StillCanna CEO Talks Deal with Dragonfly: Revenue-Positive

Today Rich sat down with StillCanna (CSE:STIL) (OTCPK:SCNNF) CEO Jason Dussault to discuss some of the company’s recent initiatives as well as its goals for the future.

StillCanna Inc. is a Vancouver-based CBD extraction company focused on the European market. The company is notable for its propriety intellectual property, which allows it to keep CBD extraction costs exceptionally low.

“What we’re trying to do is become a leader in bulk sale of CBD isolate in Europe and in the world,” says Dussault. “Not only sale, obviously, but also manufacturing.”

Earlier today, news broke that StillCanna is preparing to harvest its 2019 Polish crop. Fortunately, Dussault was on hand with Rich to give context to his company’s focus on CBD extraction in Europe. He begins by noting that StillCanna is one of the CBD leaders in Europe because it reached that space early.

“CBD is quite new, a lot of people and a lot of companies are jumping into it headlong right now. But my farmers have been farming in Poland for the last twenty years,” says Dussault. “In fact, their parents were farming hemp even prior than that. So it literally comes down to experience.”

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StillCanna and Dragonfly Biosciences

Dussault also discussed StillCanna’s partnership with anchor customer Dragonfly Biosciences, which consists of a three-year, $46 million CAD contract to be the company’s sole extractor of CBD.

“Dragonfly is a leader in CBD products in Europe,” says Dussault. “They have an 85 percent footprint on the shelves in Europe. You can’t really walk very far in London without finding Dragonfly products.”

Dussault recounts a visit he took to Dragonfly’s fields in Bulgaria and explains that he was very impressed by what he saw there. When Dragonfly needed help financing its Romanian CBD extraction facility, StillCanna stepped up to help, bringing along its team and technology along with the money.

“This plant, I was just there, it’s incredible,” Dussault says, smiling. “It’s built to GMP standards and we should be processing their first batch of CBD out of Romania for the first quarter of this year.”

Rich notes that Dragonfly has the potential to be one of the only cannabis companies to be revenue-positive so early in its life. Amidst industry-rattling news that Canopy co-founder Bruce Linton was ousted from the company after reporting a net loss of $670 million CAD, StillCanna’s ability to make early profits sets it apart from other cannabis corporations.

“That was always my goal,” Dussault explains. “The first goal was to find a company in this space, and the second goal was to get to revenue as soon as possible, and get to cash-flow-positive revenue as soon as possible. And I know that’s important to investors.”

Please see video transcription below.

