’s an undeniably exciting time for Temas, and right where you would expect to find a team that Dehn says is constantly thinking outside the box.

“We don’t want to do things the traditional way,” says Dehn. “Instead of blindly going forward with how things are always done, look for the opportunity that’s going to give you a quicker return on your investment but also leave a smaller environmental footprint.”

This story was featured in the Public Entrepreneur magazine.

Learn more about Temas Resources at http://www.temasresources.com/

CSE Issuer Stories, Magazine

Getchell Gold: High grades at Nevada projects have this team’s confidence running strong

When Getchell Gold (CSE:GTCH) optioned the Fondaway Canyon gold project in January of last year, President Mike Sieb had never felt more confident that he was making the right move.
To Sieb, a 30-year industry veteran known for a combination of technical ability and senior management experience, the Fondaway site checked all the boxes, particularly given the stellar data left behind by the previous owners.

Fondaway is a past gold producer with a legacy resource estimated at 1 million ounces. Located a mere two-hour drive from Reno, Nevada, it is easily accessible, which helps to keep costs reasonable. Nevada is also a mining-friendly state, so taking the project from exploration to a fully functioning mine would not generate a red-tape nightmare.

“The mineralization is very apparent on the surface,” Sieb explains to Public Entrepreneur. “That’s really the package that finally brings us to the table. You’re starting off with a healthy foundation to work from, and when we started to do even just a cursory review of the asset it was readily apparent that the historic resource was actually quite constrained.”

In fact, as Getchell’s team continues work on Fondaway, the opportunities to in-fill and expand the mineralization zones are becoming quite evident.

Early assay results from the company’s inaugural 1,995-metre diamond drill program in 2020 to test the geological model of the Colorado zone exceeded expectations and set in motion plans to ramp up drilling and develop a mine model.

“It’s not very often that every hole of an exploration drill program returns gold intersections as good as or better than anticipated,” Sieb says. “Our 2020 drill program substantially expanded the known mineralization and demonstrated that our broadest gold zones remain open with excellent potential for further extension.”
Sieb, who called the findings “an absolute rarity from my experience,” says all six drillholes show promise. One high-grade standout hole pierced the main Half Moon Shear Vein 54 metres below surface and registered 8.6 grams per ton gold over 9.8 metres. Another returned 21.9 metres grading 6.2 grams per ton.
“The success here is that what we represented in the model actually showed up in the real world. We know that we have what we modelled. We know what the historic work accomplished and what it represents. The model indicated that there is a substantial 100-metre-thick band of mineralization that you can envision,” Sieb says.
“The 2020 drill program was designed to prove that the very thick band of mineralization actually exists and that it has real potential continuity.”

Toronto-based Getchell obtained the Fondaway property from Canagold Resources as part of a four-year option agreement under which Getchell can acquire a 100% interest in the site at any time.
In return, Getchell pays Canagold $2 million in cash as well as $2 million in shares. And it must spend $1.45 million on exploration. Canagold also will retain a 2% net smelter return royalty should Getchell acquire its 100% stake in Fondaway.

The property was first staked in 1956, and after changing hands over the decades Canagold obtained it in 2017 and released a resource estimate showing 2.01 million indicated tons grading 6.18 grams per ton gold and inferred resources of 3.2 million tons grading 6.4 grams per ton. Past drilling was extensive, comprising 735 holes for a total of 56,682 metres.

In addition to Fondaway, Getchell is developing a second property in Nevada – a high-grade copper, gold and silver project called Star. The company also controls the Dixie Comstock gold project and the Hot Springs Peak gold project in the state, but the Star project stands out. The site is 60 kilometres north of Fondaway. Sieb calls it “excellent bonus potential” for investors.

“We have developed fairly compelling targets that will be drilled and tested this year at Star,” Sieb explains. “This project has some really good high-grade showings on surface and some compelling geophysical targets at depth and has never been drilled before.”
Meanwhile, the company has the finances to push forward with Fondaway in 2021. Getchell has $1.6 million in the bank and about $3 million of warrants that are in the money. Sieb also notes Getchell is fortunate that it can spread its earn-in payments on Fondaway over four years rather than having to make a hefty outlay upfront.
Looking ahead to the rest of 2021, Sieb says Getchell plans to undertake a drill program to extend known mineralization and follow up on the newly discovered zone. It also plans to drill an additional 4,000 metres this year and is advancing toward a revised resource estimate.

“The next step is readily apparent. It’s going to be a major drill campaign that is going to start to fill in the open spots with a focus on developing a mine model,” Sieb explains.

Sieb says he’s already visualizing the next drill program at Fondaway and that it is now in the planning process.

“I can easily see where those holes are going to be located to start to further expand as well as in-fill the mineralization,” he explains. “And we’re also going to do another model of the mineralization to get a better sense of what we really have.”

