Practice English Speaking&Listening with: Westleaf to Become One of Canada's Largest Premium Cannabis Retailers

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(thunderous rock music)

- We've got a really great opportunity with Prairie Records

to be a leader in the industry.

Cannabis retailing is like nothing consumers have seen

before, and by marrying music and cannabis together

in the retail environment, we think is gonna go really well

for consumers.

It allows us to provide a tactile, tangible

customer experience and really educate the consumers,

help them with product selection.

(illuminating music)

- [Voiceover] Westleaf Cannabis Inc. is a sponsored client

of pinnacledigest.com.

Both pinnacledigest.com's parent company and its president

own shares of Westleaf Cannabis Inc.

(bass thumping rock music)

- Canada became the first country in the G7 to legalize

recreational marijuana on October 17th.

The Great White North is home to the most well-funded,

diverse, and advanced cannabis industry on the planet.

As the space matures, speculative capital is shifting

its attention from the growers to the retailers.

For the first time, legal regulated pot shops,

or dispensaries became a reality on October 17th.

- [Voiceover] It's our belief that the cannabis LP race,

which began back around 2014, 2015, is over.

In many ways, the players are established.

So now, among the most important races from the investing

standpoint on the recreation side will be in retail.

We are speculating the retailers will create many lasting

legacy brands.

- If the first week of legal recreational sales in Canada

were any indication, certain retailers may be

standing on the edge of substantial demand.

- [Voiceover] Avery Shenfeld, Chief Economist

at CIBC World Markets believes Canadians could be buying

as much as 10 billion worth of marijuana products a year.

For some context, Canadians spent roughly 9.2 billion

on beer in 2016, according to CBC.

- We can only speculate on sales numbers,

as the retail cannabis industry is but a few weeks young.

Perhaps that's what makes it so interesting.

Whatever the annual sales figures reach,

retail's a sub sector worthy of investors' attention

and further due diligence.

You can bet any cannabis retailer worth their salt

will be trying to differentiate their product offering

by creating a unique user experience for the consumer.

- As you may have noticed we're in beautiful Banff, Alberta,

with Canada's majestic Rocky Mountains behind me.

We're about one hour from Calgary,

the headquarters of retail cannabis company, Westleaf.

(thundering rock music)

Focused on the retail market for marijuana, Westleaf is

developing a truly novel shopping experience for consumers.

The concept of its retail stores,

the first of which is anticipated to open in early 2019,

could be a game changer for the industry.

Westleaf's recreational shops brand, Prairie Records,

combines the instinctual tie of recreational cannabis

and music.

- [Voiceover] Education and in-store branding will combine

to aid Westleaf's goal to dominate what it refers to as

premium locations in carefully selected regions.

First we'll meet with Scott Hurd,

Co-founder, President, and CEO of Westleaf.

Prior to Westleaf, Scott served as the Vice President

of Business Development at Grafton Asset Management,

a leading Canadian asset management firm where he was

involved in raising, investing and managing over

one billion of capital, focused on real-asset investments

in North America.

- Scott, Westleaf is a vertically integrated company.

That term gets thrown around all the time.

Can you explain why it's true for the company?

- Yeah. So, Westleaf's a vertically integrated company.

What I mean by that is we own, control, or have an

interest in assets across the entire cannabis value chain.

From production, processing and extraction, manufacturing,

product branding, right down to retail.

Why be vertically integrated?

Number one, it defensively positions our business to protect

our margins through the life cycle and maturation

of the business.

And secondly, through controlling the retail distribution,

we control the consumer experience.

And we get the opportunity to influence their

purchasing habits to ultimately buy our products and

create that demand pull through our vertically integrated

supply chain.

- Makes sense.

Now, the retail sub sector's in its infancy,

it's just starting, yet it's very competitive.

We've seen Canopy Growth step in and acquire grower retailer

Hiku Brands for 250 million, an all stock deal.

How is Westleaf gonna differentiate itself

from all the competitors?

- Cannabis retail, like all retail businesses

will be highly competitive.

