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VIDEO: Maricann Group Inc (CNSX:MARI) CEO on Leading Product Development in European Market

Thursday, July 12, 2018 10:36
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Maricann Group CEO Ben Ward mari

Maricann Group Inc (CNSX:MARI) (OTCMKTS:MRRCF) (FRA:75M) CEO Ben Ward discusses their consecutive provincial supply agreements in preparation for October 17, 2018 to provide cannabis across Canada. To handle Maricann’s expanding supply chain, the company have hired sales and marketing experts from Diageo plc, a company entrenched in the global liquor distribution infrastructure working with brands such as Smirnoff, Captain Morgan, Johnnie Walker, Baileys and Guinness to name a few. The CEO also elaborates on the expansion of their Canadian production facility and the significance of acquiring a licence in Malta for expanding their product lines in the European market.


James West:    Welcome back to Midas Letter Live. My guest in this segment is Ben Ward. He’s the CEO of MariCann Group Inc., trading on the CSE under the symbol MARI. I’ve got him live here via Skype. Ben, thanks for joining me today.

Ben Ward: Thanks, glad to be here, James.

James West:    All right, Ben, let’s start off the conversation: tell me about your agreement with the Alberta Gaming, Liquor and Cannabis Supply.

Ben Ward: It’s a great agreement for us. For the first six months, 3,375 kilograms. I think we punch well above our weight in gaining solid contracts in Alberta, and I think it speaks to the quality of the product and the brands that we’ve developed, and there’s demand for our product for the recreational market. So the team that we brought in from Diageo has been working very well with all of the provinces, expect a lot more from us. And we have an opportunity to restock that order and then to increase quantities for next year with Alberta.

James West:    Is that 3,375 kilograms, is that a take or pay arrangement, and if so, what’s the price per kilogram they’re going to give you?

Ben Ward: It’s, we’re not allowed to disclose price, but it is competitive with the market, and I wouldn’t say it’s a take or pay. They’ll restock as necessary, just like you have in the alcohol market; you have churn of product, and it’s a matter of how much product is on the shelf. So we’re confident in our ability to move that amount of product through in the first six months of rec, and then to add to that in the future.

James West:    Okay. So you said that they are, you’re not allowed to disclose price, but it’s competitive. Are we to infer from that, that all of the suppliers to the Alberta Gaming Liquor Cannabis Board are basically being paid the same per kilogram?

Ben Ward: It’s all based on sku, so you can submit your sku list and submit the products, and I don’t think there’s any real lowball groups in there; the site visits and things the provincial suppliers have done. They’re looking for quality and supply, so I think that yeah, if you’re looking at the pricing, I think that everyone is competitive, but mainly it’s based on your ability to supply quality product to the market.

James West:    You said that you’d brought in a group from Diageo – I don’t know whether I missed the press release – can you outline who you’re talking about exactly, there? What’s the nature of that relationship?

Ben Ward: Yeah, our now-VP of sales and marketing was the head of marketing at Diageo, and then we brought in our sales director, who was also the sales director for Western Canada at Diageo. So we have a group that’s experienced in working with the liquor boards, understands what they’re looking for, the supply chain management agreements that are supposed to be put in place, and essentially, they speak their language. So, great relationships that are already existing, talented, and understands the requirements for not only supply and initial listing agreement, but then also for delivering the product and then churning the product on the shelf.

So it was a great addition to our team, bringing in Geoff Kosar, who was the head of marketing at Diageo, and then Sanjay Patel, who was the sales director for Western Canada, and then some more individuals as well.

James West:    Yeah, okay, so for the audience members who might not know, Diageo is the company that owns the brand and distribution for brands like Ron Bacardi and Tanqueray gin and Captain Morgan rum and Don Julio tequila, and among the whiskeys, Johnnie Walker, Crown Royal, Seagram’s…and there’s all kinds of others. Oh, Talisker, Lagavulin, Oban, Baileys and Guinness, oh my goodness. So, to say that they are well entrenched in the global liquor distribution infrastructure is the understatement of all understatements.

Ben Ward: Yeah, it really is. These people have world-class talent and experience, and they were looking to move out of the alcohol world into the cannabis world, and we had attracted them to become members of the MariCann team. So their background is with Diageo and other groups, and we brought them in because we saw this is where the market is moving, and you need the same groups that understand the alcohol distribution world. So they are happily employees of MariCann now, and we’re thrilled to have them on board.

James West:    Yeah, you bet. Okay, so, update us a bit – you put out a corporate update on July 5th, you’ve got your Langton facility, expecting to turn out 706 kilograms per week at Langton – is that Langton, Ontario?

