Investment Highlights

  • Indiva Ltd. (“Indiva”, “company”) operates a 40,000 sq. ft. facility (“Indiva facility”) in Ontario and is involved in the manufacture and sale of pre-rolls and pouches, award-winning cannabis edibles, and cannabis derivatives.
  • Contract Manufacturing Capabilities: In addition to producing company-branded products, Indiva is a contract manufacturer for companies such as The Supreme Cannabis Co. (TSX: FIRE), Dycar Pharmaceuticals Ltd. and other confidential licensed producers.
  • Establishing a Retail Cannabis Store: The company is planning to apply for a farm gate store license to operate a storefront at the Indiva facility. Given that the Indiva facility is situated in Ontario, the expected largest market for cannabis in Canada, we believe this storefront will be able to derive meaningful revenue. The proposed storefront is in close proximity to a number of geographical hotspots.
  • Indiva has a diverse line-up of brands and the know-how to produce a range of cannabis edibles. Branded products include Indiva, Bhang (CSE: BHNG), Wana, Gems, Ruby, and Sapphire.
  • The company is expected to have a recreational distribution network with exposure to 96% of Canada’s population.
  • Although retail cannabis sales in Canada totalled $1.2 billion in 2019, a figure that has fallen below consensus estimates, the recent legalization of cannabis edibles and other alternative cannabis products are expected to provide strong growth for the Canadian cannabis market. We believe that Canadian cannabis retail sales in 2020 could double from 2019.
  • Subsequent to Q3-2019, the company raised capital in the aggregate amount of $16 million.

Investment Risks

  • Operates in an industry that is highly regulated.
  • No guarantee that the company will be able to sell the cannabis products produced at their facility or operate at full capacity – the company does not have secured supply contracts.
  • Contamination risk and other risks associated with biological/agricultural production.
  • Operates in a highly competitive landscape against companies with significantly greater scale.
  • Access to capital and share dilution.

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