Interview with Darcy Bomford
CEO of True Leaf Medicine International Ltd.
A few weeks ago on July 21, True Leaf issued a press-release about taking the next step toward a medical marijuana producer licenced by Health Canada under its MMPR (Marihuana for Medical Purposes Regulations). Please inform us about the current status of your application, the state of the licencing market in Canada and why the recent contact with Health Canada is encouraging.
Darcy: We were a very early applicant and have worked dilligently since early 2013 to insure we complied with every Health Canada request. Our first application was actually approved, but disallowed because of municipal zoning issues. We immediately submitted another application in early 2014 and have sent in close to 1500 pages of documentation to fullfill every Health Canada request for information. We have a community that is 110% behind our project, we have an ideal location with room to expand our production and most importantly, we have a fantastic team that will make this all work. Health Canada has needed to deal with internal and external issues of their own which has certainly slowed things down, but I honestly believe we will ultimately be approved as a licensed producer.
As of March 15, 2015, there were 25 approved licensed applicants in Canada, 20 of which can sell product and 5 approved to cultivate only. From what we can ascertain, True Leafs application is among the 324 remaining of the total of 1284 applications received. A total of 934 applications have been rejected or withdrawn, translating into a 74% failure rate. If one looks at the pattern of approvals across the country, it appears Health Canada is approving applicants in relation to their geographic location and regional acceptance of medical marihuana.
This may work well for us, given that our province is known to be more liberal and there are currently no other companies approved in our geographic area.
Our most recent correspondence from Health Canada was short and indicated very few deficiencies - only five questions relating to the proposed site and physical security. These were answered in a 36 page response yesterday, in accordance with Health Canadas deadline. To date we have sent well over 2500 pages of documentation, so I suspect we should be moving past the enhanced screening and securirty clearance stage and moving closer to the pre-licensing inspection stage, which is the last stage before final license approval.
Ultimately, our timing may work well for us, the market appears to be developing slowly and a recent court ruling is now allowing licensed producers to sell Cannabis extracts in addition to dried leaf material. We can enter a more developed market with a clearer regulatory landscape, and benefit from standardized extract production which aligns with our business model and commands higher margins.
As having applied for a medical marijuana production licence already in mid-2013, True Leaf is not sitting around waiting for Health Canada but has focused on entering the pet foods market with a niche product, hemp-based pet supplements. In a July 16 press-release, True Leaf announced to have already started trial runs at a US production facility and to have secured a US distribution center to meet the expected demands of the US market. When can we expect the product launch and why is your professional background of essence in being a fast and successful entrant into this booming pet foods market?
Darcy: Surprisingly, incorporating Cannabis (in this case, the Hemp version) into beneficial products for pets has always been part of our master plan. Essentially, we are taking part of our long term strategy and moving it ahead while we wait for our federal approval for marihuana production. Accessing the pet industry now will allow us leverage our contacts and knowledge in the industry so we can develop our brand and generate revenue with less regulatory scrutiny. As we build consumer awareness and shelf space, we will be in a perfect position as Hemp and Cannabis become more accepted and the regulatory landscape evolves across the planet. We are working hard to launch our initial product line of functional hemp pet chews early this fall to the Canadian and US specialty pet market.
What kinds of products are you planning to sell and into which markets? What is so special about hemp-based pet supplements? Please explain the medicinal benefits of hemp for pets.
Darcy: Anyone who knows the pet food industry will understand that its all about the ingredients and Hemp is something that we saw as a potential novel ingredient years ago. Hemp has amazing characteritistics, but this member of the cannabis family has been largely ignored because of its naughty cousin: Marijuana. Hemp is entirely non-psychoactive but is known to have anti-inflammatory benefits, plus naturally-occuring antioxidants, cannabidiol and the optimal ratio of Omega 6 to Omega 3 fatty acids. We are creating a product line that incorporates hemp with other proven active ingredients that will be sold as functional chews....kind of like turbo-charged treats that support good health. Our goal is to market a full range of products that provide, antioxidant, joint and calming support that are legal for sale in pet stores across North America and ultimately Europe as well.
Can Canadian and US-based customers buy your products from an online shop of yours or only through distributors?
Darcy: We are focusing on traditional bricks and mortar distribution that incorporates stocking distributors that ship and sell products to speciatly pet retailers. Online and e-commerce sales will certainly be part of our strategy to build the brand, but we will be focusing our marketing on multipacks that are not available to our dealers. We expect our full ecommerce site to be operational by late fall 2015.
What can you tell us about the size and growth potential of this new health market focussed on pets in North America?
