True Leaf has not been idle. As it reaches the final stages of receiving its licence to process and sell cannabis, it is more than ready to hit the ground running with a strong revenue stream backed by solid financing.
For more than three years the Vernon, B.C.-based company has been building its infrastructure and distribution network through its True Leaf Pet division, a global provider of hemp-based supplements, sometimes referred to as nutraceuticals, for pets.
True Leaf Pet is one of two divisions established by the company in 2015. The other is True Leaf Medicine, a medical cannabis start-up in anticipation of getting LP (licensed producer) approval. Meanwhile, True Leaf Pet’s line of functional treats, oils and chew sticks for dogs has gained worldwide popularity and is sold in more than 2,000 stores in Canada, the United States, Europe and New Zealand, as well as on Amazon.
In fiscal 2018, the company reported record sales of C$1.4 million — a 280-per-cent increase over the previous fiscal year – and recently announced its best quarter ever. This makes True Leaf the only revenue-generating cannabis company with a federally legal product in multiple countries. It also makes it one of the largest legal cannabis pure-plays in the $184.1-billion global pet products market, according to founder and CEO Darcy Bomford.
“Being in the pet business allows us to be one of the few late-stage applicants to generate revenues before getting our licence. We’ve done this by using only hemp seed as the key ingredient, which still contains significant beneficial properties and is legal for sale in every jurisdiction in the world. Maintaining our fully legal status in all these markets has paid off for us because it has allowed us to build a trusted brand and grow our business globally. We are now on the threshold of legalization, which will extend our business even more.”
True Leaf is also the first Canadian-listed company to conduct a successful equity crowdfunding campaign fully vetted and approved by the U.S. Securities and Exchange Commission, he says. “That’s significant in that our fully legal strategy allows us an opportunity to go to Nasdaq or NYSE in future. Very few cannabis players can do that today.”
The $14 million raised is being used to fund the True Leaf Campus in British Columbia, which will serve as the research and development hub for True Leaf’s medicinal cannabis products for both people and pets.
The campus, located on 40 acres of land in Lumby, began phase one of construction in March 2018, and benefits from full local government support. The plan includes a 16,000-square-foot cannabis production facility plus a total of 18,000 square feet dedicated to laboratory services, extraction and post-production processing. When completed, it will provide significant employment to the hard-hit logging community of 1,700 in the Okanagan Valley.
In addition to medical marijuana, the future legalization of cannabidiol (CBD) for pets will allow True Leaf to further expand its pet offerings, Bomford says. “We have already been conducting extensive research to develop a CBD product line for pets.”
Cannabis-for-pets pioneer and veterinarian Dr. Katherine Kramer is leading those efforts. She recently joined True Leaf as founding chair of its Veterinary Advisory Board and its team of well-known Canadian political and business leaders. True Leaf is chaired by Mike Harcourt, the former premier of B.C. and mayor of Vancouver. Sylvain Toutant, the former CEO of DAVIDsTEA and president of the Quebec liquor board, joins Mr. Harcourt on True Leaf’s board of directors.
Bomford himself began his career in the pet industry more than 30 years ago when he was a young entrepreneur. He started by selling his own all-natural supplements for dogs out of a van and eventually took the company public. He exited the industry in 2012, but saw the upcoming changes in cannabis regulations as a promising opportunity to use his industry experience to marry the benefits of cannabis with pet health.
“Overall, the goal is not to be just another cannabis company,” Bomford says. “We are also focused on our mission to ‘return the love’ to our pets and our community. The tagline was born as a salute to the unconditional love people receive from pets, and serves as the company’s guiding principle to give back and improve quality of life.”
With its strong roots in the pet industry, True Leaf stands apart, Bomford believes. One key advantage is that the company is already able to base its valuations on solid business metrics recognized by everyone in the industry. “With the revenue base from our True Leaf Pet division, we believe we are one of the best-positioned companies to add value when we receive our medical cannabis licence.”