Featured image: StillCanna

Video Transcription

hi guys how you doing this is rich here
00:05
if you have a rich TV live and I’m here
00:07
with a very special guest it’s Jason
00:09
though how you doing today good I do
00:11
very good and we’re here to talk about
00:13
still can ink so why don’t we just get
00:15
started how why don’t you tell us a
00:17
little bit of boats locating the cabin
00:19
well stuff ken has only been still
00:21
Canada really for the last four months
00:22
and what we are and what we’re trying to
00:26
do is become a leader in the bulk sale
00:28
of CBD isolate in Europe in the world
00:31
not only sale but obviously manufacture
00:34
so we’ve got the hem fields in Poland
00:37
and we’ll have two extractions sillies
00:39
online in Europe for the fourth quarter
00:41
of this year and why the focus on the
00:44
European markets well there’s a number
00:46
of reasons one is very big the last
00:49
estimate for 2021 I believe was 66
00:52
billion it’s also 28 separate companies
00:56
that were sort of countries that we can
00:58
freely move our help and related
01:00
products across borders and I guess the
01:03
third reason is that you know we’re one
01:07
of the leaders in the space because we
01:08
were there before everybody started
01:10
talking about CBD CBD is quite new a lot
01:13
of people and a lot of companies are
01:14
jumping into it headlong right now but
01:17
my farmers have been farming in Poland
01:19
for the last 20 years but their parents
01:22
were farming hemp even prior to that so
01:24
really comes down to experience also CBD
01:27
has been legally available on the
01:29
shelves in Europe for the last five
01:30
years whereas the US just came online
01:33
now Canada you still really can’t buy CB
01:37
related products yeah you can go get
01:40
high and smoke adjoint so you know it’s
01:43
it’s Europe is a great spot because
01:45
they’re used to it they know I and and
01:47
they know how to grow it and that was
01:48
where our opportunity that’s great and
01:51
can you elaborate on your partnership
01:53
with dragonfly Biosciences LLC yes
01:57
so dragonfly is a leader in CBD products
02:00
in Europe they’re on the shelves of
02:02
boots they’ve just signed a deal with
02:04
Harrods they are having 85 percent
02:08
footprint on the shelves in London so
02:12
there are you know
02:13
can walk very far under without finding
02:15
dragonfly products how the relationship
02:18
started was that just over I guess
02:21
almost a year ago I had visited their
02:24
fields in Bulgaria which were 100
02:26
percent growing organically
02:28
it was very impressed with the team and
02:29
they needed help with the financing of
02:31
their extraction facility in Romania and
02:33
so still kind of stepped up and where we
02:37
brought our technology and our team and
02:38
our money to build up that extraction
02:41
facility to extract their CV for them
02:43
this plant it was just there it’s
02:46
incredible it’s built to GMP standards
02:48
and we should be processing their first
02:52
batch of CBD out of Romania for the
02:54
fourth quarter of this year we’ll have a
02:56
film coming out in the next ten days
02:59
where I’ve done a walkthrough and a tour
03:01
with the local mayor and showed him the
03:04
facility and we’re very excited to get
03:05
started
03:06
seems like you guys are doing a lot of
03:08
work now are there any other future oh
03:10
there’s one more thing I should out go
03:12
ahead sorry but this is very very
03:13
important so dragonfly are not only our
03:16
partners in the facility they own 51% we
03:19
own 49 but what’s really great about
03:21
this deal was that it gets us straight
03:24
into revenue so we’re very in a contract
03:26
that can bring up to 40 million dollars
03:29
Canadian over the next three years of
03:31
processing exclusively all of their CBD
03:34
for their acreage ISM well that’s
03:38
impressive how’d you get that out there
03:42
get it all out there is there any other
03:45
future partnerships that you’re working
03:47
on in the pipeline we have a number of
03:50
different partnerships we’ve brought on
03:52
Warren Robinson onto our board and it’s
03:55
his job to follow up on conversations
03:59
that I have with much of different
04:00
companies and in M&A; opportunities were
04:04
a number of different exploratory
04:06
conversations nothing of course that’s
04:09
material or that we can announce but
04:11
we’ll make sure we when we do we
04:13
announce it we have mark cremini who is
04:16
our head of sales and he’s currently
04:18
negotiating a number of large iceland
04:21
sales deals currently we have
04:25
our first deal is with Biosciences out
04:27
of Los Angeles and they’re buying up to
04:31
six million dollars worth of Iceland
04:32
from us starting the fourth quarter of
04:34
this year from Wow guys have a lot of
04:36
business going on we do now before I get
04:39
to the next question one of the things
04:41
that we talked about is that you guys
04:43
have the potential to be one of the only
04:45
companies in the sector to be revenue
04:48
positive yeah I mean that was always my
04:50
goal against no chemist only four months
04:52
old it really a year you know the
04:55
original vehicle that I came on to a CEO
04:58
the goal was to try to find a company in
05:01
this space and the second goal was to
05:05
get to revenue as soon as possible and
05:07
to get to cash flow positive revenue as
05:10
soon as possible I really want to kind
05:12
of break those records and I know it’s
05:13
really important to investors especially
05:15
now they’re seeing a lot of companies in
05:17
the cannabis space I want to make sure
05:18
that you know everyone knows we’re not
05:20
in the cannabis space we’re only in CBD
05:21
but you know we sort of get painted with
05:23
with that brush and so a lot of the
05:25
companies that come up with these
05:26
tremendous forecasts and unfortunately
05:30
have met those and so what I want to do
05:32
is be one of one of the companies in
05:35
that grouping they hits revenue in
05:38
record time and I believe if we can hit
05:40
our revenue targets in the fourth
05:42
quarter of this year we will break
05:43
records
05:44
Wow that’s incredible and I’m sure you
05:46
guys will it’s looking really good I
05:48
mean you know if I look at it from a
05:51
risk perspective so okay where can these
05:53
guys go wrong so if we take it from the
05:55
step of farming while they have farming
05:57
experts that have been farming this land
05:58
in Poland for 20 years and their family
06:01
have been farming for 20 years prior to
06:03
that and they’ve never ever lost a crop
06:05
ha that’s impressive and I was just
