In this edition of "Rising High," The Fly conducted an exclusive interview with Jim Pakulis, chief executive officer and chairman of TransCanna Holdings, a Canada-based company focused on providing branding, transportation and distribution services to the California cannabis industry. Here are some of the highlights:
CANNABIS LOGISTICS: TransCanna specializes in assisting clients who are cannabis farmers and manufacturers get recognized by end consumers by offers services throughout every aspect of the cannabis-related ecosystem from branding and design to transportation and distribution to marketing and sales. “TransCanna's goal is to be a leader in the branding, transportation and distribution sectors in the California cannabis industry,” Pakulis said, noting the company recently accepted an option to acquire an existing 196,000 square foot, vertically integrated cannabis focused facility in northern California. He added the facility is on roughly six acres of land which can be used for future expansion. “It's a tremendous opportunity in which we're in escrow to acquire the property at an extremely attractive price,” he said. “Subject to acquiring the facility, we'll arguably be one of the largest branding companies in California and will be able to control our complete ecosystem at our campus.” The CEO said the intended purpose of the facility includes divisions for transportation, distribution, manufacturing, bottling, nursery and growing.
CALIFORNIA FOCUS: TransCanna is concentrating its efforts for California and will not be looking to expand at this point in time, Pakulis said. “California is the largest marketplace in the U.S. It has 40 million residents and approximately 240 million annual visitors per year,” he said. “In other words, approximately 89% of the US population touches California on an annualized basis. Consequently, we're very comfortable getting our standard operating procedures down in California and growing throughout 2019.”
LEGALIZATION: When asked which country might follow Canada’s lead in legalization, the CEO said he is not following other nations as he is ‘laser focused’ on creating the company’s foundation in California. He added he does not know what the U.S. government will do in relation to either re-scheduling or exempting cannabis. “As far as other states go, I'm sure we'll see more states vote on medicinal cannabis and follow up with recreational,” he said “It's the will of the people. It only makes sense to allow it.”
CHALLENGES AND OPPORTUNITIES: Pakulis said he believes one of the biggest issues is the lack of consistency around banking. “Once the industry gets relief and is able to rely on U.S. banking then we'll see a material shift in the industry in a positive way,” he said. As far as opportunities go, Pakulis said the industry is still in “the embryonic phase” so there are opportunities everywhere you look. “In fact, I'd argue that today there are more opportunities in California than in 2018,” he said. “The regulations are getting worked out, farmers are growing a higher grade product and more quality manufacturers are producing oils. I think the future is extremely bright in California.”
INVESTOR INTEREST: When asked what investors should keep an eye on, the CEO said expansion and execution will be the keys to 2019. Investors should look out for companies that are “executing on the business model, driving revenue and starting to concentrate on EBIDTA,” Pakulis said.
MISCONCEPTIONS: The biggest misconception surrounding the industry is that cannabis is harmful, Pakulis said. “There's a tremendous amount of data arguing the significant benefits of cannabis. I hope this gets into the marketplace sooner rather than later.”
SMALL STEPS: Pakulis said there are “tremendous challenges” in the cannabis space, which comes with any industry that is going through growing pains. “The key is taking small, effective steps every day, keeping your eye on the granular issues, and most important, surrounding yourself with top tier management and team members,” he said. “Without that all you have is a good idea.”
OTHER CANNABIS STOCKS: Publicly-traded companies in the space include Aurora Cannabis (ACB), Aphria (APHA), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Cronos Group (CRON), General Cannabis (CANN), Canopy Growth (CGC), Tilray (TLRY), Innovative Industrial Properties (IIPR), India Globalization Capital (IGC), ICC International Cannabis (KNHBF), Biome Grow (ORTFD), MediPharm Labs (MLCPF), Indiva (NDVAF), OrganiGram (OGRMF), KushCo (KSHB), MedMen Enterprises (MMNFF), Elixinol Global (ELLXF), Planet 13 Holdings (PLNHF) and Wayland Group (MRRCF).
“Rising High" is The Fly's recurring series focused on cannabis stock news.
Keywords: cannabis, weed, stocks, marijuana, cultivation, legalization, CBD, THC, recreational, medical, derivatives, edibles