CANNAINVESTOR Magazine U.S. Publicly Traded September 2018 | Page 221

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CCIM:…. alright … I know you touched on this already … and then on June 21st, you announced that “The Green Organic Dutchman Holdings Ltd. has decided to add a 287,245-square-foot purpose-built facility on its Valleyfield property capable of producing 40,000 kilograms of premium organic cannabis. This facility will be dedicated to TGOD's beverage division and increases the company's fully financed capacity to 170,000 kg” (click here for that that article). What immediately drew my attention were the following:

(1) “premium organic”;

(2) “purpose-built facility [with] fully financed capacity”, and

(3) “dedicated to TGOD’s beverage division”.

When one typically thinks of consumables, one does not usually think of “premium grade” inputs as part of a recipe. In the cannabis environment with a near homogenous product where advertising and traditional branding marketing is prohibited – is this cornerstone to your strategy for product differentiation?

TGOD: Organic inputs are one of the most important aspects to creating these higher margin products. Pesticides are not separated during the extraction process, so if you start with an organic input, we can eliminate all the post processing steps of removing any chemical pesticides used in the grow. The consumer is assured they’re consuming safe, certified, organic products. Not only that, but Organic is an internationally recognized brand in itself. We have seen a growing demand for organic products across all industries. The acquisition of Whole Foods by Amazon was a clear signal that organic is important to the consumer and is here to stay. We view cannabis as no different, consumers are more educated and focused on what they are putting into their bodies today more than ever. Organic is in our name for a reason, it is who we are, and it is the lifeblood of our entire organization from the soil up.

CCIM:ok … using “beer” simply for illustrative purposes … the cost of the ingredients (often just a handful of low cost commodities such as water, hops, barley, and yeast) may be pennies (if that) yet the finished product itself not only sells for significantly higher but also holds that price. Do you see that basic “finished product” principle applying to this industry?