HIGHLIGHTS
- The Vancouver Island company is run by Renee M. Gagnon, who started Emerald Health.
- HollyWeed intends to focus on white label manufacturing as well as in-house medical products
- Company to run both ethanol and CO2 extraction machines.
HollyWeed North Cannabis Inc., a private cannabis company run by industry pioneer Renee M. Gagnon, has signed a multi-year extraction and processing agreement with Canopy Growth Corp.
It’s the first significant deal for the Vancouver Island company, whose extraction-focused subsidiary HollyWeed Manufacturing & Extracts Inc. received a dealer’s license last June.
“We wanted to go out the door with a bang, as opposed to, ‘hey we sold some t-shirts.’ This is a pretty big significant walk out the door, and it gives us the credibility to say there will be more deals,” said Ms. Gagnon, the company’s CEO.
HollyWeed does not grow cannabis. Instead, the company intends to focus on extraction and product manufacturing in its 25,000-square foot facility about an hour’s drive northwest of Victoria.
"We're white label co-manufacturers. So other licensed producers, if they want to send us their cannabis, we'll extract it, turn it into other products, put their logos on it, and send back what they want," said Ms. Gagnon.
In addition to contract extraction and manufacturing, HollyWeed intends to source cannabis for its own products, with a focus on the medical market.
"Extraction is the first stage before we create the base for our manufactured goods. Either way we needed that stage within our organization. We've just elected to offer it as a subsidiary service for other parties as well,” she said.
The company plans to run both ethanol and CO2 extraction machines, “depending on the needs of the client.”
“I can’t speak to the exact specifics of this particular deal, but in general, our first line of processing will be super-cooled alcohol, ethanol,” said Ms. Gagnon. “We are going to be offering CO2 later in our extraction cycle, hopefully later this fall, because it provides certain large-scale advantages that alcohol doesn’t.”
Until Wednesday’s announcement from Canopy, HollyWeed was flying largely under the radar. Ms. Gagnon herself, however, is well known in the cannabis community.
In 2013, she founded Thunderbird Biomedical Inc., the fifth company in Canada to receive a license under the MMPR system. Thunderbird changed its name to Emerald Health in 2015, and is now among the largest licensed producers in the country.
"I've been through four [federal cannabis] programs in Canada now... and I'm known to the other licensed producers. So when we started this, it was fairly easy to start the conversation with Canopy," she said.
After leaving Thunderbird in 2014, Ms. Gagnon spent several years in the United States. On her return to Canada, the best way back into the industry was through an extraction and manufacturing play.
"I spent three years cruising Vancouver Island looking for a property, and this was it. This was the one place on Vancouver Island I could get the zoning, it hadn't be used for plants or a grow-op before, hadn't been used for chemical storage, you didn't see logging equipment, and it was the same size, basically, as Tilray's facility in Nanaimo. That gave me the starting point that I needed for my story,” she said.
HollyWeed has raised money privately, largely from people who got rich on the Thunderbird/Emerald play, Ms. Gagnon said. Last August, the company announced its intention to go public on the TSX-Venture Exchange via the reverse takeover of a shell called Navion Capital Inc.
“We anticipate that this [Canopy] transaction qualifies us to begin the process of the RTO… We figured rather than the traditional route of going public with no revenue or idea of when you’re getting it, we thought we’d start with a contract with Canopy,” said Ms. Gagnon.
Mark Rendell