Dear Next Green Wave Shareholders,
Thank you for your continued support and loyal following in Next Green Wave. As a young public company, we continue to demonstrate the energy, drive and passion of a “start-up” that is influenced by our strong values and long-term vision. With the groundwork now in place, we anticipate 2019 to be a significant year as we begin to generate revenue, launch products, and continue to serve a larger role in the California premium cannabis space —both as an authorized producer and distributor of major brands and labels.
We are part of a fast-growing and highly competitive industry and need to stay ahead of the curve to provide customers with a superior experience and product. As such, we are continually evaluating our priorities and best practices to seize opportunities and overcome the challenges that arise in this new marketspace.
How do we build a resilient brand and product portfolio? How do we tune out the noise and prepare for the long term? We believe that having the systems in place to adopt and innovate quickly differentiate us from the rest and enable us to serve clients, inspire employees and deliver value to shareholders.
“Next Green Wave’s mission is to unlock the full potential of the cannabis plant, in ways that cater to all industries and individuals around the world.”
Over the next three years, Next Green Wave will strive to become a top tier cannabis brand in California through our infrastructure, acquisitions and the targets we have set in the premium recreational segment. In March we accelerated our value proposition through the acquisition of SD Cannabis (“SDC”) and will now direct our efforts to build out a world-class nursery in collaboration with Intrexon.
In this update, we share the highlights of our performance, our notable achievements since going public in October of 2018 and our aspirations for the year to come.
In closing, the Board remains diligent and is also confident it has the right business model and the right objectives for successful execution, drive growth and to create stakeholder value. With that, we have the opportunity to shape the future of our emerging industry and to unlock the full potential of the cannabis plant.
Executive Chairman and Chief Executive Officer
Commencement of Cannabis Production at Facility – Site A
In late April, we began our breeding program to build up our nursery stock to populate our 14 grow rooms over the next couple months. When we reach our optimal production schedule, the garden crew will harvest two grow rooms every 10-14 days ensuring a constant supply to our vendors. The full cycle from seedling to sale is anticipated to take about four months. Revenue from the cultivation process is expected to take place in Q3.
In early April 2019, our HR department hosted a 2-day offsite on-boarding that focused on company alignment and culture building with the entire Facility A team and officials from the City of Coalinga. Their participation energized and encouraged the team to be not only valuable employees, but valuable members of the community at large.
In early May 2019, we implemented our automated Track and Trace Compliance System (“Trellis”). This involved the Trellis Executive Team to be on-site and oversee a successful on-boarding and implementation with our COO, VP Finance, Compliance Officer and Gardener’s.
We are on track for the full retrofit and activation of our 3,240 square foot Facility C in late Q2, which will be used for our non-volatile extraction activities. Facility C will also be used for research and development and we are excited about the prospect of working with other partners to bring new cultivars and product lines to the cannabis space through this facility. We have received all conditional use permits related to Facility C and submitted our application license for both volatile and non-volatile extraction activities with the State of California (California Department of Public Health) in Early May.
Our Vision to be Number 1 in Cannabis Consumer Product Goods in California
Next Green Wave is now focused on integrating SDC’s 8 brands, 45 THC and CBD products, extraction and manufacturing team while calibrating its recently completed 35,000 sq. ft Facility A. We have now integrated SDC’s extraction and manufacturing expertise into our facilities and are currently fitting out Facility C which will house the company’s extraction business.
In the coming months, our Brand Partners product lines will be introduced into the California and online direct-to-consumer market in the United States. With a combined social media reach of over 25 million across the globe, these Brand Partners include;
View on Instagram ( 969k Followers )
Loki the Wolf Dog
View on Instagram ( 2 Million Followers )
View on Instagram ( 383k Followers )
View on Instagram ( 235k Followers )
View on Instagram ( 85.7k Followers )
Toy Machine Skateboard Co
View on Instagram ( 628k Followers )
Thorn St. Beer
View on Instagram ( 28.4k Followers )
View the Loki Love Biscuits Online Commercial:
Quick visual of some of our brand partners:
Building a World-Class Nursery with Intrexon (XON:NASDAQ)
The implementation of Intrexon’s next generation (non-GMO) tissue culture platform, Botticelli™ began in Q1 and as part of the first phase of the project, the companies will calibrate this technology specifically to Next Green Wave’s cannabis cultivars toward rapid and sustainable cannabis plantlet production.
The Botticelli™ platform is an advanced tissue culture technology designed to enable efficient propagation of plants while maintaining genetic purity and product performance. When applied to cannabis, Botticelli™ offers potential for a sustainable, scalable, and more economical solution than conventional clones.