This story was featured in the Public Entrepreneur magazine.

Learn more about Getchell Gold at https://www.getchellgold.com/

CSE Issuer Stories, Magazine

Appia Energy: The quest for a more balanced global supply of rare earths is underway in Saskatchewan

Tucked away in northern Saskatchewan, so close to the border that it practically touches the Northwest Territories, sits Alces Lake. It’s a gorgeous part of the province and the namesake for an important resource exploration project that happens to host the second-highest average grade of rare earth elements (REEs) in the world.

REEs are used in everything from permanent magnets for electric cars and wind turbines to lithium-ion batteries, as well as smartphones and the ceramics and glass found in superconductors. It’s an industry with rapidly accelerating demand, and Appia Energy (CSE:API), which owns 100% of the 14,334-hectare Alces Lake Project, is looking to become one of its major players.

Alces Lake has an in-situ average total rare earth oxide (TREO) grade of 16.65 weighted total percent (wt%). Anything with a wt% above 4 is considered high grade.

With a measure that high, a single metric ton of mineralization from Alces Lake would contain roughly 166.5 kilograms of TREO. Of that, 38.5 kilograms (a little less than 25%) would be what is known as critical rare earth oxide (CREO), which represents roughly 85% of the total mineralization’s dollar value.

Specifically, that’s neodymium, praseodymium, dysprosium and terbium. Or as a former US Department of Energy national laboratory director once put it, “the stuff you need the most but can’t get enough of.”

CREEs are particularly important in the production of permanent magnets, which are also found in everyday items such as audio speakers, laptops and refrigerators.

Appia’s Chief Executive Officer, Tom Drivas, believes his company can play an important role in filling a resource need that is only going to get bigger in years to come.

“It’s because of the grade, because of the technology, because of our location and because of the right mix of rare earths as well as the mineralogy,” Drivas tells Public Entrepreneur. “Because of all that, we’re in a very good position to have a stable supply in North America.”

Pay close attention to the “North America” part of that last statement. Right now, two-thirds of the world’s TREO supply comes from China, and more than 90% of the world’s magnets are produced there. The potential for disruption to the supply of rare earths and related products is real. During former US President Trump’s trade skirmish with China, for instance, China threatened a REE blackout, according to Asia Times Financial.

“Whoever controls the supply of critical material controls the economy – and that means jobs,” Drivas explains. “There’s lots of interest from the Western world to get to a position where they have the supply of critical materials to have the economy start moving and create jobs.”

COVID-19 didn’t do the rare earths supply chain any favours, either in China or anywhere else around the globe. For Appia, it meant paring down its exploration program in 2020.

Since 2017, the company has discovered 74 REE surface zones and occurrences over a 45-     kilometre strike area and completed 78 diamond drillholes, 64 that reached a depth of 50 metres or less and 14 that extended further. Appia has a 95% success rate at intersecting REE-bearing systems, and more than 99% of its property remains to be explored.

This year, Appia has a lot more time – and a lot more money – to do just that.

“We basically have three times the budget of last year,” Drivas notes. “We’re going to be spending $3 million to $4 million at least and see how it goes from there.”

The REE minerals at Alces Lake are contained within a caramel-coloured phosphate mineral called monazite. This is good, according to Drivas, because monazite is relatively easy to extract elements from, and companies have been doing it since the 1950s. Not every REE site is so lucky.

Currently, much of the world’s monazite is shipped to China, where it is processed into REEs. That too, though, is changing.

In August 2020, the Saskatchewan Research Council and the provincial government announced plans to build a first-of-its-kind REE processing facility in Saskatoon, which is expected to be up and running in late 2022.

On the agenda for Appia is a property-wide airborne magnetic, electromagnetic and radiometric geophysical survey, followed by additional surveying and geological mapping to track known mineralization trends and investigate any newly discovered radiometric anomalies.

From there, the company plans a diamond drilling program of at least 5,000 metres to explore for more high-grade REO occurrences.

In terms of how big this could get, Drivas points to two established REE producers: MP Materials and Lynas Rare Earths. They have market values of US$6.2 billion and US$4.5 billion, respectively. Appia’s is US$41.6 million.

“They’re the two main rare earth producers outside of China, but our grade is much better with what we’ve seen so far,” Drivas says.

It’s important to note that there is some diversification to the Appia story as well. The company has three uranium exploration projects over a total of 48,024 hectares in Saskatchewan: Loranger, Eastside and North Wollaston.

At Loranger, for instance, six of seven drillholes intersected uranium mineralization in the company’s first drill campaign. A second drill season was completed in 2019 and discovered a near-surface uranium zone that extends more than 900 metres.

Elsewhere, Appia has a 13,000-hectare uranium and REE property at Elliot Lake in Ontario. The Elliot Lake camp has produced more than 300 million pounds (136 million kilograms) of uranium and is the only mining camp in Canada with significant historical commercial rare earth element production.

