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RavenQuest BioMed (RQB) (RVVQF) is a Canadian cannabis producer that is in the middle of a major expansion with facilities located in Ontario and Alberta. The company represents a differentiated opportunity due to the research partnership with Montreal's McGill University and the relationships with Indigenous communities.
Through organic and inorganic growth initiatives, RavenQuest is laser focused on growth and we are bullish on this. When compared to its peers, RavenQuest is undervalued and we are favorable on this due to the compelling fundamental story. Over the next year, we expect RavenQuest to significantly increase its reach and believe that this is a stock to watch.
RavenQuest: An Emerging Growth Story
RavenQuest is in the middle of a major expansion and once construction is complete, the company will able to produce approx. 51,000 kilograms a year. The existing properties offer significant room to expand and this is an important aspect of the story.
Canada’s recreational cannabis market opened on October 17th and we expect to see very strong demand from consumers. Although most Canadian cannabis producers are focused on increasing production capacity, this product will not hit the market until mid-2019 and we expect this market to be very undersupplied.
This creates a significant opportunity for companies like RavenQuest and we are favorable on this. Once construction is completed, RavenQuest will be well positioned to capitalize on an undersupplied market and this is something to watch. Although RavenQuest will not be a major producer early on, we are favorable on the growth trajectory. By the end of 2018, RavenQuest expects to be producing approx. 11,000 kilograms on an annual basis and will be able to capitalize on a market shortage.
RavenQuest has several levers for growth and this is an exciting aspect of the story. The management team has been working tirelessly, making sure that the company will hit its targets and projections. We are favorable on the management team’s ability to execute and will be monitoring this one.
Releases Two Flagship Brands for Canada’s Recreational Market
In early October, RavenQuest released two distinct flagship brands, both of which will be available to the public under Canada’s legalized adult recreational framework which begins October 17th. Throughout its brand development, RavenQuest has remained engaged with Victims of Advertising (VOA), gaining in-depth understanding of their target markets and creating brands that appeal to consumer segments.
The first flagship brand, Lore Cannabis, is a luxury offering aimed at a discerning female audience in the 30+ demographic. The Lore cannabis concept is rooted in their innate desire as humans to “Tell Your Story”, to create new stories, and to connect with those around us through the sharing of our stories.
The second flagship brand, Bloomera, is a clean, simple and accessible offering aimed at males aged 30+ who seek out products in their lives that do what they’re supposed to do and brands that deliver on their promise.
Both Lore and Bloomera cannabis will become available to the adult recreational market, initially through our supply MOU with the British Columbia Liquor Distribution Branch (BCLDB) and across Canada shortly thereafter.
This is a significant development and enhances the company’s position in Canada’s recreational market. We are favorable on this strategy of reaching specific consumers and expect to see the products gain traction.
Focused on Helping Indigenous Communities
One of the ways that RavenQuest has been able to differentiate itself from the competition is by working with Indigenous communities in Canada. The company sees this as a major opportunity and plans establish partnerships and engagements with unique Indigenous communities in the months ahead.
Last month, RavenQuest entered into a services agreement with Alexander First Nation to develop a Health Canada cannabis license application. Alexander First Nation is located adjacent to the Edmonton Metropolitan Region and plans to build a cannabis facility on its sovereign land.
RavenQuest has been one of the only companies to focus on this aspect of the cannabis industry and see this as a significant potential value driver. Last year, RavenQuest signed an agreement with Fort McMurray First Nation #468 to build a 24,000 sq. ft. facility and has been executing on this opportunity as construction has begun.
The relationship with Fort McMurray First Nation #468 provided RavenQuest with an opportunity to make a name for itself and has been executing flawlessly. This has opened the company up to new opportunities such as the one with Alexander First Nation and we are bullish on this aspect of the story.
Well Capitalized and Well Positioned to Execute
RavenQuest represents a multi-faceted growth opportunity and is led by a management team with a proven track record of success. If you attended the MoneyShow’s Cannabis Investing Event or watch it online, you will be able to hear from CEO George Robinson and believe this will help investors better understand this opportunity.
We met with CEO George Robinson in San Francisco and were very impressed with what he has been able to accomplish. RavenQuest has several levers for growth and we are closely watching how the team executes. Over the next year, we expect RavenQuest to make some significant announcements as the company continues to advance its fundamental story.
RavenQuest is well capitalized after recently completing an oversubscribed non-brokered private placement. There are no short term capital requirements for the company at this point, RavenQuest is well positioned to execute and this is a company to watch.
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