CIM: What valuations or multiples are you seeing in the market regarding retail acquisitions? For example 3 or 4 times revenue?
CC: There still seems to be a wide range in what people are willing to pay for retail. We believe this a result of speculating on future retail availability. Each province has its own regulation and processes surrounding the granting of retail licenses. Provinces that are more restrictive, such as Ontario, will find buyers willing to pay a premium to acquire quality locations. We also saw this in Alberta, however, Alberta has recently decided to give its market more freedom to regulate itself by drastically increasing the number of licenses to the point where there is effectively no queue for retail applicants. We expect that over time the retail market will settle and higher valuations will be given to locations with proven, consistent cash-flows, while locations still requiring a license or that only have a development permit, will see much lower valuations.
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CIM: When do you expect to start seeing revenue?
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CC: We anticipate that INDICAtive Collection will be open in October 2019 ready to serve its customers high quality cannabis products and accessories. In addition, Stigma Grow has received positive results for the testing of its second test lot and is in the process of updating its existing sales license to include dried flower. This will allow us to sell product to AGLC for distribution on to retailers. As the company goes through the amendment process, we are currently growing cannabis at capacity in our facility and are building inventory that we expect to be sold to AGLC in the fourth quarter of 2019.
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CIM: How do you plan on maintaining and increasing margins? Are you seeing price contractions in the market?
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