In his influential 1949 book: The Organization of Behavior, Canadian psychologist Donald Hebb theorized that “one thought is more likely to trigger another thought” if those two thoughts are linked together multiple times in the past.
This concept has been employed to good effect in the world of branding.
When a Bronx, NY ice-cream manufacturer realised Americans associate Europe with delicious ice cream – it launched Häagen-Dazs – with those impudent umlauts (double dots) hovering over the first “a”.
Häagen-Dazs was more American than Harley-Davidson (HOG.NYSE) – but once that European association was made – it stuck.
The retail concept behind Westleaf’s (WL.V) Prairie Records acknowledges the nostalgic link between music and cannabis.
Hurd accepts that the current Canadian cannabis marketing regulations make it almost impossible to create powerful retail brands. He’s bypassing that by creating a strong brand association between the customer and the store (rather than the product).
In a recent excellent interview with The Midas Letter, the interviewer James West blurted out: “Nine times out of ten when I went to a record store as a young person, I was high!”
“I first heard about the Prairie Records cannabis retail business model mid last year,” wrote Equity Guru’s Chris Parry, “And my first thought upon seeing it was, this will never be allowed. But here we are, and the first Prairie Records store actually exists now.”
On March 18, 2019, Westleaf (WL.V) announced the execution of a term sheet with a Colorado-based cannabis processing company, Xabis, whereby Xabis will lend expertise to WL’s Calgary cannabis extraction and production facility.
Xabis provides turnkey operations for companies in “the mid-stream of the cannabis industry”. Its team of PHDs and scientists manage all aspects of the extraction and manufacturing of cannabis infused products.
After Westleaf consolidates its interest in The Plant to 100%, the facility formerly known as Delta West, will be rebranded The Plant by Westleaf Labs.
Westleaf is anticipating the 2019 legalisation of cannabis derivative products (consumables, topicals and other cannabis infused items).
After receiving a green light from Health Canada, The Plant by Westleaf Labs is expected to produce cannabis derivative products.
Term Sheet Highlights:
Industry Leading Expertise – Xabis is a leader in design, construction and management of cannabis extraction and manufacturing facilities, as well as product development:
Xabis has developed more than two hundred product SKUs, including oil based oral solutions, gummy edibles, hard pressed tablets, water soluble powders, oil-based capsules, body melt capsules and suppositories.
High Margin Products – a diversified offering of derivative cannabis products will account for the majority of consumer demand. Westleaf is focused on product formulations to produce vape cartridges, edibles, beverages, and topicals to meet this expected demand.
Global Ambitions – The Plant is being built to EU Good Manufacturing Process (GMP) specifications to ensure export capabilities.
Scalability – The Plant’s 15,000 sq. ft. complex can be expanded to 60,000 sq feet. The design includes R&D, processing, extraction, manufacturing and order fulfillment. Construction is expected to be complete in summer 2019.
Multiple Revenue Streams – As well as diversified cannabis derivative products, Westleaf plans to offer white labeling services for 3rd parties, and contract manufacturing services for raw extract and distillation.
Vertically Integration – With cultivation, extraction, processing, manufacturing, distribution and 1005 owned retail assets, Westleaf is positioned to protect margins across the life cycle of the industry.
Xabis has designed, built, and operated facilities in 5 US states where medical or recreational cannabis has been legalized.
The move by Xabis into the Canadian market under an exclusive relationship with Westleaf.
- Complete on-site extraction and manufacturing operations
- Compliance, inventory management, supply chain and HR
- Facility & systems design and implementation
- License application support
- Product development
“We believe a diversified offering of derivative cannabis products will account for a major shift in consumer demand once legal,” stated Scott Hurd, President and CEO of Westleaf, “We are positioning to formulate unique, high quality derivative products.”
Brand round up:
- ‘General Admission’ – targets the recreational adult market
- ‘Loon’ – embraces health and wellness
- ‘Backstage’ – premium label for the recreational user
- ‘Westleaf Cannabis’ — medicinal cannabis for pain alleviation and healing.
Tilray (TLRY.Q) invested $2.9 million in Westleaf, Vivo (VIVO.V) invested $5 million, and ATB Financial committed $30 million.
“We are entirely focused on the plant-to-product portion of the value chain,” explains 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 are reinventing the cannabis experience by leveraging a tactile, musically themed, shopping journey through a record store-style concept,” confirmed Hurd in a Trend Hunter interview, “allowing consumers to engage and educate themselves on products.”
Full Disclosure: Westleaf is an Equity Guru marketing client, and we own the stock.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.