Quadron Cannatech Begins to Ramp Up Revenue
March 27th, 2018
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The Canadian cannabis industry is projected to reach C$22.6 billion in size over the coming years, according to Deloitte, driven by the legalization of adult-use cannabis nationwide. While cannabis flower has generated the most sales to date, the fastest growing subset of the market is cannabis oils and extracts. Mackie Research believes that Canadian cannabis oil consumption will grow from just 284 liters in 2015 to more than 562,600 liters by 2020.
Quadron Cannatech Corporation (CSE: QCC) is a developer of cutting-edge cannabis extraction equipment that has seen strong interest following the recent MJBiz Conference in Las Vegas and the Lift Expo in Vancouver. With a very small footprint and minimal energy requirements, the BOSS CO2 Extraction System features proprietary max flow technology with advanced thermodynamics, automated features, and an exclusive plug-and-play design.
Cannabis cultivators are always looking for ways to maximize revenue and profitability. Revenue growth is often a function of raw production capacity, but increasing profit margins can be trickier in an increasingly competitive industry. Cannabis flower is quickly becoming commoditized as a growing number of cultivators come online, which has led to a move towards cannabis oils and extracts that are used in applications like vape pens and edibles.
The challenge for many cultivators is finding a way to easily start producing cannabis oils and extracts. Often times, cannabis extraction equipment is expensive and difficult to install and operate, which makes it intimidating and cost-prohibitive for many smaller producers. Older and more expensive systems also have slower extraction times, which translates to less revenue potential for cultivators as they try to efficiently scale up their production.
The BOSS CO2 Extraction System is faster than many traditional machines. In fact, the complete cycle turnaround is just six hours, which includes four hours of extraction and two hours for decompression and cleaning, compared to upwards of eight to twelve hours for traditional extraction equipment. The system can also be installed and operational within hours with little more than an electrical outlet and a small space to put the machine.
In addition to the BOSS, the company manufactures vape pens and other consumption devices that can be branded for clients of the BOSS extraction equipment. Cultivators can purchase the extraction equipment, generate their own cannabis oil, and then sell branded vape pens with cartridges containing that oil to generate high margin recurring revenue. The company’s engineering team also provides consulting services to cultivators and other parties.
Quadron Cannatech recently announced the sale of two BOSS CO2 Extraction Systems to an authorized grower located in the Fraser Valley of British Columbia. The move comes about two months after the company closed a C$5 million financing, consisting of $0.70 units including one common share and one purchase warrant, that provided working capital to meet growing demand from customers following two successful trade shows in the U.S. and Canada.
“Quadron is well capitalized following the recent equity raises, along with the exercise of warrants,” said CEO Rosy Mondin in a recent press release announcing the two new sales to an authorized grower in British Columbia. “We have enough capital to not only service existing demand for the BOSS from interested parties, but also the capital to proceed with the development of new equipment. 2018 will be a milestone year for Quadron.”
Last month, the company also announced increasing sales of its next generation custom cartridges and vape pen consumption devices. These ancillary products and services are fully integrated with its equipment and laboratory environments, enabling its customers to quickly launch branded products into both medical and recreational markets.
Quadron Cannatech Corporation (CSE: QCC) represents a compelling investment opportunity. After raising capital in January, the company is rapidly scaling up production to meet strong demand from customers from trade show appearances. Its ancillary products are also quickly picking up steam, which could set the stage for recurring revenue over time. Investors may want to take a closer look at the stock given these catalysts.
For more information, visit the company’s website at www.quadroncannatech.com.
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