Darcy: Many people are surprised about the size of the pet industry when they really stop to notice it. Have a look in your supermarket the next time you are there and see how much space is devoted to pet products, you will be amazed. The pet industry in the US alone, almost tripled in size to over $60 billion in sales since 1996.
Valuations on companies in this space are very lucrative, with recent acquistions reflecting over 3X sales multiples as young innovative companies are purchased by multinationals and private equity firms. The functional food and natural health market are seeing even higher valuations (over 5x sales) as consumers seek out novel ingredients for themselves and their pets.
Our goal is to reach $30m in sales in 5 years and a valuation target of $100 million that is based on our target margins, brand strength and ability to diversify into medical cannabis extractions upon license approval for Canadian medical marijuana production.
You have been to some cannabis conferences and exhibitions in the last months, how was your pet story received by the audience and what can you tell us about competition in this niche market?
Darcy: We were blown away by the response at the exhibitions, it was fantastic to see such a reaction from everyone who came by our booth. What a great idea and This totally makes sense! were common reactions and it was great to see such validation from our peers. There is some competition on the market now (and more to come, Im sure), but I have yet to see anybody that has put together a product line that is professionaly designed, priced and positioned to be a success in this market. I think our experience is key and should give us a first-mover advantage to build a prominent brand in this space.
True Leaf has a prominent chairman, former BC premier and mayor of Vancouver, Mike Harcourt. Why do you think he is a valuable asset to True Leaf going forward with its pet foods business as well as becoming a licenced producer regulated by Health Canada?
Darcy: People may not agree with Mikes politics, but I havent met a person yet who didnt like him or admire his integrity. In this regard, he fits our mold perfectly he is a good guy that has always tried to do the right thing and treat everyone with respect. If we can follow that example as a team and a company, I will consider us a success! I dont believe Health Canada is giving preferential treatment to any applicant, but I do believe having Mike as a chairman hasnt hurt us either. We are essentially setting the bar high and striving to keep it that way with every new team member that comes on board.
Canada will have federal elections on October 19, 2015. What are the scenarios going forward in the regulated medical marijuana market in Canada? If the Conservative Party is not going to win, do you think Health Canada will be forced to change its MMPR? Is the upcoming federal election the reason why Health Canada has been so quite in the last months and not issuing any new MMPR licences?
Darcy: As I mentioned earlier, Health Canada has needed to deal with internal and external issues of their own, including the coming election and a court case that grandfathered in growers (now suppliers) from the old MMAR system.
I think finishing the election will bring some stability to the system and probably speed up approvals if the conservatives win. I believe that even they know the tide is turning and cannabis is here to stay. If they lose, I doubt any new party will throw out the MMPR altogether. At worst there may be a parallel legalized recreational system, but that model is failing in regions of the US.
Hopefully whoever wins has the sense to take a good inventory of what is working and what isnt, instead of trying to re-invent the wheel lets hope that cooler heads and common sense prevails.
Hemp for Pets: Should You Use It?
(By Dana Scott, Editor In Chief for Dogs Naturally Magazine)
Is your dog missing out on a great superfood?
You might be thinking, Hemp is a variety of cannabis, Im not giving that to my dog!
If you are, it would be too bad because hemp has many health promoting properties nearly every dog could use!
Hemp Is Not Marijuana
Lets get that out in the open right now!
Hemp is a variety of cannabis thats been safely used for years here in the US. It does contain a small amount of tetrahydrocannabinoids (THC) that makes marijuana well, marijuana, but it only contains 0.3% to 1.5% THC whereas marijuana contains 5% to 10% or more! So hemp will not cause your dog to have psychotropic reactions or a sudden craving for munchies!
And, since hes probably not smoking the hemp (I assume), hell reap the health benefits with few unwanted side effects!
Why I Think You Should Give Your Dog Hemp
Hemp is one of our oldest and most versatile plants, dating back to the 28th century BC.
Today, hemp is used in foods and even textiles, but were most interested in the hemp seed and the oil it produces.
Unlike fish oil, hemp seed oil contains the perfect ratio of Omega-6 (linoleum acid) to Omega-3 (alpha linolenic acid) fatty acids. These are essential fatty acids, meaning your dog cant produce them and needs to get them in his diet. A good balance of these Omega oils is critical to your dogs health because they work synergistically in the body.