Ben Ward: Yeah, that’s our main production facility in Langton, Ontario, and our expansion is going well. The first area is now licensed, and by November 15th of this year, we’ll have 706 kilos coming off of the line every week in a perpetual grow, perpetual harvest model. So with Phase 2 that we’re building out, that’ll be ready and commissioned, if all goes well, as of February 1st next year, and we’re looking to have that product online, which is an incremental additional 1,412 kilos every week coming off the line for a total production of 2,118 kilos per week coming off the line. So our expansion is going extremely well, product is moving ahead, and we’re looking to be able to have significant capacity online to be able to supply all these agreements.

James West:    Wow. And in your German operations update, you’ve completed retrofit of 49,000 square feet at Ebersbach? And that’s for importing cannabis from Canada to be repackaged and sold into the German market?

Ben Ward: Yeah, that’s exactly what it is. It’s our own import and distribution license. Aurora made the acquisition of Pedanios, which turned out to be a great move for them; they’re distributing product now in pharmacies in Germany and a few other locations in Europe. They paid a lot for that acquisition; we essentially retrofitted 50,000 square feet of our facility, and we hired the individuals who have the capacity and ability to gain the license that we need, which is for narcotics import wholesale.

So we brought those people in, retrofitted the facility, and we’ll have a start later this year on importing our own product and distributing it within Germany. And we have a relationship with a distributor there to be able to move the product, so sometimes it’s more beneficial to be the second mouse, because the second mouse gets the cheese. So in this case, we think we’ll be successful in building out the German market through our own efforts and not having to make an acquisition at that point.

James West:    Yeah. And the Malta thing is really intriguing to me, because Malta is, you know, essentially, in terms of the size of the country it’s microscopic relative to the rest of Europe. So what is the significance of the Malta deal?

Ben Ward: You have to look at Malta as being the most regulatorily advanced framework in the world. In Canada we create cannabis flower, we can now in the rec market create pre-rolls, other types of things like that; we can make our own THC distillate, which we do, but it’s for research purposes.

In Malta, we’re able to take cannabis flower, extract that, and then really make the building blocks of all cannabis products, which are made from isolates or distillate of product. So we can fractionate, we can make pure THC, CBD, CBN, CBG…then we can combine that with our Vesisorb drug deliver technology, really deliver quality products that physicians – because Europe is a medical market – understand. Dosage regulated, that have greater absorption. So Malta is really fast-forward to five years down the road for what Canada may be from a regulatory framework, but we can do that now.

So, taking products from Canada, exporting those to Malta, doing all of the extraction, distillation, isolation, finished dose manufacturing, and then opening up those products for the rest of the world into Germany, into Switzerland, and then into the rest of the E-U.

James West:    Wow. That’s intriguing. So it gives you a chance to sort of get a lead on advanced product development for the European market?

Ben Ward: Yeah. We have all the products that are ready and available with Vesisorb, our partner, and then being able to actually make them is the big plus, without having to move through further regulatory hurdles. So it’s moving ahead what we believe Canada will look like, whether it’s one year, two years, or five years from now, but doing it in a full E-U member state and then being able to move those products to the European market.

James West:    Sure. Ben, I have to say that, you know, I talk to all CEOs in all companies that are – all the ones that matter, anyways – and, you know, the rate of development within MariCann, especially in this last quarter so far, has really been, you know, impressive and surprising. I’m wondering, in your interpretation, why do you think the share price has sort of languished and just sort of drifted sideways over the last two or three months?

Ben Ward: I think there’s just still some overhang from what happened in February. The company is fine; the company has moved ahead. We’ve executed on our business plan and made further additions. So we think that once the market understands what we’re doing, and you’re an integral part of that, helping to deliver the message of what MariCann is doing, we think there’ll be response coming in again. It wasn’t catastrophic event for the business, although it was for the share price, what happened in February. But the company is executing, the company is moving ahead, and as I mentioned earlier, we’re punching well above the perception of MariCann’s place in the market, and we’re delivering on contracts in the rec space and on our commitments overseas. So I think it’s just a matter of time until the market comes back or until new investors take notice of what MariCann is doing.

James West:    Well, sounds like you’re doing a great job, Ben. Thanks very much for the update. We’ll come back to you soon.

Ben Ward: Great. Thanks a lot for your time, James.

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Original article: VIDEO: Maricann Group Inc (CNSX:MARI) CEO on Leading Product Development in European Market

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