Weed Me’s Shareholder Update

From the desk of the CEO:

Dear Investors,

I am pleased to provide you with this update on the performance of Weed Me.  Since the last investor update that was provided in April, 2018 Weed Me has made substantial progress in implementing its business plan.  Since October, 2018 Weed Me has commenced selling, has gained its processing licence and has hired new staff and established new post-production activities.  In short, the business has matured significantly since our most recent update.  We believe that Weed Me is well positioned to be successful in the cannabis market.

Sincerely,

Ed Jamieson,
CEO

Business Update

Weed Me’s strategy is to leverage its production facility and produce product for both the medical and the recreational markets.  For the recreational market, our focus is on producing premium dry flower with a goal of achieving premium pricing.  For the medical market, our focus is on developing specific formulations and producing oils that will ultimately be sold to medical patients.  From a branding perspective, our recreational brand will be “Weed Me” and we plan to sell our medical product under the brand “Gravity”.

Since starting our first “crop” in June 2018, Weed Me has continually improved its grow strategy in order to maximize output and optimize the use of our Flower Rooms.  We have seen consistent improvement in quality and yield and, unlike many other organisations, Weed Me has never had a crop failure.  Looking forward, we will shortly be running a pilot which, if successful, will increase our grow capacity by 50% without a major injection of capital.

Through the experience of developing and getting a licence for its own business, Weed Me management believes it has developed significant expertise which has value to others who would like to enter the cannabis market.   Weed Me is now leveraging this expertise.  As an example, Weed Me has entered into an agreement under which it will provide its expertise to assist XTRX Solutions (XTRX), a division of Ayurcann Inc., in gaining their licence.  (XTRX is a cannabis company that is focused on the extraction of cannabinoids and the development of cannabinoids into oil-based products.)  In exchange for this assistance, Weed Me has received an 20% stake in XTRX’s business as well as a ROFR on all product produced by XTRX for its first two years of operations. 

A second example is a non-binding Letter of Intent that Weed Me has signed with two other partners whose goal is to be awarded a production and sales licence in Germany.  Weed Me will enter into a formal agreement if the partners are awarded a German production and sales licence.

Sales and Licence Update

Weed Me’s goal is to possess all of the licences required for the production and sale of cannabis products to recreational and medical consumers.  Since the Cannabis Act came into force in October, 2018, Weed Me has been able to sell dry flower to other licensed producers.  Weed Me has also received authorization to process cannabis into oil through extraction.  Weed Me has applied for and has been inspected by Health Canada for the licences required for the sale of cannabis products to provincial purchasers and medical clients.  The inspection went well and Health Canada has advised that we passed our final inspection.  We are now waiting for Health Canada to award our licence in the coming weeks. 

We are pleased to report that since November 2018, Weed Me has consistently sold virtually all of its dry flower production to a number of well-recognized licensed producers.  In addition to selling dry flower to licensed producers, Weed Me has also produced and sold both “Weed Me” and “Dutch Passion” branded pre-rolled cannabis products to CannMart.  These pre-roll products are now being purchased by medical patients.

Here We Grow

Weed Me has built out and is currently operating out of 8,000 sq ft within its 20,000 sq ft facility.  Plans to complete the remaining 12,000 sq ft are currently being prepared.  The initial stage of this expansion is to build the infrastructure, and we anticipate that this will be financed through debt financing that is in the final stages of negotiations.  Further capital investment will be required to complete the expansion and install all required equipment.  This expansion will significantly increase Weed Me’s total annual production, resulting in higher sales and a lower production cost per gram.  In order to further increase production capability Weed Me has also secured two acres of adjacent land to Weed Me’s existing facility upon which a 200,000 sq ft facility could be constructed.