In June 2018, Canada made history by becoming the first G20 nation to announce a timeline to legalize recreational cannabis. Canadian Prime Minister Justin Trudeau announced that recreational cannabis will officially become legalized on October 17, 2018. The slight delay came at the request of certain provinces and territories that requested to have further time to develop its implementation plans. Make no mistake, the legalization announcement is about to exponentially expand the Canadian cannabis market.
According to New Frontier Data, the Canadian cannabis market is estimated to reach C$9.2 billion by 2025. Palisade Research sees the legal cannabis market hitting US$7.5 billion in sales by 2020.
“Canada is about to become the first G20 nation in the world to fully legalize cannabis and the implications are enormous. Combined, the Canadian medical and adult-use markets will rival that of California – which boasts the 6th largest overall economy internationally. Canadian usage rates in the medical market are higher on average than in the U.S. When the adult-use Canadian market opens the combined domestic and international opportunities will increase dramatically and create new momentum around the world,” details New Frontier Data Founder & CEO, Giadha Aguirre de Carcer.
As the global opinion towards cannabis continues to shift to a more open-minded focus, marijuana companies eye a massive opportunity that is reminiscent of the ending of alcohol prohibition within the United States in 1933.
Today there is a vibrant international alcohol and spirits market that has benefitted immensely throughout the decades. However, after decades of access and deep saturation, the alcohol market is largely a mature market that is not expected to see massive growth over the near-term.
Cannabis has the opportunity to be the “alcohol” of the modern era. Imagine being able to go back in time to right before the ending of Prohibition. Where would you be allocating your capital?
As the cannabis movement continues to take hold, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is one undervalued Canadian marijuana company that brings a unique craft twist to the emerging industry.
Overview: GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF)
GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is a vertically-integrated cannabis company that seeks to bring a premium craft quality approach to the legal marijuana industry. The Kelowna, British Columbia-based company was founded in 2017 and currently holds 100% ownership interests in six subsidiaries:
- GreenTec Bio-Pharmaceuticals Corp.
- Alberta Craft Cannabis, Inc.
- Grey Bruce Farms, Inc.
- Falcon Ridge Naturals, Ltd.
- Tumbleweed Farms Corp
- Zenalytic Laboratories, Ltd. (Zen Labs)
Across its six subsidiaries, the company holds 1 cultivation license, 4 late stage cultivation applicants, and 1 dealer’s license. GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) just announced that its Zen Labs subsidiary had been awarded the highly-coveted dealer’s license from Health Canada on July 16th.
GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) may have just gone public on June 22, 2018, but the company is backed by some industry heavyweights.
Canadian venture capital firm, Doventi Capital, was a major backer of the company during their C$16.24 million seed financing. Doventi Capital invested C$8 million into GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF). Furthermore, management has invested over C$6 million of their own capital into the company, effectively “putting their money where their mouth is,” something that is largely absent from companies at this level.
Management estimates current cannabis production will be around 50,000 kilograms per year by 2020, as GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) has over 23 million square feet of expansion capabilities.
Subsidiaries
GreenTec Bio-Pharmaceuticals Corp.
GreenTec Bio-Pharmaceuticals Corp. serves as GTEC Holdings, Ltd.’s (TSXV: GTEC) (OTC Pink: GGTTF) flagship asset. The subsidiary operates as a bio-pharmaceutical research and development company that seeks to deliver “clean, quality medicine in an environmentally sustainable manner to Canadian patients.”
GreenTec Bio-Pharmaceuticals Corp. is currently constructing an 80,000 sq. ft. facility that is currently in the application process to be a licensed producer under Health Canada’s ACMPR rules and regulations. Once constructed, the facility will provide patients with up to 10,000 kilograms of cannabis annually.
The subsidiary also has expansion opportunities for a second location on a 160-acre lot in North Okanagan. Also, in consideration is a third site, which would be on 35 acres located on the Trans Canada Highway in Revelstoke, BC.
Alberta Craft Cannabis, Inc.
Alberta Craft Cannabis, Inc. focuses on the cultivation of small batch, craft quality cannabis. The Edmonton-based craft cannabis company holds an active cultivation license with Health Canada, which was received in September 2017.
The high-quality cannabis producer has a 14,000 sq. ft. facility that is capable of producing annual output of 1.3 million grams of craft marijuana. The company received its initial batch of genetics in April 2018 and “immediately commenced cultivation.”
GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is interested in beginning the application process with Health Canada for a second location under the Alberta Craft Cannabis name.
