Priming for Expansion, GreenStar Strikes a Deal with Progressive Herbs


Ryan Allway

October 10th, 2019

App, Exclusive, News, Top News


GreenStar Biosciences Corp. (CSE: GSTR) already had a strong cannabis market presence through its stake in Cowlitz County Cannabis Cultivation, a leading player in Washington State. Primed for expansion, GreenStar has struck a deal with Progressive Herbs Inc., forging a new joint venture that should make all involved even stronger.

Cowlitz County Cannabis is a Tier 2 producer in Washington widely known for sourcing premium cannabis at fair prices and three popular brands: Hi Guys, Dab Dudes and Cowlitz Gold

Cowlitz’s Product Lines

The new JV between GreenStar and Progressive, called Capri PHGS LLC, was kicked off with a pilot cultivation evaluation of a new, proprietary growing system owned by Progressive and its affiliate Aggressively Organic, Inc.

The initial study of the growing system showed the technology can produce cannabis plants that have much higher levels of cannabinoids than similar strains on the market today, along with several other important benefits for cannabis operators.

Capri JV Partnership

Vancouver-based GreenStar and Indiana-based Progressive are 50/50 owners in Capri. Per the deal, the JV has exclusive rights to utilize the proprietary cultivation technology for a sustainable, inexpensive growing system known as Micro Dendritic Pods™. The strategy is for Capri to develop, manufacture, commercialize and sell products grown with the Micro Dendritic Pods technology for sales globally in the cannabis, hemp, medical and biopharmaceuticals markets.

The Micro Dendritic Pod Technology in Action

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The two companies and their affiliates have an opportunity to leverage their individual successes. 

Cowlitz’s products, including pre-rolls, flower (cannabis buds), BHO (butane hash oil) waxes, vaporizer cartridges and crystallines, are found on the shelves of more than 80 retail stores in Washington State. Cowlitz is Washington’s largest independent buyer of dried flower and producer of more than 2,000,000 pre-rolls annually.

There are different synergies in play here between Cowlitz and Capri that can be profitable for all parties considering GreenStar owns certain assets of Cowlitz, including IP and property leases. The details have yet to be fleshed out, but Cowlitz could become a buyer from Capri, licensee of the technology or some combination in a future deal that ensures production of high-quality, low-cost cannabis products.

Judging from initial testing, it looks like GreenStar and Progressive are onto something with the Micro Dendritic Pods. 

Supercharged Cannabinoids

Cannabinoids are components of the cannabis plant that act upon the body’s endocannabinoid system. The two most famous are CBD and THC (tetrahydrocannabinol), but there are more than 100 others that have various effects on the body. Notably, THC is the cannabinoid responsible to the psychoactive high commonly associated with ingesting marijuana.  CBD, which also can be derived from hemp – defined as cannabis sativa with less than 0.3% THC – has zero psychotropic effect.

CBD is the cannabinoid frequently heralded for a bevy of positive therapeutic effects in treating everything from dry skin to anxiety to epileptic seizures. CBD derived from hemp became legal throughout the U.S. this year with the passage of the 2018 Farm Bill.

One of the first initiatives for Capri was to complete a cultivation test using the new technology for cannabinoid analysis. In doing so, about 2,500 plants spanning three different cannabis strains were grown at Cowlitz’s facilities in Washington. The data was compelling, to say the least.

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Results from independent lab tests showed total cannabinoid percentages between 22.85% to 32.54%, depending on the strain. To add some context, industry averages are generally 15%-23% for similar strains.

The strains were diverse. One had high THC content (24.54%) and lower CBD (2.24%).  Another had high CBD (22.85%) and lower THC (9.78%), while the third was virtually CBD-free (<0.01%) with high THC (25.88%).

It Doesn’t Get Any Easier Than This

In addition to a superior cannabinoid profile, the cultivation technology further demonstrated other efficiencies and benefits compared to conventional greenhouse operations. The company didn’t give away the “secret sauce,” but it did say that cultivation room was completed using “off-the-shelf” environmental control products, meaning no expensive special equipment is necessary.

This is possible, as confirmed by Washington State accredited testing facility Praxis Laboratory, without the use of pesticides, herbicides or fungicides. Moreover, Medicine Creek Analytics, a Washington State accredited heavy metal screening lab, confirmed no detectable levels of the heavy metals arsenic, lead, cadmium or mercury in the plants from the pilot run.

A drilled down look at the economics showed that electricity costs could be chopped in half, as measured by about 3 grams of plant produced from one watt of electricity versus 1-1.5 grams per watt for today’s technology.

What’s better than a cannabinoid-loaded, contaminant-free plant produced at lower operating cost per square foot?  One that grows faster. All three plant strains were harvested in 72 days, which equates to up to five harvest cycles per year. This compares to an average of three or four harvests annually for a traditional indoor grow facility.

Next Steps

“We believe we have proven the proof of concept effectiveness of this technology. We are excited to continue pursuing further testing and leveraging this proprietary technology,” said GreenStar CEO Rahim Rajwani, in a press release on the pilot testing.

The go-forward strategy involves scaling cultivation operations with the proprietary technology to lend further validation to its benefits. Capri will then use the technology for low-cost indoor production for itself and look to build an additional revenue channel through a licensing model to allow other producers, presumably including Cowlitz, access to Micro Dendritic Pods™.  

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Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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