1. Why cannabis extraction and why now?
Canada’s cannabis market is currently dominated by dried flower products, with only an estimated 13% market share held by extract products. If the last phase of the cannabis market was all about production and distribution, this phase will be dominated by technology. Many new products such as edibles, beverages and topicals are now for sale legally in Canada.
2. What is CO2 Extraction?
Carbon dioxide (CO2) extraction is a relatively new process used to extract the essence of the cannabis plant (Full Spectrum). When a certain amount of pressure is applied to CO2, this gas turns into liquid. This liquid CO2 can be used as a very inert, safe, “liquid solvent” to extract oils form the cannabis biomass.
3. Where is Pure Extract’s facility located?
Pure Extracts’ main facility and operations is located in Pemberton, British Columbia just north of Whistler.
4. Is Pure Extracts licensed?
We are anticipating approval for our Standard Processing License in Q4, 2019.
5. Is Pure Extracts facility EU-GMP certified?
With growth in mind and phase 1 expansion underway, Pure Extracts is currently building its facility to meet EU-GMP standards. This will allow the company to distribute product overseas.
6. Where does Pure Extracts get its biomass from?
Pure Extracts is in the process of signing several LOIs with licensed producers to procure biomass on a contractual basis. The other part of the strategy is to use our cash on hand to make spot purchases and take advantage of lower prices. There is an abundance of biomass available as the licensed producers often produce low quality cannabis that is difficult for them to sell. Turning it into oil is the obvious way for them to monetize their production.
7. Will Pure Extracts do any tolling or white labeling work?
Pure Extract’s business model will consist of three verticals: it’s in-house brands, toll processing, and white labelling. Within the contracts that Pure Extracts is currently negotiating for supply, there are toll processing and white labelling components as well. We expect the majority of the business from the onset to be from tolling and white labelling, with the product mix shifting towards our in-house brands as we increase our distribution.
8. What is Pure Extracts distribution strategy?
The distribution for recreational cannabis in Canada is largely handled by the government. They buy from the producers and manufacturers and sell them to the dispensaries. Thus, the strategy is two-fold. One, use a push marketing strategy to sell the product to the government. Two, use a pull marketing strategy to get the dispensaries to request and buy our product from the government, which feeds into our push strategy in a feedback loop.