Falcon Ridge Farms
Falcon Ridge Naturals, Ltd. (also known as Falcon Ridge Farms) is an eclectic farm located in Kelowna, British Columbia. The company also offers other certified organic products such as honey, jam/jelly, syrups, condiments, spices, and more. Falcon Ridge Farms focuses on producing certified organic Echinacea Angustifolia and echinacea products. The company holds three natural health product (NHP) licenses from Health Canada.
GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is currently preparing to construct a 10,000 sq. ft. cannabis production facility at Falcon Ridge, which will have the capability to produce 1 million grams of organic cannabis annually.
Grey Bruce Farms
Grey Bruce Farms focuses on producing high-quality and diverse medical cannabis strains. The boutique cannabis producer is currently in the process of constructing a 15,000 sq. ft. craft cannabis facility in Grey Bruce County, Ontario. Grey Bruce Farms has already submitted an application to be a licensed producer to cultivate medical cannabis with Health Canada.
Grey Bruce Farms’ focus is as an organic family farming company, which utilizes horticulture and organic methodologies to produce high-quality medical cannabis.
Tumbleweed Farms
“Tumbleweed Farms, a wholly owned subsidiary of GTEC Holdings is currently in construction of its 10,000 square foot boutique craft cannabis ACMPR production facility located in Chase, BC on 22 acres. Tumbleweed Farms will utilize natural resources British Columbia has to offer, such as an abundance of clean and pure water within the property, as well as growing mediums & fertilizers that are locally produced. Tumbleweed Farms is also located within 8kms of the Trans Canada Highway, which will offer simplicity of logistics to ship product into the Lower Mainland, Northern BC, or into the province of Alberta.”
Zen Labs
Zen Labs is a full-service chemical and microbiological diagnostics lab and testing company for soil, water, and cannabis. The testing facility is able to test for contaminants, metals, microbiology, pesticides, and other factors.
The Kelowna, British Columbia company just recently made big news that it has officially been issued a dealer’s license from Health Canada. Zen Labs plans to apply for amendments to its dealer’s license, which will allow for extraction, refining, exporting, and other capabilities.
Recent News & Updates
June 2018:
25th: GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) provides operational updates across its six wholly-owned subsidiaries. This press release came just days after Canada had officially announced plans to legalize recreational cannabis on October 17, 2018.
27th: The company announced that Health Canada completed an on-site licensed dealer inspection at its Zen Labs facility. GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) was told by Health Canada inspectors that a follow up visit would not be required before being awarded the dealer’s license.
July 2018:
9th: The Canadian cannabis company provides an update across its retail operations, which announced a relationship with Cannabis Cowboy. GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) will immediately begin processing 24 retail cannabis locations under the Cannabis Cowboy name.
Under the terms of the shareholders’ agreement with Cannabis Cowboy, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) will commit up to C$150,000 per retail storefront location company, be a preferred supplier of dispensaries and hold a right of first refusal on the following situations:
- Further partnering with Cannabis Cowboy for additional locations
- Ability to participate in future financings
- Purchasing Cannabis Cowboy shares that are up for sale
11th: GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) signed an exclusive binding letter of intent with F-20 Developments Corp. to construct a 240,000 sq. ft. indoor cannabis cultivation facility in Vernon, British Columbia. F-20 Developments will be funding C$9 million towards the Phase 1 project costs, while GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) will spend the final C$1 million for the Phase 1 project. In return, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) will issue the equivalent of C$2.5 million in shares.
16th: The Canadian craft cannabis company made major announcement that its Zen Labs subsidiary has been issued a dealer’s license by Health Canada. This comes just 17 days after Health Canada officials conducted the facility inspection.
Market Cap/Financials
As of July 2018, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) maintains a market cap of C$80.60 million and currently trades at a price around C$0.95 per share. The company has total shares outstanding of 85.74 million. Furthermore, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) has cash holdings of around C$14 million and total liabilities of C$5 million.
Management Team
Norton Singhavon – Founder, Chairman, CEO
Norton currently serves as the Founder and Executive Chairman of Doventi Capital. Norton has extensive experience at the senior management level of capital investments and has been involved in several large acquisitions, consolidations, and start-ups in Canada’s legal cannabis sector, both private and public. As an investor and advisor to numerous companies in Canada’s ACMPR sector, he has been responsible for internally deploying over $45 million into the legal cannabis sector and has been involved in another $65 million of public M&A ACMPR transactions.
Norton also is an advisor to, and early-stage investor in, Invictus MD (TSX.V: GENE). As an experienced corporate leader, he has facilitated in regulatory matters, corporate matters, raising capital privately and publicly, as well as strategic corporate development within the public markets.