Back at Alces Lake, the company seems to have the best of both worlds when it comes to where it finds its rare earths. Much of the high-grade material discovered to date is close to the surface, suggesting relatively easy extraction were a decision eventually made to put the project into production. In addition, a recent news release discusses that REE mineralization occurs within multiple sub-parallel trends of the system over 875 metres of strike length and down to 340 metres in vertical depth. With the mineralization hosted in monazite, it could be just what North American supply chains are looking for.

“If we can prove in the next few years that we’ve got a viable deposit here, there’s a lot of upside for Appia and the industry,” concludes Drivas.

This story was featured in the Public Entrepreneur magazine.

Learn more about Appia Energy at http://www.appiaenergy.ca/

CSE Issuer Stories, Magazine

Mistango River Resources: Strategic patience positions this Kirkland Lake explorer for its biggest year yet

Gold mining is a cyclical business, and right now the cycle is exactly where the industry wants it, with precious metals prices strong and investors eager to participate in the good times by backing well-run companies with capital. Macroeconomic factors, driven recently by the COVID-19 pandemic, are owed much of the credit, but the sector’s strong performance has actually been due for some time.

Few people understand these trends better than Stephen Stewart, an experienced resource industry executive and Chairman of junior explorer Mistango River Resources (CSE:MIS).

Stewart and his team have followed a pragmatic strategy that now sees Mistango drilling in Kirkland Lake, one of Canada’s most famous and productive gold camps.

Gold went through over half a decade of stagnation, trading in a fairly narrow range before breaking out to the upside in 2020, despite what some would argue was the macro background to move higher all along. What many industry executives saw as a crisis, however, Stewart recognized as opportunity.

Rather than ploughing cash into exploration during a downturn, Mistango took its time assembling a portfolio of high-quality assets then waited until investor interest returned and funds could be raised at an acceptable cost. With some $7 million in the treasury, now it’s time to put the growth part of the plan into action.

“No question about it, timing is everything, especially where I sit,” explains Stewart in a recent interview with Public Entrepreneur.

“We are now in what I would call our third phase. The first phase is buying cheap and the second phase is raising money at a good cost of capital. Now we are in the process of deploying that capital as intelligently and as efficiently as we possibly can so that we can either discover a new ore body or expand on a known one.”

Mistango’s first drill target is in Ontario’s famous Abitibi Greenstone Belt. The company is midway through a planned 10,000-metre drill program at its 4,300-hectare Kirkland West project, right next door to the Macassa Mine run by industry titan Kirkland Lake Gold. Macassa, by the way, is not only large, but also one of the highest-grade gold mines in the world.

“We are beside the third-largest gold ore body ever discovered, that has gone from east to west, and we’re the next property west,” says Stewart. “The anticipation is, and certainly my hope is, that we can extend that mineralization onto our property.”

Macassa, like Mistango’s project, sits on the major Cadillac-Larder Lake Break fault system, which is responsible for much of the 25 million ounces of gold produced at Kirkland Lake in the past 100 years or so.

Stewart reckons the current buzz around the Kirkland Lake area and the Canadian gold mining industry in general is justified as juniors get drills turning again, and impressive new discoveries, such as those in the equally famous Red Lake district, prove once again that Canada is one of the best gold mining jurisdictions in the world.

“Kirkland Lake has been mined for a hundred years. It’s going to be mined for a hundred more. There are more ore bodies that have not yet been discovered in that camp. There’s no question about it,” explains Stewart.

Mistango’s first phase of drilling targets three zones at Kirkland West, the first of which was the former Baldwin Mine, which is thought to sit on extensions of the main fault and where historical output showed grades of 15 grams per ton.

The Baldwin work is now complete and the rigs have crossed the river to test the main Cadillac-Larder Lake fault proper.

The company also plans to soon begin drilling its second asset, the advanced stage Omega Mine, which lies around 30 kilometres east of Kirkland West and has an NI 43-101 resource of around 585,000 indicated and inferred gold ounces.

In the middle of the last century, a mine at Omega churned out about a quarter of a million ounces. Notably, Omega also lies near some big names, including Agnico Eagle’s Upper Beaver deposit and the former Kerr Addison Mine, at one time Canada’s largest gold mine.

Omega is also just a few kilometres west of Orefinders Resources’ McGarry project, which hosts an indicated resource of 123,000 ounces of gold at 8.57 grams per ton.

Stewart points out that taken together, Orefinders and Mistango comprise one of the largest landholders on the Kirkland Lake/Cadillac-Larder Lake fault system.

Mistango is one of the companies in the Ore Group, which Stewart also chairs. Other companies in the group include QC Copper and Gold, American Eagle Gold and Orefinders.