Hemp seeds are also high in an essential Omega-6 fatty acid called gamma linolenic acid (GLA). Thats important because theres some really good reasons to boost the GLA in your dogs diet:
1. It Fights Cancer
Researchers at the American Cancer Society say theres evidence that people with cancer, diabetes and skin allergies dont make enough GLA and these issues are incredibly common in dogs too. While GLA is considered a conditionally essential fatty acid (which means that most dogs can make enough of it, most of the time), there are many circumstances (hard exercise or stress) where dogs cant make enough GLA and supplementing can become important.
The THC in hemp seeds have also been found to stop brain cancer (British Journal of Cancer), improve breast cancer (Breast Cancer Research and Treatment) and lung cancer. Finally, because the GLA is perfectly balanced with Omega-3 fats, hemp seed oil will help reduce inflammation in your dog and strengthen the immune system.
2. It Reduces Joint Pain
Researchers in the Journal of Arthritis and Rheumatology found that the GLA found in hemp seeds reduced arthritis symptoms by 25% compared to the placebo at 4%. Once again, this is because the perfect balance of fatty acids helps to reduce inflammation naturally.
3. It Improves Skin And Coat
Hemp seed has long been used in cosmetic products and soaps because the oil can penetrate the inner layers of the skin and promote healthy cellular growth.
The balanced fatty acids also play an important role in reducing the inflammation associated with common skin issues, including atopic dermatitis, pruritic skin disease and granulomas.
How Hemp Seed Oil Works
Your dog has substances in his body called prostaglandins. These are like hormones and they circulate around the body, helping to smooth muscle contractions, control inflammation, regulate the body temperature and other vital functions.
The GLA thats abundant in hemp seed is a building block for prostaglandins. Researchers are looking at GLA supplementation today as an important component of proper hormone health and development.
Before you start adding hemp oil to your dogs meals, theres a couple of things you should first know.
Hemp seed oil is a polyunsaturated fat, which means the oil is unstable. If you cook your dogs food, you wont want to add hemp seed oil to the food while cooking as this can cause the oil to become rancid and cause health issues in your dog.
In addition, if your dog is eating a poultry-based diet, adding hemp seed oil may cause an imbalance in his diet because chicken is already quite high in polyunsaturated fats and linoleic acid. According to Steve Brown, author of Unlocking the Canine Ancestral Diet, flaxseed oil is a better choice for chicken-based diets.
But if your dog is eating a diet rich in beef and other ruminants, then hemp seed oil is a great way to balance the diet, alongside your dogs regular fish or fish oil.
How Much To Give
So weve established that giving your dog hemp seed oil whenever you give him red meat is an excellent boost to his health. So how much should you give?
Steve Brown recommends adding a teaspoon for every 1 to 1 1/4 pounds of food.
Cannabis sativa actually meansuseful hemp in Latin. Try adding some to your dogs diet and learn why this ancient superfood is making such a huge comeback!
About Dana Scott
Dana Scott is Editor In Chief for Dogs Naturally Magazine. She also breeds Labrador Retrievers under the Fallriver prefix and has been a raw feeding, natural rearing breeder since the 90s. She is an advocate for natural health care for dogs and people and works tirelessly to educate pet owners so they can influence veterinary medicine and change current vaccine, food and preventive health practices. Google+
Benefits of Hemp
Hemp ingredients give unique added value to natural pet foods and pet treats. They offer genuine category extension and point of difference.
Hemp is natural, free from all allergens including soya, lactose and wheat.
Hemp ingredients are an excellent source of Oil, Protein and Dietary Fibre and highly relevant to natural pet foods and natural pet treats. Key to the content of all hemp ingredients is the uniquely healthy oil.
Benefits of Feeding Oils to Pets
Dietary fats are required both as a source of energy and as a source of the essential fatty acids Omega 3 and Omega 6, which are not synthesised by the body. Together, Omega 3 and Omega 6 play a crucial role in pet health.
Deficiencies in Omega 3 and Omega 6 can lead to:
- Reduced Growth
- Compromised Immunity
- Poor Joint Health
- Increased risk of Cardiovascular Disease
Correct levels of Omega 3 and Omega 6 lead to:
- Healthy Skin
- Healthy Coat
- Healthy Joints
- Good Fertility
- Healthy Immune System
- Good Growth and Development
Significance of Composition of Oils
The balance of Omega 3 to Omega 6 in the diet is important. There is a complex interaction between these Essential Fatty Acids (EFAs) including a competition for enzymes controlling the metabolic pathways between these two groups of fats.
Too much of one fatty acid can stop the formation of the other fatty acid. Too much Omega 6 inhibits the formation of Omega 3. For example, Diets including soya oil, sunflower oil or olive oil can lead to too much Omega 6.