So how do you defensively position yourself?

Number one, have great real estate.

Number two, be conscious of your cost structure.

And number three, have a unique and differentiated

retail concept, with a world-class sales experience.

And that's what deliver with Prairie Records.

- Retail is all about branding.

What first got my attention was the Prairie Records

store concept.

How do you expect to attract and hold a wider

audience of consumers?

- So Prairie Records is the most unique and differentiated

concept in the cannabis retail landscape.

And what Prairie Records does is leverage

the instinctual tie between recreational cannabis and music,

and creates a sophisticated, yet approachable space

that appeals to a wide variety of consumers.

Everybody has a relationship with music,

and it's through that relationship in Prairie Records

that we can engage and identify with consumers in the way

our competitors can't.

- When will the first Prairie Records stores be open?

And from a regulatory standpoint are there any final hurdles

the company needs to overcome?

- Yeah, so we're fully funded.

As of close we have 37 billion in cash on the balance sheet,

access to another 30 million of non diluted capital, and

we're using those funds to execute a measured but aggressive

role out of stores across Canada.

Our first stores will be open in early January

and much like all cannabis retailers, we're subject to

diligence and inspection before we can open our doors

to the public.

- So it feels like a race among retailers to open up

the first store, where does Westleaf stand against its

competitors in the push to open up some of its first stores?

- Cannabis retail is a marathon not a sprint,

and we're building our business for long term success.

Our measured and calculated approach to everything we do

has served us well.

Many of our competitors have rushed to open their stores

on October 17th, but it's been at the expense of operational

and supply chain challenges that have really resulted in

a less than ideal consumer shopping experience.

We're laser focused on ensuring that

when we open our stores, we can deliver that

world-class sales experience and build brand loyalty

that'll ultimately position to be a winner in this marathon.

- So fast forward 12 months, it's November 2019,

how many Prairie Records stores does Westleaf

hope to have open?

- Our strategy for cannabis retail is a

quality over quantity approach.

We're focused on ensuring each one of our locations is a

tier one location that's representative of our brand.

Over the next 12 months we expect to open about

20 retail stores in BC, Alberta, and Saskatchewan.

And with the upcoming privatization of cannabis retail

in Ontario, that could see that number grow materially.

- I think it'd be helpful if you gave us a high-level

summary of what it takes from a regulatory standpoint

to open up a cannabis shop.

- Cannabis retail is a highly-regulated, complex, and

resource-intensive business.

The land grab in western Canada is over...

Each province and municipality has their own

distinct regulatory framework.

We've been an early entrant, we're extremely well-positioned

and well-capitalized.

(upbeat piano rhythm)

- So we gotta talk about Shon Williams.

The guy's bio's incredible.

He's your Chief Development Officer,

graduated from West Point.

Can you talk about how he's gonna help the company?

- Yeah.

Westleaf has a really strong and diverse team

and Shon's a great example of that.

We're really lucky to have Shon.

He's got an impressive background.

He's a mechanical engineer,

Masters in aeronautical engineering.

He's a 24 year retired lieutenant colonel

in the U.S. Air Force, he's a test fighter pilot,

he's Chief of Test of the F-22, and prior to his retirement,

he project managed the largest ever disposition

in U.S. History, which was the $30 billion sale

of the F-15 to the Saudis.

- Wow.

- After retirement, Shon got into the cannabis business

and went on to be an executive at the largest operator

of cannabis assets globally.

- MJardin, right?

- Correct, yeah.

And what, really Shon brings to our team is 24 years

of leadership and the discipline around project management

that's really creating the infrastructure that's allowing us

to scale at the pace we are.

- VIVO and Delta 9 are two Canadian LPs Westleaf has

a relationship with, can you talk about how they fit into

the story at this point?

- Yeah, so Westleaf secured a number of

strategic partnerships, relationships, and investors,

which include VIVO and Delta 9.

VIVO made a sizeable investment to us back in early October.

That was a strong validation of our team and our strategy.