So, how did Mistango manage to get its hands on such a prime piece of land? 

It’s fair to say that it took persistence. Ore Group, via Orefinders, put in an offer to buy Mistango a couple of years ago but was turned down by management. It later became a significant shareholder, initiated a proxy battle, and ultimately took control.

Next began the process of turning the company around, recapitalizing it and starting to put money into the ground, says Stewart.

“We consider that [Kirkland Lake] the Ore Group’s backyard. It’s a seven-hour drive from Toronto and we just know the area and we love it and so it was an opportunity to expand our position,” he says.

Mistango River has some impressive backers, notably resource icon Eric Sprott, who holds 20% of Mistango’s shares. Sprott was Chairman at Kirkland Lake Gold during much of its heyday when the stock went up over 20 times in value.

“When he saw our land package, he instantly chose to invest,” says Stewart.  

“He understands the possibility of the gold coming onto our property. He knows how pregnant those fault systems are with gold and took an educated guess on our company.”  

On the ground, Mistango also benefits from the insights of Vice President of Exploration Keith Benn, who has a PhD in structural geology and extensive experience with the Abitibi.

Director Charles Beaudry also has over 30 years of experience in exploration, project generation and business development.

Numerous corporate success stories involve years of patience and hard work before the tide turns and management finally has the opportunity to prove that its instincts were right. With a strong team, a healthy treasury and ongoing exploration of high-quality projects in one of the world’s best gold addresses, that moment looks to have arrived for Mistango River Resources.

This story was featured in the Public Entrepreneur magazine.

Learn more about Mistango River Resources
at https://mistango.com/

CSE Issuer Stories, Magazine

Kuya Silver: Near-term production, exploration shape a game plan based on a proven path to the big leagues

When putting together the business plan for a new company, incorporating lessons from the leaders in your industry is always a good idea. David Stein worked as a mining analyst beginning in the early 2000s and was among the first to initiate coverage on marquee names such as First Majestic and Fortuna Silver. When he decided to establish an exploration company of his own, he understood the models that tended to position small companies to become billion-dollar players.

Focusing on high-grade silver projects with the potential for near-term production, Kuya Silver (CSE:KUYA), where Stein is Chief Executive Officer, is active in Peru and Canada, two of the world’s most prolific jurisdictions for precious metals production. With a healthy treasury, a balanced approach to its projects and a strong silver market, the company is ready to begin putting its plan into action. Stein shared his strategy of silver production and ongoing exploration with Public Entrepreneur in mid-February.

Kuya is obviously silver-focused. Before we get into your two projects and the outlook for each, tell us why you chose silver.

It really comes down to finding an exceptional project and it just happened to be a silver project. I found the Bethania Mine opportunity in 2017, and while my background is in all sorts of different minerals, precious metals are the main ones.

As I started looking more into the silver mining industry, I noticed there was a huge opportunity because many of the intermediate and large silver players from 10 or 15 years ago had diversified away from silver and more into gold. Now there is this sort of a void in the industry where if you want to invest in a primary silver mining company there are very few options. The opportunity to have this exceptional project and be able to get into production quickly made it all the more exciting. 

Your plans for Bethania call for putting a local mine back into production and at the same time doing exploration to help with mine planning and resource expansion. How did you come across Bethania, and can you talk about the thinking behind this two-part plan?

In terms of how I found it, I went out on my own after being in the industry on the investment side for 15 or 16 years and was looking for projects, mostly privately owned opportunities. During the bear market I had focused on private equity as a niche within the mining sector. Bethania was one of the projects that came up.

In terms of the business plan – restarting the mine, putting our own plant there and increasing production – that evolved over the course of negotiations with the former owners. Initially, they were really looking for someone to put a little money in for a minority interest and help them with some financial issues. It didn’t interest me as a minority investment, but if we could take control, there was a chance to do something special. I saw the potential to get enough silver production from this mine to make it into a meaningful public company one day.

I was a sell-side equities analyst in the early 2000s and one of the first analysts to cover some of the important silver companies. To me, this opportunity reminded me a lot of those: start with a high-grade silver mine with low capex that you could put into production quickly and easily. Then, by bringing better access to capital through the public markets, you could grow production, reduce costs, do more exploration – all those good things we plan to do.

If you look at the genesis of First Majestic or go back even further to the first projects that Pan American acquired in Peru, these very big and successful multi-billion-dollar companies all started with a single high-grade silver project. That was the beginning of the journey.

Peru has a long history of mining. What is the plan for community support and sharing the benefits with the people who live in the region where Bethania is located?

Peru is a very diverse country with different communities and types of environment. We are in the high Andes in central Peru, so we are in an area that is very accustomed to mining. As a recently producing mine, there is already acceptance of Bethania and a culture within the local community to support it. The community that has jurisdiction over the mining area is Poroche, and we are still in the process of working out what the people want to see over the longer term. The community has been very helpful, and I think they believe in the benefits of having more activity in the area and would prefer that the mine be operating.

