Tony Deyes March 22nd, 2019 Exclusive, News, Top Story Calgary-based Westleaf Inc. (TSX-V: WL) has entered into an exclusive partnership with a Colorado cannabis... Westleaf Partners With Xabis Ahead of Derivative Products Legalization

Tony Deyes

March 22nd, 2019

Exclusive, News, Top Story

Calgary-based Westleaf Inc. (TSX-V: WL) has entered into an exclusive partnership with a Colorado cannabis processing company providing turnkey extraction and cannabis-infused derivative product manufacturing solutions.

Under the agreement, Xabis Inc, an industry leader in the design, construction, and management of extraction & manufacturing facilities, as well as the development of cannabis-infused products, will provide expertise to the company’s Calgary extraction and production facility currently under construction. Xabis has designed, built, and operated facilities in five US states where medical or recreational cannabis has been legalized, and developed over two dozen delivery systems and concentrate types with more than two hundred individual product SKUs, including oil-based oral solutions, gummies, hard-pressed tablets, water-soluble powders, oil-based capsules, body-melt capsules, and suppositories. Its exclusive relationship with Westleaf is the company’s first foray into Canada, the largest single legalized recreational market.

“We are entirely focused on the plant-to-product portion of the value chain,” said Dale Zink, CEO of Xabis. “From the end of the grow to the final processed product shipping out to the retail store or dispensary, we apply our expertise to help companies create the industry’s best and most profitable processes and systems.”

Zink leads a group of PHDs with extensive experience in biotechnology and chemical engineering, including experience in the extraction industry, the pharmaceutical industry, as well as academia.

The Plant by Westleaf Labs

Westleaf’s Calgary facility formerly known as Delta West has been rebranded as The Plant by Westleaf Labs after the company acquired 100% of the facility in January.

Subject to Health Canada licensing, the extraction & production facility located in southeast Calgary is expected to produce cannabis derivative products in anticipation of their legalization expected by October, including edibles, topicals and other cannabis-infused products, in compliance with provincial and federal regulations.

In markets like California, where derivative products have already been legalized for recreational use, increasingly health-conscious consumers are moving away from smoking flower and to alternative delivery methods. Westleaf believes the same will be true in Canada following legalization, and wants to hit the ground running, so it’s focusing on differentiated product formulations like vape cartridges, edibles, beverages, and topicals to meet the expected demand.

Commenting on the agreement, Scott Hurd, Westleaf President and CEO said, “This partnership is another part of the execution on Westleaf’s strategy of becoming a significant vertically-integrated player in the Canadian cannabis industry. We believe a diversified offering of derivative cannabis products will account for a major shift in consumer demand once legal. We are positioning to formulate unique, high quality derivative products and bring in the best minds in the industry to help leverage our expertise in building and running these types of facilities.”

The Plant is being built to GMP specifications to ensure regulatory compliance in Canada and enable export capabilities. Strategically located in Calgary, the largest retail market in the prairies, it has access to transportation services serving Canadian and global markets.

The facility includes an approximately 60,000 square foot complex with Phase I (~15,000 sq. ft.) designed to include R&D, processing, extraction, manufacturing and order fulfillment. Construction is expected to be complete in summer 2019, and Phase II is being readied for the production of Westleaf’s derivative product lines in preparation of Health Canada’s anticipated legalization of derivative and consumable products, expected to occur on October 17, 2019. Cannabis derivatives will be produced under Westleaf’s brand portfolio and Westleaf plans to offer white labeling services to produce finished products for third parties, as well as contract manufacturing services for raw extract and distillation.

Westleaf has also begun the fully-funded interior build of its 130,000 square foot Thunderchild indoor cultivation facility located near Battleford, Saskatchewan. Phase I includes an 85,000 square foot indoor growing facility, while Phase II will bring the facility to full-scale and enable the cultivation of over 14,000 kgs. of dried cannabis annually.

2019 Shaping Up to be a Banner Year

Westleaf recently opened the first of its innovative Prairie Records locations in Warman, Saskatchewan, with two Saskatoon locations set to hold their grand openings on April 20th to coincide with 420 celebrations.

Thus begins the much-anticipated rollout of company’s innovative retail outlets which mimic the design of record stores, where customers will be immersed in music as they browse through album covers containing information about products, branding, strains, and THC/CBD content, giving them a unique tactile experience as they learn about Westleaf’s offering. The company’s portfolio of premium retail locations include the only approved development permits adjacent to the University of Alberta and retail spaces currently under development in Calgary and Banff, including a flagship Prairie Records store planned for Calgary’s iconic Palace Theatre.

The Xabis deal is expected to advance Westleaf’s product development & production, while the planned legalization of derivatives will enable it to greatly expand its offering. The rollout of Prairie Records will help build its brand and generate revenue, while the completion and licensing of its manufacturing facilities enable it to meet its growing needs. So 2019 is shaping up to be a banner year for Westleaf.

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About Tony Deyes

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