Operating in California, the world’s largest cannabis market, the Vancouver-based company has an ace in its back pocket that many don’t – it is fully-licensed to conduct operations across the entire value chain: nursery, cultivation, extraction and distribution.
“We’re a full vertically-integrated business. We’ve got four conditional use permits on the recreational side and on the medical side, which is quite unique,” says chief executive officer Leigh Hughes, who has been chairman since 2017, recently taking the helm of CEO.
“Our tagline is premium seed to consumer integration,” says Hughes. “We take it right from the seed all the way right to the retail storefront, providing our consumers and customers with multiple premium product lines. That’s where we see the business going.”
A mammoth indoor facility in progress
Next Green Wave’s indoor cannabis facility in Coalinga, California is nestled about halfway between Los Angeles and San Francisco.
Phase 1 construction is now complete on a 35,000 sq/ft indoor facility has seen a host of changes in recent months, with all major construction on its first phase having been completed in January.
A few items remain: finishing the power cable installation from the local substation to connect the facility, as well as a final City inspection for the issuance of an occupancy permit.
The starting line is near though and it’s expected Next Green Wave will begin production over the next few months and will expand it further.
For Phase 1, the 35,000 sq/ft, automated facility comes equipped with proprietary fertigation, operational and security systems. The building will also host positive pressured, climate-controlled rooms to accommodate the full growth cycle of cannabis.
A dozen football fields
There’s a lot of runway to grow at the Coalinga facility – with more than 15 acres, or around 350,000 square feet of space to grow.
That’s about the size of 12 American-sized football fields and Next Green Wave has plans to build this out over the next two years, adding another three facilities, with full capacity by mid-2020.
Intrexon deal compelling
One of the most exciting announcements to come out of Next Green Wave in recent weeks was the signing of a deal with Intrexon Corp (NASDAQ:XON), in an aim to create a world-class nursery.
The deal will allow the rapid production of its proprietary cannabis for the California market and will take place in two phases. In the initial optimization phase, Intrexon will calibrate its Botticelli™ technology to Next Green Wave's award-winning cannabis cultivars.
Intrexon's Botticelli platform is an advanced tissue culture technology designed to enable the efficient propagation of plants while maintaining genetic purity and product performance.
In a later production phase, Next Green Wave may use the technology in the production of cannabis plantlets and the sale of plantlets to producers in California.
The deal is a win for both parties: Under the deal, Intrexon will be entitled to royalties on Next Green Wave's own plantlet use, and the parties will share the revenue from third-party sales.
Extensive catalog of cannabis genetics
The legalization of cannabis in California has added pressure on cultivators to produce new strain varieties for the fast-evolving market, according to Hughes.
Next Green Wave is host to an extensive catalog of cannabis genetics, which enables it to develop new cannabis hybrids with desired traits.
This fact was bolstered in January. Michael Jennings, the current chief operations officer and head of research and innovation at NGW, transferred 100% of his interests and benefits in a cannabis genetics inventory, including 112 cultivars to the company's wholly-owned subsidiary, Crossgate Capital, U.S. Holdings Corp.
"We have one of the world's most exceptional breeders and cultivators – Michael Jennings – who is determined to execute Next Green Waves' vision to develop a distinguished nursery for the medical and adult-use cannabis market in California," says Hughes.
California is home to the world’s largest adult-use recreational market. It’s one that’s worth an estimated US$3.7 billion, and set to hit US$5.1 billion in 2019. As a reference point, the beer market in California hit US$5 billion in 2017.
“The California market is not only one of the largest in the world, but also has a dynamic, edgy cannabis culture,” says Hughes.
Financing in check
Next Green Wave is fully funded, having raised more than C$21 million in August 2018, with an eye to bring the company into revenue in 2019.
Much of the funding was used for the construction in Phase 1 of Facility A, including purchase and installation of equipment and utilities, retrofitting Facility C and acquiring Facility D.
The year ahead looks encouraging
While the company is still a relatively new entrant to the market, listing on the Canadian Securities Exchange (CSE) in October 2018 and on OTCQB Venture market in the US in December 2018, the next year looks to be an exciting one for the company, with a host of items on the agenda.
In the coming month, Hughes says the team is keeping an eye out for strategic acquisitions and other partnerships ahead with industry players. Additionally, he says that pushing forward the innovation envelope will be a key factor, which he says will be a significant piece of the industry moving forward.
For now, the wave is here and Next Green Wave is looking to capitalize on the green rush.