Eve & Co Inc (CVE:EVE) CEO on Conversion of Remaining Convertible Debentures

Eve & Co Inc (CVE:EVE) (OTCMKTS:EEVVF) CEO Melinda Rombouts explains why the company’s female-focus presents investors with a unique value proposition. Rombouts believes for a company to truly address what women cannabis consumers want, female leadership is required. With women making up just 7 percent of leadership positions in the cannabis industry, Eve & Co has a strategic advantage over its competitors. Rombouts shares construction details of the company’s progress on the 780,000 square foot expansion of its production facility in Middlesex County, near London. Eve & Co recently announced the conversion of its remaining convertible debentures. The move ensures Eve & Co’s Phase 2 expansion is fully funded and strengthens the company’s balance sheet.

Transcript:

Narrator: Eve & Co is a Canadian-based, female-focused cannabis brand. The company is a licensed producer and seller of dried cannabis and cannabis plants through its wholly owned subsidiary, Natural Medco, Ltd. Eve & Co has a 220,000 square foot greenhouse production facility located in Middlesex County, Ontario, with 32 acres of adjacent land for future expansion.

Eve & Co has commenced construction of an additional 780,000 square foot proposed expansion, bringing the company’s total anticipated greenhouse capacity to 1 million square feet.

Eve & Co’s shares are listed on the TSX Venture under the symbol EVE.

James West:   Hey, and guess who’s joining me now? It’s Melissa Rombouts is in the house. She’s the CEO of Eve & Co, trading on the TSX Venture under the symbol EVE. Melissa – Melinda, welcome to the show.

Melinda Rombouts:  That’s okay, I get that all the time. [laughter]

James West:   I got your last name right, finally, but not your first name. It’s great to have you on the show finally, although I understand you’ve been here before with the Follow the Money group.

Melinda Rombouts:  A few times, yeah. I mean, these guys have always been very good to me, so I’m always happy to be here.

James West:   Excellent. Okay, so for my audience, assuming there is a difference between the two of them. Tell me: what is the whole Eve value proposition for shareholders?

Melinda Rombouts:  Well, I guess there’s two major items. So there’s of course our female-oriented brand; so as one of the first female CEOs of a licensed producer, you know, we sat down, we figured out what do women want, actually, from their cannabis. It is 50 percent of the consumers, so, you know, I think we bring an authentic attitude to addressing that.

The other side of it is, of course, our global expansion. So we are working very hard, and are working with a number of companies, to get our product exported into Germany and the EU. So we’re very excited about that; there’s a lot of possibilities there.

James West:   Cool. And in the preamble we saw that you’re building a massive structure. And is that structure going to be sort of an EU GMP-certified production facility?

Melinda Rombouts:  Part of it. So our understanding is, we might not necessarily have to do it all, but certain rooms will need to be done. So yeah, that’s – I actually was just really impressed with the drone video, never saw it from that angle before, so I’m really happy with that.

James West:   Looks great on a big screen, doesn’t it?

Melinda Rombouts:  It does, it does! I really like it. So 780,000 square feet, so this was taken a few weeks ago. So the roof is really coming on nicely. So the main structure actually should be up by next month, the end of next month, and then of course they’re going to do a bunch of inside work, and we should have it done and completed in June. So we’re really excited – we’re very close.

James West:   Yeah, really. Okay, so that’s in Middlesex County. Where exactly is that in Ontario? I don’t know.

Melinda Rombouts:  So we’re about half an hour from London, kind of between Sarnia and London.

James West:   Oh, very cool, very local.

Melinda Rombouts:  Yeah, kind of like the secondary greenhouse capital, next to Leamington, of course. So WeedMD is our neighbour.

James West:   Right, interesting. That’s great! Okay, so let’s talk about this whole idea of women in cannabis. I just was down in Los Angeles; one of my co-hosts on my show for the day was Alison Gordon, the CEO of 48North.

Melinda Rombouts:  Yes.

James West:   She received an award at the High Times Women in Cannabis event. Were you at that event?

Melinda Rombouts:  No. No, I didn’t attend that at all.

James West:   So it’s interesting to me, I mean, in many respects, you know – and I’m hoping I don’t come across sounding like some sexist jerk, but to me it’s like I don’t understand why there’s a woman in cannabis differentiator, because to me it’s just like, well, it’s cannabis. Yes, we’re smoking a female plant, preferably, but that’s where the whole sex element ends in terms of gender in the business. But why is there demand for feminine-themed companies?

Melinda Rombouts:  Well, I think if you – I think you’ve got to start from the beginning, here. When I applied, when Jeannette, also from 48North, and I first got in – so we were number 34, Jeannette was, you know, days after us – there was only 4 percent women in the industry on licensed producer Boards, and then, right now I think there was an article last week where we’re up to a whole 7 percent. So it’s not, it’s not really correcting really quickly.

But I think if you really want to address what women want, I don’t think that you can get the same result and really address those, without having some female leadership in that company. So I think that’s where we’re coming from. We’ve been working for a very long time about making the right partnerships; it’s really about the products that are going to come out in October of this year. So as you know, there’s three kind of divisions of additional products, so like your edibles, your topicals, and your extract products; and there’s many items from that that, you know, we’re very, very excited about.

You know, topicals, beauty creams, those are maybe – I think we’re better to release those items than maybe some of the male-dominated companies out there. But just because I think that we have that foresight, in really what women want. So I think that’s kind of a difference.

James West:   Cool. That’s a great answer. I think I skated through that one without any risk. [laughter] Okay, great. So now, tell me about the economics of your company. Like, how are you going to differentiate yourself in this whole sea of cannabis companies in Canada? I mean, obviously the feminine part is a big part of that, but what else in terms of the economic model might be different?

