RavenQuest BioMed: Unique, Two-Pronged Business Model Diversifies Risk
December 12th, 2017
Exclusive, News, Top News
The Canadian cannabis industry is projected to reach $22.6 billion over the coming years (Deloitte) driven by the legalization of adult-use cannabis next year. Despite more than 70 licensed producers, many experts believe that there will be a substantial shortfall in the market when adult-use legalization goes into effect. This has created a favorable environment for investors interested in capitalizing on a burgeoning new industry.
RavenQuest BioMed Inc. (CNSX: RQB) represents a unique opportunity to capitalize on the industry’s rapid growth with a two-pronged business model that diversifies risk and potentially increases long-term risk-adjusted returns. In this article, we will look at the company’s two main areas of focus and how they combine to form a unique value proposition for investors.
Consulting & Management Services
RavenQuest Technologies Inc. is focused on consulting and management services. After helping more than ten companies secure licenses, the company has become a leading end-to-end solution provider to both late-stage applicants and existing licensed producers. It is instrumental in helping clients design and build facilities, while incorporating proprietary, industry-leading growing and drying technologies.
Management believes that the industry is undergoing an important transition from ‘basement growing’ to highly-specialized operations. The company’s automated Orbital Garden 2.0 is a revolutionary innovation that enables the production of large quantities of cannabis in smaller areas by maximizing the productivity of grow space and lighting. With total production of over 300 grams per square foot, the technology more than doubles industry averages.
In addition to production benefits, the Orbital Garden 2.0 scales to hundreds of automated growing systems with remote monitoring and control of nutrient levels, acidity, CO2, water levels, water temperature, and more. The technology provides a 70% to 80% reduction in electrical costs and a 25% reduction in nutrient costs, which helps licensed producers dramatically improve their profit margins and ensure top quality product.
In addition to its innovative technologies, the company’s management team has developed relationships with indigenous peoples. The team recently announced a contract to build a 24,000 square foot facility for Fort McMurray Nation and, through its many existing relationships, plans to offer similar turnkey solutions to Indigenous populations across the country. These solutions will handle everything from securing the proper zoning to facility design to navigating the application process.
Investments and Research
RQB Capital Corp. is an investment wing focused on investing and acquiring licensed producers. The division recently acquired Alberta Green Biotech, which has a 35,500 sq. ft. production facility under construction. The facility will produce about 7,000 kilograms of cannabis per year once operational in mid- to late- next year, making it one of the industry’s leading grams per square foot cultivation facilities.
Aside from these investments, the company announced a landmark research agreement with top-ranked McGill University that paves the way for collaboration between two laboratories. The research will seek to prove out the science surrounding cultivar recognition, yield enhancement, and plant stabilization, all areas with limited industry knowledge due to cannabis’ long-time classification as a controlled substance. The research could generate tremendous long-term value in the form of a plant breeders rights or through the development of new and innovative technologies for its portfolio.
These two areas of long-term focus provide investors with potentially significant capital gains opportunities over time compared to the consulting division, which focuses upon generating near-term operational revenue.
RavenQuest BioMed Inc. (CNSX: RQB) has taken a unique, diversified approach which generates immediate revenue from its services division (which limits cash burn normally associated with early stage cannabis companies) and simultaneously invests in near-term licensed producers like Alberta Green Biotech. At the same time, it has leveraged its relationships with indigenous peoples to open the door to larger projects and invested in R&D initiatives through a partnership with McGill University.
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