Cultivation, Processing, and Wholesale:
Cultivation, Processing, and Wholesale
Serving Canadians Coast to Coast
The Company’s principal cultivation, processing and wholesale operations are focused on its 80,000 square foot Winnipeg based facilities (the “Delta Facility”).
The Company's proprietary cannabis production methodology is based around a modular, scalable, and stackable production unit called a grow pod ("Grow Pod"). The Company builds its Grow Pods by retrofitting standard, once-used, 40 foot high-cube shipping containers into Grow Pods. The Grow Pods are built to comply with Health Canada security requirements and good production practices. The Grow Pods create optimal conditions for large scale production of cannabis. Grow Pods can also be stacked on top of each other to use the production space available to the Company most efficiently. The Company retrofits shipping containers into Grow Pods at the Delta Facility, employing the Company's own staff as well as independent contractors.
Management believes that Grow Pods provide numerous benefits versus traditional open warehouse or green house cannabis production operations, namely:
- A higher level of control over the growing environment contributing to higher quality cannabis products;
- The ability to customize the growing environment for each genetic strain of cannabis, maximizing the quality and output of these strains;
- The Grow Pods are relatively inexpensive and provide an attractive return on invested capital;
- The modular format minimizes the risk of contamination or spread of contamination from plant diseases or pests; and
- The modular format minimizes the risk of materially significant crop loss.
The Company has 297 Grow Pods licensed by Health Canada with a projected annual cultivation capacity of 8,325 Kg of dried cannabis.
Portfolio of Cannabis Products
Dried Cannabis Flower
The Company currently produces approximately 30 different genetic strains of cannabis, each with its own unique chemical cannabinoid content, terpene, and flavonoid profiles, and with another 40 strains being stored on site in a seed bank to provide for product options in the future. All cannabis production by the Company occurs at the Delta Facility. Management believes that the Company has one of the largest in-house stocks of unique genetic cannabis strains among cannabis producers in Canada. The Company currently produces, processes and dries these genetic cannabis strains into whole flower cannabis products. "Whole flower" cannabis refers to the unaltered flower of the female cannabis plant that appears in "bud" form. No undesirable components such as stalks, stems and leaves are included in whole flower cannabis. Whole flower dried cannabis currently accounts for approximately 70% of the Company's overall product offering.
Pre-RollsDelta 9 offers 4 different cannabis pre-roll products in different potency categories; Delta 9 Twist, being our high THC, Bliss being mid-range THC, J-Lo, low potency and Mellow are a balanced pre-roll inclusive of both THC and CBD. Our pre-rolls offer consumers custom curated blends of premium cannabis flower in 2x0.5g pre-rolled “Raw” cones.
We have produced and sold several million cannabis pre-rolls to-date.
Blended Cannabis Flower
The Company currently produces and sells a selection of blended cannabis products, which consists of several high-quality dried cannabis products blended together to produce a milled finished product. The products used for the blend are products which would not otherwise meet quality standards for whole flower dried cannabis and, as opposed to becoming a waste product, are turned into a cheaper blended material, which is used by the Company for pre-rolled joints. The Company's house blended products currently account for approximately 5% of its overall product offering.
Oils, Extracts, and Derivative Products
The Company, through its subsidiary Delta 9 Bio-Tech, is currently licensed by Health Canada to produce and sell cannabis oils, extracts, and derivative products. It is management's belief that these products will become an increasingly important component of the medical and recreational use cannabis markets in the future. The Company's oil products currently account for approximately 10% of its overall product offering.
The Company is currently working with Westleaf through its subsidiary Westleaf Labs LP to develop a line of vaporized cannabis oil products including a line of vaporizable oil cartridges and a line of disposable vape pens. The products, which will be branded as "Harmony", "Cruise", and "Blast", will contain distilled cannabis oil and cannabis terpenes, in varying concentrations of active cannabinoids. The Company plans to release the vape products in the recreational cannabis market in the second quarter of 2020.
Dried Sift Cannabis
The Company produces a line of dried sift cannabis products for the recreational cannabis market which involves sifting the Company's blended products and refining it, leaving more of the high potency resin glands, and less of the low potency plant material. The final product is a yellow/brownish powder and has a potency that is up to double that of the whole flower dried cannabis materials. The Company is currently developing its "Sapphire" line of dried sift cannabis products for the recreational cannabis market. The Company released this product in the market in the first quarter of 2020.
As the Company increases its cannabis production capacity, subject to the authorization, it plans to expand its distribution into additional provincial markets through supply listings or formal supply agreements in those markets.
The Company's distribution strategy will be to enter a target market and achieve market penetration, targeting material market share, as consumers adopt "Delta 9" branded products. In order to achieve growth in this market, management has entered into a number of significant supply agreements as described below;
- Supply Agreement with Manitoba Liquor and Lotteries Corporation (MLLC) to supply consumer packaged Delta 9 products to retailers in the province of Manitoba
- Supply Listing with Saskatchewan Liquor and Gaming Authority (SLGA) to supply consumer packaged Delta 9 products to retailers in the province of Saskatchewan
- Supply Listing with the Province of Alberta to supply consumer packaged Delta 9 products to Alberta Gaming Liquor and Cannabis (AGLC)
- Supply Listing with the Province of British Columbia to supply consumer packaged Delta 9 products to the British Columbia Liquor Distribution Branch (BCLDB)