Melinda Rombouts:  I think because of our focus, really, on the global market. So we’ve been spending a lot of time – my background is actually not only as a grower, but also the quality assurance side. So I think that we’ve done really well connecting with the German market because of their elevated GMP requirements, so that I’m actually able to discuss that with them and figure out how we’re going to achieve those requirements, which is, of course, higher than what the Canadian industry standards are like.

So I think really for us, it’s about the female, it’s about the global expansion, but also we actually had a big announcement last week that one of the schedule banks are supporting us, so as far as the financial side, that’s been very exciting for us.

James West:   Yeah, right. So access to capital is no problem? Understatement of the year.

Melinda Rombouts:  [laughter] You know, but I think that that’s a huge change and kind of shift in the industry, is that, you know, we had BMO, now we have this other Schedule 1 bank that’s getting involved. You know, we’re very excited; that was kind of, we’re the first company that this bank is supporting. So very, we have just under $19 million in loans, so we’re very excited about that. So that basically allows us to be fully funded for this expansion and move ahead quickly, and really take advantage of a lot of the, you know, opportunities that arise almost on a daily basis.

James West:   Sure. So in a best-case scenario, this latest facility will start producing cannabis for supply to the market when?

Melinda Rombouts:  This fall, knock on wood. So of course, it always has to do with Health Canada approvals, so hopefully we can work with them and get it approved quickly.

James West:   Right. Is there is a difference in what strains or types of cannabis is preferred by women versus men?

Melinda Rombouts:  No, no, and that’s just it. Like, the female-oriented products are really going to come into play in October of this year. You know, we have looked at different strains that are maybe interesting, specifically for women; for example, THC-V instead of – cannabis tends to give you the munchies. THC-V actually inhibits the, suppresses the appetite. So you know, that might be of interest to, we’re always watching our figures. [laughter]

James West:   I wish more men would do that too, actually. We all have to ride the elevator together. [laughter] So what other sort of differentiating factors in the product are going to be of particular interest to women? You mentioned skin care; that makes sense, that’s an obvious one. Not really any difference in terms of the recreational effect or the psychotropic effect, but what other aspects, or what specific products might be available from among the cannabinoid pharmacopeia that would be of more interest to women than men?

Melinda Rombouts:  Well, say, for example, and we have to be very careful; as you know, there’s restrictions on what we can say that any kind of like therapeutic effects of marijuana. So, but, you know, there are some companies that are claiming that there’s anti-inflammatory, so that might have some positive effect in, say, an acne cream. Also, you know, some people claim that there’s an anti-wrinkle aspect to –

James West:   It is a miracle drug! Thank God!

Melinda Rombouts:  There is, you know, we’re looking at all the different possibilities. One thing that I’ve really liked that we hope to continue to work on is, you know, we’ve looked at a natural deodorant that has CBD in it, specifically for women who have had breast cancer. As you know, they’re very sensitive to chemicals and what they put on their body, and especially in such a sensitive area; so those are kind of the products that we look at and try to advance towards that can really address women.

James West:   Okay. So are you going to be selling your products primarily through the government-regulated stores in Canada, and then whatever the regime is in each of the sort of global destinations you have in mind? Or do you have an expectation that products that are more topical, more CBD-focused as opposed to THC, will eventually have an outlet in a sort of a sales channel that won’t be where you have to sell it in a government store?

Melinda Rombouts:  Right now, the regulations, I think, are pretty clear that CBD still must be processed on a licensed facility site, and I think that, I think Health Canada is going to regulate it for a while. I can’t see it going mainstream, totally legal, at this point; I guess it all depends on the level of THC in the product, but right now it looks like it’s really in the hands of the licensed producers.

James West:   And let me ask you this on a personal basis, because this is kind of a personal question: do you think that the regulations of the governing advertising of cannabis are fair relative to the rules governing, say, alcohol or other things?

Melinda Rombouts:  It’s very restrictive. Very restrictive. But I mean, good and bad. So on the good side, this is really, there’s much bigger companies than us, and this kind of makes a more level playing ground, right? We do not have a $30 million marketing budget where maybe some of the bigger guys do. So I mean, you can’t dress up your boxes at all, but what you can do is try to put your story out.

But on the other side, yes, if you wanted to, you know, actually show consumers the orientation of your product, we’re very restricted. There’s very little that we can do.

James West:   Right. So let’s say, for example, that I have a house full of women and they all want to try your product. How can they – they can’t try your product right now, or can they try prototypes?

Melinda Rombouts:  No, you can’t try prototypes, either. No, no, no.

James West:   It’s not like Avon, where it’s like, here’s a sample, and if you give out 10 to your friends I’ll give you a free bottle. Not like that, eh? [laughter]

Melinda Rombouts:  I like that marketing idea. I don’t think Health Canada’s going to go for it.

James West:   I’m going to call them up tomorrow. You guys really need to get on this! But that’s one of my sort of pet peeves, is it’s like, we got this alcohol, you know, Budweiser stage at Ontario Place, for example, but you do that with cannabis, you’re going to jail. Like, what the hell.

Anyways, okay, Melinda, it was great – that was a great introduction for me to your company. I’ve been excited about it since I first heard about it from Ravi, and so we’re going to continue to follow the story. Thanks for joining me today.

Melinda Rombouts:  Yes, thank you so much for having me.

Original article: Eve & Co Inc (CVE:EVE) CEO on Conversion of Remaining Convertible Debentures

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