The objective of this optimization phase will be to demonstrate that Botticelli™ will allow for cost-effective cannabis plantlet production compared to the traditional clones that are currently available in today’s market.
This will offer the cannabis market several advantages:
- Rapid multiplication of proprietary lines in smaller areas;
- Reduction or potential elimination of mother rooms;
- Substantially decreased cutting load on the mother plants ensuring genetic purity and product performance;
- Reduced phytosanitary risk and superior product performance;
- A more integrated production system and shorter time to vegetation room; ex., reduction or elimination for vegetative acclimatization step; and
- Capital efficiencies.
In 2019, Next Green Wave and Intrexon will work together to achieve the following key project deliverables;
Quarter 1 Utilize Next Green Wave’s hemp CBD strains as a proxy to optimize standard operating procedure at Intrexon’s Davis, California facility.
Quarter 2 Intrexon to complete tissue culture lab build out at Next Green Wave’s 3,240 sq. ft Facility C.
Quarter 3 Intrexon becomes operational at Next Green Wave’s 3,240 sq. ft Facility C. Tissue culture lab ready and operational.
Quarter 4 Optimization of Botticelli™ SOP to 10 Next Green Wave THC cultivars ready for scale-up production and commercialization in 2020.
International Expansion Through Brand Licensing Opportunities
As the global cannabis landscape continues expand in 2019, Next Green Wave will take advantage of specific international markets that will allow our brands and products to be licensed through other respectable international partners. In February we closed the investment and strategic partnership with Organic Medical Growth (“OMG”) which will see our distribution channel expand by over 7,000 pharmacies in Colombia through a brand licensing agreement with OMG.
To ensure that OMG goes to market with a premium product, we will be providing expertise and services to ensure that OMG’s nursery, cultivation and extraction techniques are of the highest standard. These services have begun, and we expect that in 2019, a range of our brands will be selling into Colombia and on a path to generating revenues. In May, we recently did our first site visit to OMG’s facilities.
OMG is expecting to go public in Canada in late 2019 with Next Green Wave having a 10% equity ownership post its first initial public offering financing round and the option to purchase up to another 5% of the company post its first initial public offering financing round.
Financed to Accelerate Rapid Growth
We recently closed a $6M convertible note offering which provides two $3M tranches. The 2nd tranche will be delivered at the sole discretion of Next Green Wave without any obligation to give the financial flexibility to execute our growth strategy while continuing to maintain and protect shareholder value.
Proceeds of the Offering will be used for the acceleration and rollout of Next Green Waves’ brands and products throughout California in 2019.
Shareholder Value through Revenue
Now that we have become a licensed cannabis producer in California and commenced the integration of the SD Cannabis acquisition (“SDC”), we anticipate strong output, and more importantly, synergies from our Cultivation Facility (“Site A”) and our Extraction Facility (“Site C”).
The monthly output is expected to be 650 to 750 lb’s per month of premium flower from Facility A and 110 to 120 kg’s per month of extracted oil from Facility -Site C.
Our SDC brand partnerships and products are expected to sell approximately 30,000 units per month with full market activation in 2019.
Next Green Wave’s Rejuvenated Brand & New Website Launch
We are in the final stages of refreshing our company’s brand and visual identity and will be sharing the details of this with you by the end of May. With a focus on innovative and open lines of communication with our stakeholders, we have also launched an entirely new website that provides a far more in-depth look at our brand portfolio, facilities, partners and our overall business. www.nextgreenwave.com.
With a desire to elevate life’s moments for our industry, stakeholders and consumers, we are looking beyond just the product to create a more personal lifestyle connection with our communities. You can also catch the action in real time through our Twitter, Facebook and Instagram accounts @nextgreenwave.
The Opportunity Ahead in 2019
Next Green Wave continues to remain focused to ensure that we meet our key milestones and expectations of all stakeholders in 2019. In line with our strategic plan, in 2019 we will also be focused on delivering in the following key areas;
- Activating our nursery business to develop world-class hybrid cannabis strains for direct retail and wholesale;
- Achieving full operation capabilities of our flagship 35,000 sq. ft Facility “Site A”;
- Activation of our extraction facility in late Q2 to begin producing oils, tinctures, and extracts for custom vaporizer products;
- Securing our distribution network into California through our SD Cannabis brand acquisition and the roll out of 8 more brands and 43 products with influential branding partners;
- Obtaining access into international markets through investments in licensed cultivators and distributors such as OMG;
- Establishing research and innovation amenities and procedures for continued product and branding development.
The Company also wishes to announce that David Wilson has resigned as a Director of the Company. The Company thanks Mr. Wilson for his dedication and commitment and wishes him well in his future endeavours.