North Bud Company (CNSX:NBUD) CEO on Outdoor Grow Operations and 2019 Plans

North Bud Company (CNSX:NBUD) CEO Ryan Brown provides an update on the company’s current projects and plans for 2019. North Bud is currently building its 25,000 square foot indoor production facility on 95 acres of agricultural land in Chelsea, Quebec. The company has amended its application to include 500,000 square feet of outdoor grow. Brown anticipates that once this facility is completed, North Bud will have an indoor production capacity of over 800,000 grams per year in addition to 12,000 kilos of low-cost, organic biomass anticipated from outdoor growing. This production footprint positions the company to compete in the boutique flower market as well as the edible and derivative space. North Bud is on track to both receive its Health Canada licenses and open its Chelsea facility by the end of Q1 2019. North Bud went public in the fall and while Brown admits the timing was not optimal due to macro market conditions, he believes the company represents a positive opportunity for investors.

Transcript:

James West:   Hey, Ryan, how are you doing?

Ryan Brown:   Not bad, James, how are you?

James West:   We’re doing great, thanks very much. Why don’t you give us a quick overview, what has North Bud got up its sleeve for 2019?

Ryan Brown:   Yeah, well as we disclosed before going public in late October/early November, building a 25,000 square foot indoor production facility, which we have recently amended our application to include 500,000 square feet of outdoor production. We’re located on 95 acres of agricultural land just north of Ottawa in the province of Quebec, and obviously seeing the developments and the maturation of the space, companies focusing on kind of a lower-cost facilities and quality biomass inputs, we made the decision to focus on strategizing for outdoor production as opposed to building additional greenhouse space, which we think gives us a very good, functional infrastructure moving forward that will allow us to cater to both the high end boutique flower market as well as the edible and derivative market with an all-organic, low-cost biomass.

James West:   Wow. So I’m looking at your chart right here on the NDI, and you know, it looks like the market’s not really aware of the opportunity inherent in all these developments in North Bud. Is that just a function of the fact that you guys kind of went public just before the whole market went soft and it just really hasn’t had a chance to hear the North Bud story yet because there’s all these other, bigger companies that are making so much noise?

Ryan Brown:   Yeah, and as a smaller company, unlike a lot of our, I guess our other junior companies in the space, we really wanted to focus on execution, achieving some milestones, before getting out into the public domain and really promoting what we’re doing. Obviously the way we went public, by spinning out an asset from an existing publicly traded company, Tetra Bio Pharma, did give us some eyes on the stock early in our listing, but we really wanted to focus on making sure that we can deliver on the promises that we set out to build an ultra-efficient, low cost but yet highly productive production facility.

I think that, you know, some transactions that have occurred recently in the space validate our market cap being significantly under comparative companies, both private and public deals that have been done, so we’re starting to ramp up, you know, ramp up our completion of our facility, onboarding operations staff, and obviously looking, like a lot of companies are doing, looking at potential M&A, whether that be a merger, an acquisition, looking to make use of our vehicle to bring more value into the company, but obviously taking a very slow, methodical and structured approach as we look at some of these deals, both domestically, internationally and in the US, etcetera.

James West:   Hmm. Very cool. So what specifically are you looking for internationally, just out of curiosity?

Ryan Brown:   Value.

James West:   Right!

Ryan Brown:   Which is obviously, myself personally, I mean, I’ve been investing in and researching the international space since early 2016, so I have been to Lesotho, I’ve been to the Caribbean, I’ve been to all the usual suspects, really, you know, taking stock of who’s doing what, where the valuations are, where they should be, and ultimately, what is the production capacity of some of these new countries that we see coming online. It’s great to have a license, it’s great to have a land lease, but ultimately, without a buyer, without a, you know, a loop towards revenue and an operating facility, you know, a lot of these deals are still a roll of the dice that a company of our size just isn’t ready to make yet. We’re looking to see some more deals that are kind of entrenched in real value propositions as opposed to arbitrary valuations, and we’re starting to see some of these come around now with some of these new countries that are coming online. So pretty excited to see what’ll unfold in the rest of the year.

James West:   Sure. How is revenue going to scale for North Bud with just the assets that you have now?

Ryan Brown:   I mean, ultimately, that’s going to be determined by the licensing process. We’re doing everything on our end, working with CCI, working with David Hyde, to make sure that the application is continually being updated as some of the goal posts continue to move from this transition from ACMPR to CTLS. Our goal to have our facility operational near the end of Q1 is still within reach, and obviously we’ll be ready to hit the ground running where we’ve got genetics lined up to bring in under the new Cannabis Act exemption that allows us to bring in genetics rom outside the existing system.

So in a perfect world, we should be licensed shortly after completion of the facility, and be able to ramp up revenue relatively quickly. The indoor production facility should yield us between 800,000 and a million grams a year, which we believe will be higher-end product, obviously, than focusing on, and for us, the real revenue generator being the organic outdoor crop that will likely be online for the planting season next year. Should yield us anywhere between 10 and 12 million grams per year, 10,000 and 12,000 kilos per year of low-cost organic biomass.

James West:   Fascinating.

Ryan Brown:   I’d put our revenue generating close to the end of 2019 into early 2020.

James West:   Oh, okay, cool. All right, Ryan, that’s a great update. We’re going to leave it there for now. Thanks very much for joining us today.

Ryan Brown:   Thanks a lot for having me.

James West:   We’ll talk to you soon. Thanks, bye.

Original article: North Bud Company (CNSX:NBUD) CEO on Outdoor Grow Operations and 2019 Plans

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