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$SNNVF Vertically Integrated Structure Strengthened by Several Subsidiaries

  • Operating in world’s two largest cannabis markets – California and Canada
  • Vertically integrated structure extracts value along the supply chain
  • Pre-production sales strategy mitigates risk

What can you give a company, like Vancouver, British Columbia-based Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF), that seems to have everything? For starters, this vertically-integrated producer of medical and recreational cannabis has a presence in California and Canada, the world’s two largest cannabis markets. Through several wholly-owned subsidiaries, it has operations in cannabis grow facilities, cannabis extraction facilities, medical cannabis clinics and the cannabis white label business. Moreover, a large part of its estimated total output for the next two years has already been sold as pre-production, even before the completion of grow facilities – a sure signal of customer trust. Even though its grow activities are yet to make a contribution, Sunniva is already generating revenue. With all that in place, this is a company whose future looks as bright as its name, which is derived from an old English word meaning ‘gift of the sun’.

Sunniva is into large-scale low-cost production. Through subsidiary CP Logistics, the company is close to completing a cGMP-compliant greenhouse facility in Cathedral City, California, that will have an estimated annual output cannabis capacity of 100,000 kilos. cGMP (current Good Manufacturing Practice) regulations are mandated by the U.S. Food and Drug Administration (FDA) to ensure proper design, monitoring and control of manufacturing processes and facilities. Phase 1 of the project involves the development of a 325,000 square foot greenhouse capable of producing 60,000 kilos per year of dry cannabis at capacity with operations commencing in Q4 2018. Approximately 30 percent of initial production has been committed for conversion to oils and extracts. Phase 2 is expected to increase the greenhouse space by 164,000 square feet and increase output capacity by some 40,000 kilos per year.

The location and design choices were made with a focus on low-cost production in mind. The abundant sunlight in California will reduce energy costs, while the highly automated operations will ensure the most efficient production processes are employed. In California also, close to its Cathedral City Campus, Sunniva is operating an extraction facility, through subsidiary CP Logistics. The Sun Oil extraction facility, which has an oils and extracts manufacturing license, is currently being upgraded with additional equipment (http://nnw.fm/o6mFk).

Furthermore, Sunniva recently broke ground at a recently acquired facility, in Canada, with similar production capacity, and work is now continuing at that 126-acre site in Okanagan Falls, British Columbia. The 740,000 square foot facility will have an estimated output capacity of 100,000 kilos annually and is expected to become operational in Q1 2019. About 75 percent of its output will be pre-sold on a wholesale basis (http://nnw.fm/x5YQd).

Natural Health Services Ltd. is a network of medical cannabis clinics in Canada that offers patients access to medical practitioners specializing in the endocannabinoid system. This Sunniva subsidiary also connects patients with licensed producers through its SPARK proprietary software system, allowing Sunniva to capture revenue from patient purchases. As soon as the facilities become operational, Sunniva intends to start marketing its own produced cannabis  The network currently has over 95,000 patients (over one-third of all Canadian medical cannabis patients), and it has agreements in place with 27 licensed producers.

Sunniva’s seed-to-sale, vertically integrated structure is also bolstered by its Full Scale Distributers (FSD) subsidiary, which markets vaporizers and accessories under the Vapor Connoisseur brand. FSD also provides white label packaging and labelling services to over 80 brands in North America, making it a clear leader in the space. It will design custom vapor hardware for any specification of cannabis oil or concentrate. Now, with the addition of the Sun Oil Facility, customers can also have their extraction and processing done; cartridges can be filled, assembled, labeled and packaged according to their own standards and branding, as well as shipped to their final destinations.

The company recently announced voting results of the Annual General and Special Meeting of Shareholders held on June 27, 2018 (http://nnw.fm/y23GS).

For more information, visit the company’s website at www.sunniva.com

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Wednesday, July 25th, 2018 Uncategorized
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