One noteworthy aspect of our relationship is that we were able to receive our environmental impact assessment approval for the new plant and tailings storage. In order to do that you essentially have to get approval from your local community before you submit your paperwork to the government. There are site visits and other aspects of a legislated process. So, you work with the local community and essentially earn its support before permits can be granted. I think that demonstrates we are on a strong footing.

Your other project is located in northeastern Ontario. It has some very nice silver numbers and some cobalt in the mix as well. What is your plan there?

There are two parts to that deal. There is a part where we are buying a section outright, which is the Kerr Project. It represents about 10% of the First Cobalt land package and is the most advanced part. It is where most of the historical drilling is.  We have most of the data, and most of the high-grade silver hits are in that area. We see that as the part we can potentially get into production first. The other 90% goes into a joint venture.

This means there are two strategies. With the Kerr Project, we are looking to follow up on historical high-grade silver intersections and look for extensions of some of the known mines. There have been more than 70 million ounces produced in the area we are buying. We would like to find potentially some new veins and get them into production, at a similar scale to what we are doing in Peru.

And that is the link for us from Peru to Ontario, that the history of the Cobalt Camp is this super high-grade mineralization mined at a small tonnage. We want to produce a lot of silver but not necessarily go through a lot of rock. And we feel we can do that in the Kerr area.

With the joint venture, the opportunity is to find another collection of veins. If you look at the whole camp, the 400 million or 500 million ounces produced historically from this part of northeastern Ontario is in clusters of 50 million to 100 million-plus ounces of silver. With the joint venture we want to find a new cluster.

Do you have any closing thoughts, perhaps something we’ve missed or a statement that encapsulates how investors should think about Kuya Silver?

I would highlight that we are very focused on restarting production and becoming a profitable silver mining company in Peru. But we also feel that we have exceptional exploration potential with our property there. In 2021 and beyond you’ll essentially see us on two parallel tracks: one will be mine development and getting into production, and the other will be drilling and working to find the resource that underlies production for another decade or more. And we think we can do that in the next year or two.

This story was featured in the Public Entrepreneur magazine.

Learn more about Kuya Silver
at https://www.kuyasilver.com/

CSE Issuer Stories, Magazine

Clarity Gold: Unearthing big value in overlooked projects

Founded in 2019 and publicly listed on the CSE in July 2020, Clarity Gold (CSE:CLAR) has the objective to acquire and develop gold projects that have been “overlooked or underfinanced.”

Headed by Chief Executive Officer James Rogers, Clarity’s management team has certainly proven its ability to identify, evaluate and execute transactions, having collectively completed over 100 resource project deals.

In November 2020, the company acquired an option on 100% of the Destiny Project, a gold project located in the prolific Abitibi Greenstone Belt, which extends from Wawa, Ontario to  Val-d’Or, Quebec.

In addition to Destiny, Clarity has three 100% owned projects on its books in British Columbia: Empirical, a gold, copper and molybdenum project located 12 kilometres south of Lillooet; Tyber, a gold, copper and silver project located 18 kilometres south of Parksville; and Gretna Green, a gold, copper and silver project located 24 kilometres southwest of Port Alberni.

Rogers spoke recently with Public Entrepreneur about his views on building a company in the resource sector and what the future holds for his industry and Clarity shareholders.

Let’s start by delving into Clarity Gold’s mission statement and your guiding principles. 

Clarity’s objective since inception has been pretty clear – we’ve been entirely focused on gold in North America, with an emphasis on Canada. Our mandate has been to become an explorer concentrated on discovering and building ounces in stable jurisdictions within North America. 

British Columbia was our starting point, and we’ve grown by establishing a strong foothold in Quebec with the Destiny Project. 

Destiny is a project you acquired in November and it is in the famous Abitibi Greenstone Belt. Tell us about your decision to obtain a 100% option on this project.

Destiny is an exciting gold project on a lesser-known structure in the belt. The Abitibi is an important jurisdiction in Canada, and in the world, really. It is one of the most prolific greenstone belts there is.

The Abitibi is comprised of six dominant structures. The 400-kilometre-long structure that the Destiny Project is located along is called the Chicobi. It is a less-explored structure that is proving to have gold mineralization associated with it, just like on the Cadillac and other well-known structures through the Abitibi. This is one of the reasons we were attracted to it. Dominant structures play an important part in controlling gold mineralization within the Abitibi.

When we look at the main structures in the south, they are largely near surface. Nobody really found the Destiny Project until 1998 because it has a thin veneer of overburden and till – it is just not on surface.