Too much Omega 6 leads to:
- Negative Cardiovascular effects
- Inflammatory effects
Correct levels of Omega 3 lead to:
- Beneficial Cardiovascular effects
- Anti-inflamatory effects
- Beneficial Neurological effects
- Beneficial Reproductive effects
Benefits of Hemp Oil in Pet Foods
Hempseed oil is cold pressed from seed at temperatures below 38ºC and unlike commonly used oils in pet nutrition is not chemically refined or treated in any way. It has none of the odours or toxins and dioxins often occurring in fish oils. And hemp provides a perfect balance of Essential Fatty Acids naturally with none of the compromises of synthesised oils.
Compared to other oils, hemp oil contains:
- The highest level of polyunsaturated fats;
- One of the Lowest levels of Saturated fats;
- Optimal ratio of Omega 3 to Omega 6 at 3;
- A rich source of Omega 3 and Omega 6;
- High amounts of ?-linolenic acid and stearidonic acid, the biologic metabolites of LA and ALA, respectively, which none of the other commonly utilised vegetable oils contain. Therefore, due to metabolic competition between the two EFAs for access to the ?-6 desaturase to convert LA and ALA to ?-linolenic acid (GLA) and stearidonic acid (SDA), respectively, the presence of both GLA and SDA in hempseed oil allows this enzymatic step with ?-6-desaturase to be efficiently by- passed.
Hemp Oil provides added value in Natural Pet Foods because it is:
- Highly palatable;
- Very efficient source of dietary energy:
- Contains unique forms of Omega 3 & Omega 6 in the most efficient form to metabolise of any plant oil;
- Free from the smell and toxins of fish oils;
- Free from all allergens;
- Free from GMO;
- Delivers correct ration of Omega 3 and Omega 6 without causing imbalance;
- Helps reduce risk of cardiovascular disease;
- Completely traceable.
True Leaf Medicine is focussing on the development, production and sale of hemp-based pet products. While the potential of this new revenue source has been identified by management and appropiate measures are pursued at the moment, the company continues to work with Health Canada to receive a licence for the production of cannabis for humans medical purposes.
With 30 years experience in the pet nutrition market, True Leafs CEO, Darcy Bomford, sees a natural fit for his company to combine its current focus with products for pets as a natural extension of the mission to provide customers with enhanced quality of life. As per its April 8 press-release, True Leaf is planning to enter the pet foods sector in the fall of 2015. True Leafs CEO, Darcy Bomford, commented as follows:
At True Leaf we are dedicated to improving wellness and quality of life. Given our management teams skills and background, and the steadily building market focus on value-added products around the cannabis sector, we find the pet industry to be both a perfect fit and an untapped niche market. There is a gap in the market for products that offer pets a better quality of life and hemp proteins and hemp seed oils offer genuine potential in this well-established space.
Consumer demand for pet food, health and wellness products, grooming and pet related accessories is growing at a rate of 4% annually. The overall market in Canada for pet related items is expected to grow to $8.3 billion by 2018. True Leafs management sees products that are most compatible with the companys mission in nutraceutical pet chews and supplements for the support of good pet health.
True Leaf is active developing marketable products that can be sold immediately generating cash flow as the regulations for hemp-based products (without THC) are not as strict as being the case with THC-rich products, for which a licence is necessary.
Appropiate newsflow during the next weeks is expected to have a positive impact on True Leafs market valuation as only few publicly listed companies, which aim at establishing themselves in Canadas medical marijuana market, have a focus on the hemp-based pet food industry.
This may turn out as a company-making event for True Leaf generating regular cash-flow, whereas the company represents the potential to penetrate this market as one of the very first and advancing to a market leader in this growing health segment. Rockstone will closely follow True Leafs corporate developments and provide updates in due course.
Shares Issued & Outstanding: 37,956,663
Market Capitalization: $3,416,100 CAD (2,581,085 EUR)
Shares Reserved for Issuance: 7,662,327
Current Share Price: $0.09 CAD (0.068 EUR)
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Research #4 “One Step Closer Becoming A Licenced Medical Marijuana Producer“ (July 21, 2015)
Research #3 “True Leaf on its way to production“ (May 6, 2015)
Research #2 “True Leaf To Enter The Pet Food Market With Hemp Products In Fall of 2015“ (April 9, 2015)
Research #1 “True Leaf Medicine International Ltd. Goes Public“ (February 9, 2015)
Please read the full disclaimer within the full research report available as a PDF (here) as conflicts of interest exist.