World class extractions was developed on the foundation of a single step proprietary extraction process to produce CBD oil. The process is patent pending and can use the whole plant and is continuous flow. This allows large quantities of oil to be extracted at significantly lower costs.
When the subject of FSD comes up … it appears there is a lot of misinformation and/or confusion relating to your agreement with Auxly Cannabis Group Inc. Can you clearly and briefly explain the salient points of that agreement and how that agreement mitigates investor risk while simultaneously brining value?
So that streaming deal comes with Auxly Cannabis responsible to finance the build of FSD’s former Kraft facility In Cobourg Ontario. Auxly will effectively give us a turnkey operation to come into. Auxly’s management has much more experience as a team building facilities than we do and so they give us a turnkey solution to go into and operate under our license. The agreement breakdown is FSD Pharma keeps 50.1 percent of whatever product is left after our costs and our 10 percent is granted to us and then Auxly will get the other 49.9 percent. But no matter what in the world of what is a commodity and ultimately will end up being like growing tomatoes or cucumbers, we still are guaranteed a 10 percent margin no matter what. From an investor perspective this agreement ensures that FSD Pharma won’t have to raise money in the market to finance the cost of the facility build. It allows FSD Pharma to use its capital for partnership investments, employment, acquisitions, and remain debt free.
In all of the euphoria surrounding the industry since October 17th, smaller aspects seem to be overlooked … not by us, mind you … what is the current status of your Quebec presence and where is that heading?
FSD Pharma has a partnership and investment in Cannara Biotech Inc.
FSD Pharma will occupy over 105,000 square feet of Cannara’s 625,000 square foot facility, which sits on 27 acres of land and is located within a one-hour drive from Montreal. Cannara is under way in the application process under the ACMPR and plans to be the largest indoor cultivation facility in Quebec. Cannara also intends to have a focus on the pharmaceutical side of cannabis. We believed having a presence in Quebec is essential for having the lowest electricity cost in North America and being one of the largest consumers of recreational cannabis in Canada.
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