He was the CEO up until the appointment of Barry Fishman as CEO, and is the man responsible for taking this company public and shaping it into an emerging powerhouse in the cannabis sector.
He has accomplished a lot in a short amount of time as CEO of ABcann, including securing a $30 Million dollar deal with Cannabis Wheaton and going from RTO to $43 Million in cash in 3 months!
What’s interesting about Aaron are his multiple endeavours in a variety of sectors, hobbies and different roles in leadership.
He has a history of accomplishments in the capital markets, has financed and led the go public strategies on many other companies, including other LP’s. What we find intriguing is his knack for finding a way for his team or company to succeed.
In our conversation with Aaron, it sounds like he enjoys the process of winning and succeeding in a team environment, and loves the leadership role. He has also been succesful at the poker table, ran Ironmans and also played professional soccer, representing the Canadian National Team in his younger years.
Now he lives and breathes the capital markets and loves the Cannabis sector.
He is chairman of another publicly traded consumer brand that is trending towards $30 million in revenue, with a belief that it will be acquired in the future. He says he is really just getting started with the Cannabis sector and the opportunities will be endless for those that can deliver and continue to execute.
Here is what we uncovered with Aaron, we think you will enjoy the interview.
Thanks for your time, Aaron. That’s probably a precious commodity for you.
True, we’re always busy at ABcann. But this is a good conversation to have right now as we’ve just completed several rounds of successful financing. So we are fully funded for our plans to expand from 1,000 kg of product this year to 20,000 kg capacity in the future. We expect to reach our breakeven point this year.
We are in great place from a capital on hand standpoint with approximately $45m in cash and another $15m in committed capital from the Cannabis Wheaton transaction. This capital allows us to expand from 1,000 kg of product this year to 20,000 kg capacity in the near future. We expect to reach our breakeven point this year. And some of our longer-range international projects are really coming into focus now. They’re pretty exciting.
ABcann stands out as a young company that seemed to know exactly where it was going. You have exhibited a strong vision for your place in the market and the ability to guide the company straight to your targets. What’s your background that made you succeed?
First, I knew more about the business than many of the early entrants who thought getting into marijuana would be smart. As a managing partner in Inform Capital since 2008, I was one of the earliest investors in Canada’s new legal marijuana industry. I was involved in financing Organigram and served as a director of that company from 2010 to 2014. I joined ABcann Global’s board of directors in 2015 and I liked its potential so much I wanted to be a vital part of creating a strong household brand. With my venture capital and financial background, I was sure I could create strong shareholder value at ABcann. So, as the CEO of Panda Capital, I did the RTO to bring ABcann to market and stepped up to the CEO role at ABcann.
Second, I’m very competitive. I like to win.
ABcann is new to the stock market, but you profile like a well-established company. You have multiple products, your growing systems are tested, you have partnerships… How did you guide ABcann to that level so quickly?
We started early. ABcann was founded in 2014. That was two years before the current Access to Cannabis for Medical Purposes Regulations (ACMPR) came into effect. From the beginning, we were working with the University of Guelph’s Controlled Environment Systems Research Facility to understand how to produce cannabis for a consistent, pesticide free organically grown medical-grade product. I have just signed off to renew that relationship through next year.
We have also spent a good deal of time working with our board of science advisors, whose experience goes back a long ways. For instance, Dr. Ralph Mechoulam, an organic chemist from Israel, is credited with the discovery of THC in the 1960s and has long supported marijuana’s medical potential.
And of course, none of this would happen without the adequate money.
You were one of the earliest companies to get a license from Health Canada to grow medical marijuana?
That’s right. In fact, when our stock hit the market in May 2017, we had already been delivering a quality product to our first 60 test patients for nearly a full year. After six months of testing with those patients, in September 2016, we opened enrollments to new patients, and what we learned from our early group served us well.
Today, thanks to a lot of careful planning, testing, hard work, and rigorous attention to quality control, I can take pride in passing the keys to a fully loaded car off to our pharma and sales professionals. The company is extremely well capitalised through the process of helping ABcann get public. I believe the company is grossly undervalued compared to peers at this infant stage of its existence and look forward to being a contributing member to create more shareholder value as we continue to evolve.
How has that head start affected the company position in the market? Is it an advantage that holds up?