06:08
there and they’ve had record
06:10
temperatures this year obviously climate
06:12
change to play played a huge part in
06:14
that or the reason for it and what
06:16
they’ve been able to increase their
06:17
yield so when I was there two weeks ago
06:20
the plants were up to my knees and
06:22
they’re gonna be harvesting now two and
06:24
a half weeks from today so they have the
06:26
we have the farming down I feel very
06:28
comfortable there you take it to the
06:29
next step where you have extraction and
06:31
my team has been extracting in Canada
06:34
now for the last five years and they
06:36
right over a thousand batches and now
06:38
we’ve built that same system on a much
06:40
larger scale in Europe and we’re about
06:43
to you know turn on the lights
06:44
for a quarter so if we end we’ve now got
06:48
the sales contract so we have all the
06:49
pieces in place to definitely have
06:52
revenues that is incredible now earlier
06:56
last month you announced an LOI with
06:59
Sequoia cannabis and anticipation of a
07:02
bumper crop yield in Poland this year
07:05
we’d love to know more about your plans
07:08
for this anticipated yield okay so I
07:11
have to be careful about talking exactly
07:13
about you know how much yield and the
07:14
sort of thing and forecasting numbers
07:16
until we start to generate revenues but
07:18
what I can tell you is again because the
07:20
temperatures have been a lot warmer in
07:23
Europe and especially in Poland our
07:26
yield is going to be larger this year
07:28
than we expected so we’re gonna have
07:30
extra biomass available and again
07:33
speaking to my earlier point of wanting
07:35
to hit revenues as soon as possible
07:37
maybe cashflow positive
07:38
we were reached out to buy another
07:40
processor and they were interested in
07:43
buying some of our biomass to process
07:45
and so we had extra biomass that I know
07:47
I wasn’t going to be able to produce
07:49
this year so we’re gonna sell it the
07:51
extra Massa was a little bit of icing on
07:53
the cake this year home that’s nice now
07:55
you guys also did a 24 million dollar
07:57
race yes
07:58
what expansion plans do you have in the
08:01
horizon with that 24 million that you
08:03
raised in financing well the 24 million
08:05
you know it was great we got some
08:08
excellent institutional investors in
08:09
that round which I’m very excited about
08:11
and I’m working with you know
08:13
strategically for different objectives
08:16
and potentials in the future but but
08:18
this 24 million what it allowed us to do
08:20
was to pick up the automatic acquisition
08:24
to buy their seeds which are they’re one
08:27
of only four companies that you have
08:30
that have their own registered high
08:33
concentration CBD seed which is very
08:35
very important yes and they had over 40
08:39
tons of seeds ready for us to plant this
08:42
year to go 1500 Hector’s in Poland which
08:45
will make us the largest hemp farmers
08:47
and all the Poland this year so
08:49
that money allowed us to buy that
08:51
company to buy the seeds to buy the
08:52
hardware to buy the planting equipment
08:54
now to buy the harvesting equipment and
08:56
to build our second extraction facility
08:58
in Poland so we’ve just named them in a
09:02
press release we put out today so the JV
09:04
with dragonfly and Romania which is
09:06
really just a tolling station for us is
09:08
named the origin and the second facility
09:11
which we’re building right now in Poland
09:13
is called the Nexus and the third will
09:16
be a larger facility that takes both the
09:19
technology and and what we’ve learned in
09:21
Romania and in Poland to build an even
09:23
larger extraction facility that will be
09:25
over twice the output of both of the
09:28
first two facilities called the horizons
09:31
so the money’s allowed us to do all of
09:33
that and where it’s a busy area yeah
09:38
seem like you’re crazy busy yeah now you
09:41
touched on that press release maybe
09:42
now’s a good time to talk about it sure
09:44
you want to maybe go over the press
09:45
release yesterday yeah I mean the press
09:47
release when I was over in Poland a
09:49
couple of weeks ago I went to go meet
09:51
with the farmers and to tour different
09:53
plots just to see how the plants were
09:55
doing I brought a film crew with me to
09:57
to film and to interview these ladies
10:00
and it’s really a generational story
10:03
what we have in Poland so you can
10:05
imagine you know the two ladies of all
10:08
whom actually acquired as I said earlier
10:10
they’ve been they’ve been farming and
10:12
harvesting hemp and making products in
10:15
the CBD space for CVT products for five
10:18
years and they’re farming for for 20
10:20
years it was Cristina has a son and her
10:23
son is Matias and so Matias grew up with
10:26
her with his grandfather in the fields
10:27
and now with mother in the fields and
10:29
now he’s just an employee great he’s
10:32
being brought on to manage all the
10:35
harvesting and the build-out of both the
10:37
nexus facility and the horizon facility
10:40
in Poland and it’s really a great story
10:42
and you’ll see if you see the YouTube
10:45
videos produced you’ll be able to see
10:46
his story and his mother’s story and
10:49
he’s worked for a very large harvesting
10:52
company that is focused on how to
10:56
properly harvest CBD what a lot of
10:59
people you know it’s like any new
11:01
industry you learn
11:02
as you make mistakes yes and you know
11:05
only max has made these mistakes and
11:07
they’ve learned how to harvest and
11:08
they’ve also learned how to dry the
11:13
material because CBD is quite delicate
11:15
and depending on how you harvest it and
11:18
how you dry it and how you store you’re
11:20
gonna have CBD degradation and what
11:22
Matthias has done for automatics and
11:24
when he’s going to do now for still Cana
11:25
is to manage that process and so we’re
11:28
very lucky to have him on board he sends
11:30
me pictures daily currently the Nexus
11:33
facility the floor has been laid and the
11:37
perd they’re putting up the structure
11:38
now and so we’re hoping to get the
11:42
facility up and running a little bit
11:44
sooner than the fourth quarter but we’re
11:46
thinking you know I’m pushing him hard

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1) The author of the Article, or members of the author’s immediate household or family, do not own any securities of the companies set forth in this Article. The author determined which companies would be included in this article based on my research and understanding of the sector.

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