5 Questions with Rosy Mondin of Quadron Cannatech (CSE: QCC)
By: Peter Bell
For no good reason, I’ve ignored much of the bull market in the cannabis industry and missed out on massive speculative opportunities. The early wins may be past now, but there are still big opportunities as the dust settles. One theme that makes the most sense to me is “Picks and Shovels”. The team at Venture Cap News have been tracking Quadron Cannatech (CSE: QCC) over the last few months and we were ecstatic to see the incredible success following the launch of their proprietary, state of the art CO2 extraction machine “The BOSS”, which has recorded three rapid sales in the last two weeks.
We sat down with Rosy, CEO of Quadron Cannatech to discuss what’s behind the success, the changing legal landscape and how big this market could really be.
Peter: Hi Rosy, I’ve noticed Quadron has recorded three sales of your recently launched CO2 extraction machine in the past two weeks, why do you think growers are lining up to buy the BOSS?
Rosy: Hi Peter. I believe it’s a combination of simplicity, automation, quality and cost-effectiveness – Plug & Play. Our vision when we created the BOSS was to take as much complexity out of the process as possible to create a CO2 extraction unit that anyone can use. We’ve eliminated manual valves and created automated controls, remote monitoring and programmable cycles so you no longer need to be an engineer or have a team of high trained technicians to operate a CO2 machine and create high quality oils. Additionally, our machine comes in at a lower price point then many others on the market and can be set up in a matter of hours with no external hardware or facility renovations required – a rarity in todays marketplace. We let growers focus on what they are good at, growing, while we bring the expertise in extraction via the BOSS.
Peter: As a Canadian company Is Quadron able to target and sell to U.S. customers?
Rosy: Definitely. We’re an equipment manufacturer and supplier and don’t handle any cannabis. This allows us to have cross border customers and sell our equipment to anyone in the world just like any other manufacturer.
Peter: That’s great. Where is the US in regard to Canada legalization wise?
Rosy: While Canada is expected to legalize cannabis at the federal level in July 2018, there is no timeline on federal legalization for the U.S. In the US, 29 states and the District of Columbia have laws broadly legalizing marijuana in some form. We’ve already seen multiple states legalize cannabis for social-use, with many more expected to in 2018. Eight states – Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon and Washington have fully legalized the sale and distribution of cannabis with Vermont, New Jersey, Michigan, Connecticut, Delaware, Illinois, and Rhode Island seen as the next most likely to pass legalization bills. What we’re seeing in the U.S. is legalization bringing in millions of tax dollars to local communities with none of the perceived negative consequences, so I think we will see an acceleration of states legalizing in the future.
Peter: As cannabis continues to move towards legalization, tell us a bit about the trends we’re seeing in oils and edibles.
Rosy: As legalization has opened up the cannabis market has become more sophisticated and consequently extracts, concentrates, oils and edibles have seen tremendous growth. The latest sales data reported by Health Canada in March 2017 showed that oil sales from Canada’s Licensed Producers accounted for nearly 50% of total sales. Similar trends are being seen in the U.S. as well with early data from Washington, Colorado and Oregon showing sales of extracts/oils/concentrates/edibles accounting for about 40% of total sales. Essentially, consumer preferences are moving away from smoking dried product towards other delivery methods such as tinctures, vape pens, edibles, topicals etc. which all require oils as an input.
Peter: That makes a lot of sense. Lastly, how big is the cannabis market?
Rosy: Estimates for the size of Canada’s cannabis market vary but there is no doubt it is a multi-billion to tens-of-billions of dollars per year industry. Health Canada recently announced that they are in the final stages of approving over 200 growers for licenses, over 200 are currently in security clearance, and as legalization continues forward, particularly with the inception of the nursery, processor & micro- categories of licenses, it’s not unreasonable to assume that we could eventually see thousands of production licenses across Canada. This would foster a truly competitive environment. For Quadron however, as I just mentioned, we are not limited by borders – Canada is just one market for us. The U.S. market is 10 times larger than Canada’s and represents a massive growth opportunity for us, especially as more states move towards legalization. We’ve already begun to tap into this market, recording our first sale of the BOSS to a US customer yesterday.
Thank you for your time and insights Rosy!
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Quadron Cannatech Corp. is a marketing client of Venture Cap News and one or more of the Venture Cap News owners does own shares in Quadron Cannatech Corp.