Delta 9 was our first partner, and we've partnered with them

to jointly develop one of Canada's largest processing,

extraction, manufacturing fulfillment centers,

located right here in Calgary.

- The Westleaf story has depth.

With development costs coming, how do you plan on

meeting them?

What are you most excited about looking forward?

- Westleaf's in a great spot.

We're fully funded, we have a strong cash position,

and we've attracted investment from some of the largest LPs

in the world.

And we're well-positioned to dominate

the Canadian Cannabis retail landscape.

- [Voiceover] Next up we'll meet with Adam Coates,

Vice President of Sales and Marketing for Westleaf.

Before Westleaf, Adam was Vice President of Specialty Sales

at Labatt Breweries of Canada, where he was responsible

for over 70 million in revenue, and overall volume and

revenue growth in eight major urban centers across Canada.

Adam served as Senior Manager of Finance at Labatt,

where he led the business integration, including

brand expansion and budgeting plans for the acquisitions

of Mill Street brewery and Mark Anthony brands.

- Adam, thanks for joining us.

You've got experience growing sales for one of the most

iconic brands in Canada, in Labatt.

Early estimates are showing marijuana sales could outpace

those of alcohol.

What are you most excited about when it comes

to the cannabis retail market?

- I'm excited about the leadership opportunity.

We've got a really great opportunity with Prairie Records

to be a leader in the industry.

Cannabis retailing is like nothing consumers have seen

before, and by marrying music and cannabis together

in the retail environment, we think, is gonna go really well

for consumers.

It allows us to provide a tactile, tangible

customer experience and really educate the consumer,

and help them with product selection.

- Lets talk about the entire ecosystem for a moment.

How do you see the relationship between growers

and retailers evolving over time?

- I think the interesting thing is that retailers are really

at the forefront of the consumer purchasing experience.

So, they're gonna understand what the

consumer knowledge base is and what they're gonna demand

from a product standpoint.

At Prairie Records, what we encourage is exploration in a

deeper understanding of what the products that they're

selecting.

And so, with that, we're gonna allow and understand

what consumers are demanding and push upon our

production partners, to make sure that they're delivering

all the brands and products that we need to satisfy

consumer demand.

- So Westleaf's store business model is very

location-orientated.

As opposed to just going out there and getting as many

locations as possible, you guys are being very selective.

Can you talk about some of your goals with respect to

Prairie Records store locations?

- We're really particular about the types of locations

where we wanna put Prairie Records.

It needs to fit the brand.

what we really look for is really densely populated

neighborhoods and municipalities, with really high levels

of foot traffic.

So that really lends itself to urban centers

and resort destination towns.

And really, within those, what we really wanna do is

put Prairie Records where consumers are going for dining,

they're gonna see a show, meet up with friends,

socialization.

Prairie Records is about music.

Music is social, they're best of friends.

And so we really wanna marry that location experience

along with the in-store experience.

- Obviously Westleaf isn't the only retailer trying to

provide a unique experience to shoppers.

At the end of the day, what's gonna separate

the winners from the losers in the retail cannabis space?

- Well, it's really about the ability to execute,

and what comes from that is the team behind it.

We've got a great team at Westleaf from Prairie Records

that has a wide range of very impressive skill sets

and experiences that will allow us to execute on our vision.

And then, our concept really is timeless.

It allows us to engage the consumer in a very unique

and relatable way.

And we really think it's gonna be successful not only

capturing new customers but retaining them for long periods

of time.

- Adam thanks for helping us out.

- Thanks very much.

(upbeat music)

- Recreational marijuana is now legal in Canada.

And the retail market is at the dawn of a new era.

- [Voiceover] Through its capital, strategic investors,

a vertically integrated model, and leadership team,

Westleaf aims to capitalize on this phenomenon.

- With its Prairie Records store concept, Westleaf is

on the verge of bringing a truly novel shopping experience

to Canada, aiming to be the gold standard in the

retail cannabis space.

(cheerful enchanting music)

The Description of Westleaf to Become One of Canada's Largest Premium Cannabis Retailers