It started in 1998, which kicked off multiple campaigns totalling over 50,000 metres of drilling, culminating in a historic resource in 2011. And it has basically lain dormant since 2012. Our mandate is to take a fresh look at this, peeling back the previous data and thinking more about this project’s optionality as a high-grade, structurally controlled gold deposit. 

You also have three projects in British Columbia. How do these fit into your near-term plan?

We started with Empirical, which was our flagship project in British Columbia. We then acquired two more grassroots projects in the province. My background is in project generation and one of my strengths is keeping an eye open for new opportunities and projects. When our team saw Destiny, we recognized the opportunity for a more advanced project to create value in a jurisdiction that we’re comfortable working in and understand really well. We see the best opportunity to create near-term value for the company in advancing Destiny, but will continue to maintain and advance the rest of our portfolio.

How are you funded to move forward with the planned work following your recent private placement? 

We just finished a $4.5 million financing. The next step for us is two-fold. We are financed to carry out exploration to advance Destiny but are also on the lookout for more projects with a similar profile where we could add value with our expertise. Destiny is a foothold – it is really our first step into a large gold camp where we have experience operating. 

You have somewhat of a different background than the typical junior company CEO in that you run a large services company for the industry as well. What do you consider is your main strength as head of Clarity Gold? 

I’d say looking at data and coming up with an idea. A cool stat is during the hunt for Destiny, I compiled 200,000 drill holes in Quebec and Ontario inside of the Abitibi and started thinking a bit about why the Chicobi structure just hadn’t been looked at the same as the others and why this is an important and underexplored part of the Abitibi story. 

Bear in mind, the Abitibi has produced more than 180 million ounces of gold, which is an incredible number. It’s actually hard to keep track of the number of headframes you pass as you drive from Val-d’Or to Timmins. One of my strengths is definitely looking at data but also in executing. 

I come from an exploration background, running a services company where our specialty is grassroots exploration and running drill programs, up to say 70,000 to 100,000 metres of drilling in a year. But when we get in and take a look at data, and we’re able to manipulate and think about things differently, that’s where we find things that get exciting. Where things have been overlooked or interpreted in a different way. Then we’re able to bring a fresh perspective to something and bring it to life. 

Let’s finish up with a look at what investors should expect from Clarity in 2021.

This year is going to be big. It will include our maiden drill program on Destiny, which should be kicking off before winter’s end. We’ll start with about a 10,000-metre program, which will then carry on into subsequent drilling as we get results and continue to move it forward.

This story was featured in the Public Entrepreneur magazine.

Learn more about Clarity Gold
at https://claritygoldcorp.com/

CSE Issuer Stories, Magazine

Red Light Holland: Proving the potential of recreational psilocybin begins with choosing the right market

One of the more interesting small-cap market developments of 2020 is increasing investor comfort with the psychedelics industry.

The year has seen multiple psychedelics companies IPO on exchanges in Canada and the US, and M&A activity is ramping up, too. Momentum in the sector is being driven by legislation in Canada opening the door for end-of-life patients to use psychedelics as a therapeutic option, while in the US, the Food and Drug Administration designated psilocybin as a “breakthrough treatment” for mental health disorders. The industry clearly has plenty of runway heading into next year.

Most of the publicly listed companies in the segment focus on therapeutic applications, working on research and development of psychedelic-based treatments for mood and anxiety disorders.

Canada’s Red Light Holland (CSE:TRIP), however, has found its niche in the recreational part of the market by selling small doses of psilocybin to adult consumers seeking to experience the psychedelic effect without a prescription. In the process, it has set itself on a clear path to revenue, which is an immediate point of differentiation compared to most peers.

The Toronto-based firm is the first publicly traded company that has a legal psilocybin product on store shelves and online (in the Netherlands). Its iMicrodose pack is a collection of “magic truffles” – a type of fungi that contains a lower concentration of psilocybin than their mushroom brethren but still enough to produce a psychedelic experience.

While making very clear that medical claims cannot be made at this point and highlighting that substantial research is still being done to prove certain beliefs, Chief Executive Officer Todd Shapiro tells Public Entrepreneur that he thinks psilocybin has the potential to “change the world” for people suffering from depression and mental health disorders. “For me, the opportunity was never about a trend,” Shapiro explains during a recent interview. “It’s about making a difference with a long-term plan. And it’s about empathy, compassion and providing access.”

Shapiro, a former Toronto media personality, began to explore the world of psilocybin through conversations with guests on his SiriusXM radio program. Sensing opportunity, he assembled a team of investors and advisors containing some truly boldface names: Bruce Linton, Terry Booth, Brad Lamb and even comedian Russell Peters, who serves as the brand’s chief creative officer.

The group decided to explore the opportunity to sell psilocybin as a recreational product in a legal market and settled on selling truffles in the Netherlands. It raised nearly $4 million before going public on the CSE in May 2020.

