FinCanna Capital Corp. (OTCQB: FNNZF) (CSE: CALI) announces that it has received its listing on the OTCQB under the symbol “FNNZF” and provides the following update on the interim medical cannabis extraction facility (“Extraction Facility”) of Cultivation Technologies Inc (“CTI”), FinCanna’s first investment in California. As announced on January 15, 2018, CTI took over direct operations of its Extraction Facility operating at its site in Coachella, California and CTI has the rights to 100% of the production capacity.
CTI is quickly advancing towards commercialization and ramping revenue at the Extraction Facility from which FinCanna is entitled to receive 50% of the profits.
This Extraction Facility can currently process an estimated 6,000 pounds of biomass per month translating to approximately 3.7 million grams of raw oil per year. CTI has the ability to add an additional extraction machine and fractional distillation and winterization equipment. This would result in additional capacity to process 3,000 pounds of biomass per month and the ability to service third-party vaporizer, winterization and distillation customers at a scale of approximately 100,000 grams of finished product weekly.
CTI’s Coachella Premium Brand
CTI’s own brand, Coachella Premium, recently introduced a line of medical concentrates which are now available for sale to all California licensed dispensaries. CTI is currently expanding its product line to include vaporizer cartridges, which will become available in the coming weeks. Initial market feedback gathered during the product development phase indicates that Coachella Premium's vaporizer cartridges offer a unique proposition within the vaporizer market, one of the fastest growing verticals in the cannabis market.
Manufacturing and Distribution Services
Since taking operational control at its Extraction Facility, and after obtaining state temporary licenses, CTI has acquired key accounts for contracted manufacturing and distribution. Private label services have commenced at the site, providing brands which otherwise had no legal avenue to participate in the licensed environment, a legal solution to maintain their presence in the market.
Implementation of Commercial Sales Team
To commercially advance these opportunities, CTI has hired an experienced sales team consisting of a director of sales, two full-time sales managers, and three independent sales contractors. Chip Coble, the Company’s new director of sales, joined the CTI team in the beginning of March and brings with him over 25 years of channel sales and operations management, overseeing teams as big as 100 and managing multi-million-dollar budgets. He will be overseeing the sales of CTI’s exclusive line of branded cannabis products: Coachella PremiumTM, as well as direct B2B sales under CTI’s manufacturing and distribution operations. CTI's sales organization is strategically set up to serve designated zones throughout California to ensure statewide market penetration.
The state of California is taking steps to curtail the operations of the black market. Regulators have begun sending cease and desist letters to unlicensed operators, including advertising companies which have continued to support unlicensed operators. In addition, an effort to support the businesses which have invested time and capital to reach legal status has begun with the introduction of amendments to Assembly Bill (3157). The amendments propose to reduce the price disparity between legal cannabis business and black-market sources by suspending the state’s cultivation tax and reducing the state’s excise tax until 2021. These efforts highlight the state's support for compliant business, strengthening the value proposition and opportunity in front of compliant operators such as CTI.
With the passing of Proposition 64 in November 2016 and legalization of adult use taking effect January 1, 2018, the state of California is now the world’s largest regulated cannabis market and estimated to be worth $6.45 billion by 2020. More information on the effects of the changing landscape in California can be found here.
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