Emblem Corp. Issues President’s Letter to Shareholders
21 March 2018 - 7:30AM
Emblem Corp. (TSXV:EMC) (EMC.WT)
("
Emblem" or the
"
Corporation") provides a Letter to its
Shareholders as follows:
Spring is upon us, and Emblem is ready to
bloom.
Having just completed my first quarter as your
new President and CEO of Emblem Corp., I
would like to start by thanking the many groups who have made this
exciting evolution of our company possible. The incredible support
of our shareholder base and the significant efforts of our
world-class management team have allowed us to quickly pivot our
approach. This strategy strengthens our current position as a
leading medical cannabis company, while creating a brand-leading
division launch within the burgeoning adult-use market, slated to
begin in Q3 2018.
With the two financing transactions Emblem
successfully completed in the last 120 days our balance sheet is
incredibly strong, with close to $85M available to support our
growth plans. This financial strength allows us to complete
construction of two, state-of-the-art cultivation and manufacturing
facilities in Paris, ON, as well as seek out opportunities for
further cultivation expansion. In addition, we will be making
strategic investments in R&D, clinical research, marketing and
promotion, product development and licensing. Each of these
endeavors collectively allows Emblem to maintain its leadership
position within the medical side, as well as poises us for a unique
and competitive advantage in the adult-use space. Our team has been
very active in pursuing these opportunities and we look forward to
sharing some exciting announcements in the coming weeks.
The focus over the last 120-days has been that
of assembling a world-class executive leadership team. I’m
pleased to announce that we’ve made a number of significant hires
across our finance, marketing and operations groups that will all
play critical roles in propelling Emblem to the next level.
We have restructured our organization around our three key
disciplines: Medical under the continued
leadership of John Stewart, Operations under the
leadership of Danny Saperia, and Adult-use under
the leadership of our new Chief Marketing Officer (to be
announced).
Emblem is making stellar progress with two key
construction projects in Paris, ON. Targeted for completion in late
Q3 is our 30,000 sq.ft. integrated building that includes a GMP
certified, state-of-the-art formulation and analytical laboratory.
This will greatly increase space available for extraction,
analytical, cannabis storage, R&D and formulation production
activities. Our analytical laboratory will escalate its scope
of activities, reducing reliance on external laboratories and
expediting analytical turnaround time to allow for more efficient
operations, while significantly reducing the company’s overall
costs for analytical services.
We are also making improvements to our existing
“closed-box” cultivation facility, with retro-fits to three grow
rooms nearly complete in order to provide greater environmental
control for our production team. In addition, we are assessing GMP
certification for the facility, which would allow us to
internationally export dried flower in addition to derivative
products. International expansion is a key focus for Emblem’s
growth strategy, and we have signed an LOI with a German pharmacy
group to supply dried flower to Germany and the EU, subject to GMP
compliance.
We have appointed Ellis Don as the construction
manager of our purpose-built 170,000 sq. ft. greenhouse, with
construction slated to begin within four to six weeks, contingent
on site-plan approval from the County of Brant. After the planned
completion date of Q1 2019, this new greenhouse is expected to
increase our annual capacity by an additional 15,000 kgs, bringing
our total funded capacity to 17,000 kgs.
Our Medical division entered
2018 with four different cannabis oils and a production capacity to
meet the anticipated market demand for these oils, while at the
same time developing additional oils with different cannabinoid
profiles. A second objective is to bring oral metered dose
spray formulations and oil-filled capsules to market in Q3, while
simultaneously advancing the development of additional novel dosage
forms of cannabinoids – in particular the sustained-release
formulations in partnership with Canntab.
In anticipation of the commercial availability
of the cannabis oils, a seven-person “pharma” salesforce was
established by our GrowWise division in late 2017. These
individuals are now presenting information on the oils to
independent physicians with appropriate patient rosters, as well as
to physicians in cannabis clinics. Over the first three months that
the cannabis oils have been on the market, their uptake has shown
rapid growth - to the point that they now represent approximately
30% of the company’s monthly sales total. As a result, we are
optimistic about both the immediate and future impacts the cannabis
oils and other dosage forms will have on sales. Health Canada’s
latest market data continues to reveal that dried flower sales
growth has been minimal over the last two quarters, while oil sales
have increased by approximately 35%. The availability of Emblem’s
proprietary cannabis oils also represents the appropriate time to
begin clinical research projects, demonstrating their efficacy in
the management of various conditions. We anticipate these trials to
be initiated in Q3. Emblem is also in discussion with potential
partners for development of transdermal cannabis patches, topical
cannabis creams, lotions and/or oils, vape pens and metered-dose
inhalers. Other potential partnerships include companies with
the capability to collaborate on the development of cannabis-based
oral thin strips and soft-gel cannabis capsules.
Our Adult-use division has made
great progress in an incredibly short period of time. We will
be entering the market with two specific brands, each targeting a
distinct segment; 1. Health and Wellness Enthusiasts, and 2. Casual
Users. To bring these brands to market, we have recently
hired the services of a multiple award-winning advertising agency,
No Fixed Address (NFA), as Emblem’s Agency of Record. We will enter
the market well in advance of legalization to start a groundswell
of demand and anticipation for our products once they are available
on shelf. The scope of services NFA will provide
include:
- Create and execute a national PR strategy to help Emblem Corp.
launch our adult-use recreational brand ahead of the proposed date
for legalization.
- Create and execute a series of experiential/activation
campaigns with Emblem’s adult-use recreational brands.
- Ultimately, create enough awareness that Emblem’s recreational
brands will be the first products that consumers try when the legal
market comes into effect.
At the same time, we are actively pursuing
supplier agreements with the highest growth provinces for our
adult-use products and brands. We are confident about the direction
of these discussions and anticipate that our products and brands
will achieve premium positioning within stores.
Additionally, we are pursuing supplier
agreements with private retail (both recreational and pharmacy) and
strategic partnerships with value-add products, recognizing that
the adult-use market will also be comprised of dosage forms and
products other than dried flower (e.g. vape pens, concentrates,
edibles). On behalf of the Emblem leadership team, we appreciate
your continued confidence and support. We have a busy, yet exciting
year ahead of us. And we are unwaveringly committed to making
Emblem one of Canada’s top-performing LP’s for all of our
shareholders.
Nick Dean, President & CEO Emblem
Corp.
For further information contact:
Ali MahdaviEmblem Corp.(416)
962-3300alimahdavi@emblemcorp.com
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