At this point, it’s fair to ask – aren’t magic mushrooms illegal? The answer lies in the composition of the fungi. In the Netherlands, where iMicrodose recently debuted in smartshops across the country, magic mushrooms themselves are illegal, but truffles – a network of interconnected filaments that branch out from the mushroom below ground – are legal to buy and consume.

The pursuit of the recreational market as opposed to medicinal psilocybin is a huge part of what differentiates Red Light Holland. “We would love to be a part of helping to prove how psilocybin can help human beings, be it supporting studies or trials,” Shapiro says. “I think that the medical side is extraordinarily important, but why are we limiting the potential of responsible adult use? When we do that, we are limiting a lot of adults who have access to information, education and early trial data as well as anecdotal research. I don’t think we should do that for people who want to try this responsibly.”

Echoes of the cannabis sector’s growth trajectory ring through Red Light Holland’s story. Early acceptance of medicinal marijuana paved the way for the recreational market and, eventually, legalization. Shapiro is hoping that Red Light Holland can blaze a path to tolerance of recreational psilocybin. “Magic mushrooms have been used for generations for a wide variety of purposes,” Shapiro notes. “Red Light Holland wants to offer it to people who want it in legal jurisdictions, much like we saw in the cannabis market.”

That’s not to say that the company isn’t exploring possible therapeutic applications as well. Its scientific division, Scarlette Lillie Science and Innovation, recently secured a relationship with US-based Jinfiniti Precision Medicine to explore potential roles that psilocybin and truffles can play for age-related and psychiatric disorders.

Red Light Holland may not take the lead on clinical trials, but it wants to carefully look into how it can support the science by perhaps teaming up with people who could potentially get involved in trials in some capacity. “If we can learn more about the truffle itself, that would be our goal,” Shapiro says. “Maybe there’s a CBD-like element to the truffle that we don’t know about yet.” 

The therapeutic psilocybin market is poised to reach a value of nearly US$6.7 billion by 2027, according to Data Bridge Market Research, making it an attractive proposition for investors. While the recreational market is obviously much smaller in value, Shapiro hopes to find a new consumer – a young professional, a firefighter or a modern couple who just put their kids to bed.

“I want iMicrodose packs powered by Red Light Holland to be consumed by the Ketel One drinker, someone who loves a glass of wine, essentially an adult who wouldn’t necessarily walk into a smartshop but would rather order legally from an easy-to-use e-commerce store. I want to help expand the market,” says Shapiro.

There are signs that other countries will soon follow the Dutch lead of legalizing truffles, or at least relax the relevant laws. In Brazil there are no laws against the sale, distribution or use of magic mushrooms. Jamaica has long been a destination of choice for psychedelic retreats, and Bulgaria is on the radar. For now, though, Shapiro appears to have Red Light Holland firmly focused on its namesake country.

“A lot of the issues at cannabis companies came about because they thought there was a bigger market than there actually was, and then they wound up expanding too quickly,” Shapiro says. “We like the idea of learning who our customers are and expanding from there with education, information and responsible use initiatives.”

iMicrodose debuted in Amsterdam in September, retailing for €25 per pack. Distribution quickly spread to Rotterdam, Eindhoven and Den Bosch, as well as online. Shapiro and his team hope to have iMicrodose in as many smartshops as possible over the next year while growing brand recognition.

Red Light Holland is blazing a trail in the psychedelics sector as the first psychedelics company with a legally available product to list on a major exchange, and it fills Shapiro with pride.

“It helps legitimize what so many pioneers and advocates have pushed for, because we’ve gone through the regulatory bodies,” he says. “It’s not something that we’re doing underground. If you’re in the Netherlands, you can order iMicrodose packs online right now. Let’s end the stigma together.”

This story was featured in the Public Entrepreneur magazine.

Learn more about Red Light Holland
at https://redlighttruffles.com/

CSE Issuer Stories, Magazine

Jushi Holdings: Timing is everything, and this expert cannabis team knows just when to pounce

Jim Cacioppo and his team at Jushi Holdings (CSE:JUSH) definitely know the meaning of patience, as they exercised plenty of it before setting up a new company to enter the legal cannabis industry. They watched as executives of all shapes and sizes rushed in during the early days of regulatory change, some quickly enjoying success, and others ending up on the ropes after making an endless trail of mistakes. The future Jushi management circle gathered know-how and bided their time.

That discipline is paying off hugely now.

Jushi is a multistate cannabis and hemp operator, and while the company may only have been founded in 2018, it is already gaining solid traction in its target markets and is exceedingly well positioned for long-term growth.

Cannabis is a complex industry in which most companies contend with a wide variety of regulatory environments. That’s especially true in the United States, given the patchwork of state-by-state regulations across the country. 

