Westleaf Inc. has executed a term sheet with Xabis Inc., whereby Xabis has agreed, subject to execution of a definitive agreement, to provide expertise to the Company’s Calgary cannabis extraction and production facility. The facility formerly known as Delta West, will be rebranded The Plant by Westleaf Labs after Westleaf consolidated its interest in The Plant to 100%. Provided Health Canada issues the applicable license for The Plant, the extraction and production facility under construction in south east Calgary is expected to produce cannabis derivative products and, after legalization of such products which is expected later this year, consumables, topicals and other cannabis infused products, subject to and in compliance with provincial and federal regulations.
Xabis is a Colorado-based cannabis processing company which provides turnkey operations for companies in the mid-stream of the cannabis industry. With more than 150 years of collective experience, Xabis’s team of PHDs and scientists manage, what in Westleaf’s view, is the most technically difficult processes in the cannabis life-cycle, all aspects of the extraction and manufacturing of cannabis infused products.
- Tapping into Industry Leading Expertise – Xabis is an industry leader in design, construction and management of cannabis extraction and manufacturing facilities, as well as product development:
- Xabis has run facilities in various states in the US for a total of 8 years of cumulative operating experience; and
- Xabis has developed more than two dozen different form factors (delivery systems such as vape pens etc.) and concentrate types with more than two hundred individual product SKUs, including oil based oral solutions, gummy edibles, hard pressed tablets, water soluble powders, oil-based capsules, body melt capsules and suppositories.
- Focus on High Margin Products – Upon legalization of the broader set of derivative cannabis products, Westleaf believes a diversified offering of derivative cannabis products will account for the majority of consumer demand. Westleaf is focused on differentiated product formulations to produce vape cartridges, edibles, beverages, and topicals to meet this expected demand in accordance with applicable regulations.
- Developing Products for the Global Market – The Plant is being built to EU Good Manufacturing Process (GMP) specifications to ensure compliance regulations in Canada (one of the largest emerging cannabis markets), and for export capabilities. Strategically located in Calgary, the facility is not only in the largest retail market in the prairies, but also has easy access to transportation services to the rest of Canada and to global markets.
- Scalability – The Plant includes an approximately 60,000 square foot complex with Phase I (~15,000 sq. ft.) designed to include R&D, processing, extraction, manufacturing and order fulfillment. Construction is expected to be complete in summer 2019. It is anticipated that the facility will be capable of producing the full suite of new derivative product lines in preparation of Health Canada’s anticipated legalization of derivative and consumable products, expected to occur on October 17, 2019.
- Multiple Revenue Streams – The Plant is designed to produce a diversified offering of cannabis derivative products under Westleaf’s brand portfolio. Additionally, Westleaf plans to offer white labeling services to produce finished products for third parties, as well as contract manufacturing services for raw extract and distillation.
- Truly Vertically Integrated Company – Westleaf is one of the few truly vertically integrated companies in the Canadian cannabis industry, with assets owned and under development across each vertical of the business, including cultivation, extraction, processing & manufacturing, distribution and wholly owned retail. Westleaf believes that being vertically integrated provides significant optionality and defensively positions the company to protect margins across the life cycle of the industry.
“We are entirely focused on the plant-to-product portion of the value chain,” explained Dale Zink, CEO of Xabis. “From the end of the grow to the final processed product shipping out to the retail store or dispensary, we apply our expertise to help companies create the industry’s best and most profitable processes and systems.” Zink leads a group of PHDs with extensive experience in biotechnology and chemical engineering, including experience in the extraction industry, the pharmaceutical industry and academia.
The move by Xabis into the Canadian market under an exclusive relationship with Westleaf is the company’s first foray into the largest single legalized recreational market. Xabis has designed, built, and operated facilities in five (5) US states where medical or recreational cannabis has been legalized.
“This partnership is another part of the execution on Westleaf’s strategy of becoming a significant vertically integrated player in the Canadian cannabis industry,” said Scott Hurd, President and CEO of Westleaf. “We believe a diversified offering of derivative cannabis products will account for a major shift in consumer demand once legal. We are positioning to formulate unique, high quality derivative products and bring in the best minds in the industry to help leverage our expertise in building and running these types of facilities.”
The Brand Story
The Plant derives its name from the origin story of the company: a plant is not just a source of life; at Westleaf, it’s our source of inspiration. Not only nature’s ideal version of growth, to us, it’s also a place of progress and production. A place to press forward. To build on our foundation, extract our most potent ideas, and to optimize everything we do. It’s not where we cultivate, it’s where we innovate. In order to ensure we provide the absolute best our country has to offer and fulfill our mandate to be at the forefront of cannabis research, development and technology. This is our place of constant growth.