Michael Blady – Co-Founder, Vice President
Michael formerly served as a Director of Invictus. He is also an advisor to Doventi Capital. Michael holds degrees in Kinesiology and Geology from Simon Fraser University. As a venture capitalist, he has been involved since 2009 in the start-up and senior management of numerous public companies as well as performing the role of Consultant and Advisor. In his recent role as Director and Senior Executive of Invictus, Michael helped oversee the acquisition, management and growth of a diverse portfolio of cannabis-centric businesses owned by Invictus. These businesses include manufacturing hydroponic equipment, laboratory testing and services, cultivation, media, marketing and biopharmaceutical applications. Michael has been directly involved in raising more than $65 million of capital in the cannabis sector.
David Lynn – COO
David formerly served as the President & CEO of Sun-Rype Products. During his tenure at Sun-Rype, David achieved record net sales and EBITDA while taking Sun-Rype from a $13 million EBITDA loss to a $15 million EBITDA profit in his first year. Previous to Sun-Rype, David served as the Senior VP of Marketing at Saputo Canada, where he oversaw the consumer marketing strategy for the largest division of the company.
David has successfully lobbied federal and provincial governments on regulatory and policy issues including working with BC Liquor Policy Review and the Liquor Control and Licensing Branch (LCLB) to modernize liquor regulations in BC. With some provinces already electing to control distribution and sales in the future adult-use market through their provincial liquor control board, David’s extensive background will be a tremendous asset in navigating through the complex and diverse federal and provincial regulations. His lengthy tenure with publicly traded companies on the TSX will be immensely beneficial in guiding GTEC’s future growth. David holds a Bachelor of Commerce (Marketing, Honours) and Master of Business Administration (Finance) from the University of British Columbia.
Jeremy Wright – CFO
Jeremy currently serves as the President & CEO of Seatrend Strategy Group. He has significant experience serving as a Director of Demetra Minerals, Budly Software, and Pacific Community Resources Society, and previously serving as a Director with PreveCeutical Medical, and the Canadian Freestyle Ski Association. Additionally, Jeremy currently serves as the CFO for several public and private companies including: Centurion Minerals, Demetra Minerals, and Portofino Resources, and was previously the CFO for PreveCeutical Medical.
Jeremy is a Chartered Professional Accountant (Certified Management Accountant). He has extensive negotiation training, including the University of British Columbia’s Sauder School programs: “Advanced Negotiation Skills” and “Strategies, Skills and Tactics of Negotiation”. He also holds a Bachelor of Arts, with honours in Environmental Economics from Brock University.
David Buckle – VP of Operations
David is the former Senior Grower at In The Zone (currently known as Original BC), a Licensed Producer under the ACMPR. David was responsible for: overseeing the junior growing team; developing a cultivation regiment that would ensure satisfaction to Health Canada’s QA/QC standards; overseeing harvests; and all over general cultivation duties. David was integral to establishing the first three harvests for In The Zone, which played a pivotal role in them acquiring their Sales License from Health Canada. David also serves on the advisory board of Doventi Capital.
Kam Thindal – Director
Kam is a Co-Founder and Managing Partner of Core Capital Partners (formerly Hamza Thindal Capital Corp., “Core”). Kam also currently serves as an advisor to Doventi Capital. Kam holds a Bachelor of Technology in Technology Management from the British Columbia Institute of Technology. Prior to forming Core, Kam spent five years as an independent capital markets advisor for several TSX-V listed companies. In 2014, Kam lead both the private funding and IPO financing for Canada’s fifth licensed cannabis producer, Thunderbird Pharma (currently known as Emerald Health Botanicals – EMH.V), simultaneously attracting capital investors while acquiring a control position. Kam and his partners have funded and acquired both medicinal and recreational cannabis assets in Canada and the US.
For the past seven years Kam has sourced investments, negotiated financings and acquisitions in various sectors with a particular focus on biotech, health care, technology and special situations, including cannabis in both private and public companies. Kam has funded several pre-clinical and clinical stage health care companies with an aggregate investment of over $50 million.
*To learn more about GTEC Holdings, Ltd.’s (TSXV: GTEC) (OTC Pink: GGTTF) management, advisory teams, and Board of Directors, click here.
Overall, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is an exciting and undervalued Canadian cannabis company that is preparing to cash in on the planned recreational marijuana legalization in October. GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is one of the latest companies to go public in the red-hot Canadian cannabis market. However, unlike its peers, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) does not suffer from massive, unreasonable valuations. In fact, compared to its peers, GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) is significantly undervalued when considering market cap and operations. GTEC Holdings, Ltd. (TSXV: GTEC) (OTC Pink: GGTTF) may be relatively new to the public domain, but this vertically-integrated cannabis company has an extremely bright future ahead.
GTEC Holdings, Ltd. was also recently featured on an episode of Spotlight Growth Live, check it out here.
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