But to the Jushi team, the size of the pie available for successful operators to share in the United States makes the regulatory navigation worth it. “Everything else pales in comparison to the size of the US,” says Cacioppo, Jushi’s ambitious Chief Executive Officer, who is convinced the company’s strategy will make it one of the top global cannabis players within just a few years.

Cacioppo was a successful early investor in the cannabis space and became an expert in identifying distressed assets through his work in private equity. He saw what he calls a “gaping” opportunity to create a great company that had the right mix of management, financial resources and skills.

Cacioppo teamed up with fellow financial and cannabis industry hands Erich Mauff, Jon Barack and Denis Arsenault to prove his point. The combination of their personal networks, business experience and some early cash from their own pockets got Jushi off to a good start. It is now a vertically integrated cannabis juggernaut, operating in several US states, with cultivation, processing and retail assets under its corporate umbrella.

“Most people who win licences don’t have money, don’t have sophistication, don’t have the resources or the skills to operate these kinds of ventures,” explains Cacioppo, who says the sector is still littered with distressed players, even after the cull of recent years. “They just won licences, so they’re undercapitalized from day one.

“You could see the trends in our favour: the scale, the lack of good management teams and the opportunity to purchase companies rather inexpensively,” continues Cacioppo about the industry’s early days.

Jushi cleverly set about buying assets and licences where there were barriers to entry. It targeted growing, populated areas, with limited-licence medical markets and/or where legalized adult use had yet to arrive.

The team added to its depth in June 2019 with the acquisition of The Clinic, a Colorado business that brought new and proprietary information on cannabis cultivation, extraction and brand development. 

The group now has over 70 product formulations under its Lab brand, as well as a new line of hemp-based CBD products called Nira. Its 11 cannabis dispensaries all feature Jushi’s BEYOND / HELLO brand above the door.

Jushi has three core markets: Virginia, with a limited medical licence; Pennsylvania, Jushi’s largest market and home to a well-established medical cannabis environment; plus Illinois and its strong adult-use market. Illinois and Pennsylvania are expected to account for 77% of group revenue in 2021.

In three other markets, Jushi has established operations and is looking to scale up. These are Ohio (developing a medical program), Nevada (large adult-use market) and California. The last of these, of course, is the biggest cannabis market in the US and also home to a long list of very distressed assets.

In Illinois, Jushi aims to double the number of retail outlets it operates to four by early Q1 2021. Experts say the state’s adult-use market is growing rapidly and could reach US$3 billion in value.

In Pennsylvania, which could account for up to US$110 million in revenue in 2021, the aim is to grow its dispensary count to 15, from eight at present, with the already increased capacity at its 90,000-square-foot facility for cultivation and processing.

Virginia, where Jushi is one of only two public companies licensed to operate, will be the jurisdiction of highest growth in percentage terms, as Jushi currently does not have any stores there but is planning to build six.

“We have three great states that give us growth in-house for several years, so we don’t need to do any acquisitions, and we have the capital to build up the businesses,” says Cacioppo. The company closed a $30 million financing in the latter part of October, adding to a cash balance that was already around the $50 million mark.

COVID-19 has brought challenges, of course, including the adoption of strict social distancing rules.

On the other hand, the cannabis sector was declared an essential service, and Cacioppo believes there have been other positives, such as increasing demand, an influx of new consumers, and a newfound respect and validation for the cannabis industry.

A quick look at Jushi’s financials shows how well things are working.

Preliminary third-quarter results announced in early October contained expectations for revenue of $24 million, which would be 61% above the prior quarter, while fourth-quarter revenue is anticipated at the high end of the previously announced range of $25 million to $30 million. Jushi also expects to report positive adjusted EBITDA in the fourth quarter.

Forecast revenue for 2021 has been revised upward to between $205 million and $255 million, from $200 million to $250 million, while adjusted EBITDA is expected to be between $40 million and $50 million.

Beacon Securities recently initiated coverage of Jushi with a buy rating, describing the company as a “hidden gem.” 

Its analysts noted that both New Jersey and Arizona were set to vote on adult-use legalization measures, with the New Jersey vote in particular holding the potential to have a domino effect on other markets, including New York, Pennsylvania and Connecticut.

“Illinois has seen legal-market cannabis sales quadruple to a $1.2 billion annualized run rate after its adult-use market opened in January. Pennsylvania may be one of the ‘dominos’ that falls if neighboring New Jersey approves adult-use legalization next month,” notes Beacon.

With Jushi shares having traded as high as 300% above their March 2020 lows, the patient work of Cacioppo and his Jushi teammates is clearly being recognized. And with more positive regulatory change on the horizon in the United States, Jushi seems to be in that sweet spot with the right strategy at the right time.

This story was featured in the Public Entrepreneur magazine.

Learn more about Jushi Holdings Inc.
at https://jushico.com/