Yes. Those growing licenses are so hard to get, they represent a formidable barrier to entry. In addition to financial stability, security, and a viable business plan, the government looks very closely at the people involved. My stature as a successful entrepreneur and financier and industry analyst helped establish ABcann’s bona fides.
When we came to market, Health Canada had only approved 19 licenses from among more than 1,600 applications. They’re up to 52 now, but the market demand is growing faster. So, that has given those of us who got in early a huge advantage in establishing our positions. Now with the government likely to approve recreational marijuana as early as next year, demand will keep prices very healthy for years to come.
Those initial licenses are so hard to get, they represent a formidable barrier to entry. In addition to financial stability, security, and a viable business plan, the government looks very closely at the people involved.
Let’s look at this from an investor’s perspective. This is a capital-intense business to start up. You have a reputation for attracting money. How are you doing financially?
I take the lead on fundraising and I’m glad to say it has been very successful. We came to market in May with a reverse takeover. Within three months, we had a $100 million market capitalization and $43 million in cash. As a note of confidence, Cannabis Wheaton has committed to a $30 million equity investment in us and the first $15 million came in as cash at $2.25 a share. That's a significant premium to our share price, and I think that speaks to the quality and reputation ABcann carries in the industry today.
But it’s not the dollars, per se, that matter. It’s how we use them. We are in an amazing position for growth with that capital and we need to scale. The demand for premium, pesticide free organic producst remain at the forefront of patient wants, and I definitelh think this will translate into the same attractino for the consumers in the adult market.
Scaling our capacity is going to inevitable allow us to pursue a larger market share, increase sales and pursue other opportunities with growing brand recognition.
When you switched from being a marijuana investor to leading a company as CEO, what made you choose ABcann?
This is a question I’ve been getting the most these days, but is also the easiest to answer.
I walked into ABcann and as any analyst or astute investor who has been in the the facility will tell you,
There is no facility or growing technology in place right now that compares to ABcann’s
Now that comes with expectations, and it’s a smaller facility. But as we have been discussing, this is scaling time for ABcann and we have the capital.
So that’s why I chose the company, which came on the heels of visiting another company and they had a sopt inspection from Health Canada where they had a pesticide recall.
I didn’t want to go down the path of not having the fundamentals covered, which is growing cannabis.
How do you manage such consistent results and what does that mean for the company’s future?
Consistency starts with buying seed for certain strains, which every grower can do. Different strains of marijuana have different levels of cannabinoids like THC or CBD. One strain is ideal for patients undergoing chemo, another strain is better for epilepsy, and so on.
Our edge is that our growing system is meticulously controlled to adjust for each different strain at every point in its growth cycle. Everything from water, light, carbon dioxide, oxygen levels, and fertilizer is completely regulated, minute-by-minute around the clock. That means we get consistent cannabinoid levels every time. Plus, our plants are 100% organic.
Our team members even take air showers before entering the grow space to be sure they don’t bring contaminants in with them. With our ultra-clean system, our plants never develop mold or bacteria.
We are growing a crop worthy of pharmaceutical-grade applications. That is attracting attention around the world.
Well, the name is ABcann Global, isn’t it… what markets do you see beyond Canada?
Let's chat first about Canada, then other markets. The domestic market is growing, it's established and the Canadian companies who executed domestically are going to have such an advantage to grow globally.
For ABcann, we need to scale. We have one of the best growing methodologies which we have covered off. Now we are in construction mode.
We are aggressively expanding our capacity, we have the land available that we wholly own and we can build out over 1,000,000 square feet if we desire.
We don't need to relocate, we just need to execute, continue to build great product, build patiently and build consumer confidence and do this at scale. Once we do that on a consistent basis, we have the reputation to tackle all of the global markets, either alone or with the great partners that we are establishing. We can't comment too much, but we love the German markets and what this will do for all of Western Europe. For readers, I would stay tuned for additional news from ABcann as we look to expand into other countries, while expanding capacity back home.
Where do you think the Canadian MJ Market is going in the future?
With Canadian growers moving so fast into commercial production, the next opportunities will be expanding to international markets. Canada is among the very few countries that have a strong legal marijuana agricultural industry. Canada’s licensed producers with the best domestic reputations for quality consistency and capacity will be the winners in the new emerging markets. We are fully funded for growth. As demand explodes with full legalization, we are ready to step out in front of the pack. We expect ABcann to be successful in the global supply chain.