WEBVTT - Doing medicinal cannabis differently–Rua Bioscience 0:00:05.840 --> 0:00:08.680 Cura and welcome to this episode of Shed Lunch where 0:00:08.720 --> 0:00:11.680 we delve into the world of medicinal cannabis. It's a 0:00:11.720 --> 0:00:14.480 market that's said to have lots of promise, but it's 0:00:14.480 --> 0:00:18.280 proving quite tough for New Zealand companies. I'm Helen Madison 0:00:18.600 --> 0:00:21.239 and I'll be talking about this topic. We see you are 0:00:21.320 --> 0:00:23.119 rue of Bioscience, Paul Neasky. 0:00:24.360 --> 0:00:28.080 Investing involves risk you might lose the money you start with. 0:00:28.520 --> 0:00:32.320 We recommend talking to a licensed financial advisor. We also 0:00:32.360 --> 0:00:37.159 recommend reading product disclosure documents before deciding to invest. Everything 0:00:37.200 --> 0:00:39.800 you're about to see and hear is current at the 0:00:39.840 --> 0:00:40.720 time of recording. 0:00:41.120 --> 0:00:43.880 Welcome Paul. How are things in the Escape today? 0:00:44.360 --> 0:00:44.640 Ellen? 0:00:45.200 --> 0:00:47.479 A little bit wet and overcast, but we're boxing on. 0:00:48.159 --> 0:00:50.120 We've had our fair share of RAINO the last few weeks. 0:00:50.159 --> 0:00:52.480 So Paul, before we jump into finding out what Ruer 0:00:52.560 --> 0:00:55.880 Bioscience does, tell us about your background and how you 0:00:55.960 --> 0:00:57.120 came to be in this position. 0:00:57.720 --> 0:00:59.160 Yeah, good question. 0:01:00.120 --> 0:01:02.360 I think my mother asks me that quite a bit. Actually, 0:01:02.400 --> 0:01:06.440 how did you end up being CEO of a cannabis company? Yeah, 0:01:06.560 --> 0:01:11.720 so I've lived in Tarrafti for ni on eighteen years. 0:01:11.760 --> 0:01:13.319 In that time, I've got to know a few people 0:01:13.400 --> 0:01:16.600 and done a bit of business here. And as Marnham 0:01:16.640 --> 0:01:18.520 and Parnaper, who were the co founders of the company, 0:01:18.560 --> 0:01:22.000 started the company, they reached out to me in the 0:01:22.000 --> 0:01:24.040 early days and sort of said can you help? And 0:01:25.640 --> 0:01:28.520 I thought that what they were doing was excellent and 0:01:28.600 --> 0:01:30.840 brilliant and I'd been watching what they'd been doing and 0:01:31.000 --> 0:01:32.440 it was super exciting. 0:01:32.760 --> 0:01:36.559 So your background is it forestry and what else would 0:01:36.560 --> 0:01:39.080 you say that you've done? What's your skill set? 0:01:39.600 --> 0:01:42.400 So yeah, I did a forestry degree in Australia many 0:01:42.440 --> 0:01:45.200 many moons ago and came over as a young graduate 0:01:45.280 --> 0:01:50.400 in my early twenties with Fletcher Forests, and I started 0:01:50.400 --> 0:01:53.760 off in forestry, but I moved into sales and marketing roles, 0:01:53.840 --> 0:01:59.760 business development roles, then Fletcher Paper and then Fletcher Building 0:02:00.040 --> 0:02:03.040 corporate roles, management roles, and so in tai Arfiti, I 0:02:03.080 --> 0:02:06.960 moved to Tyrafiti work for an agribusiness corn company and 0:02:07.000 --> 0:02:09.440 from there did a little bit of other consulting work 0:02:09.480 --> 0:02:10.880 and then landed myself. 0:02:10.639 --> 0:02:11.520 In medicinal cannabis. 0:02:11.560 --> 0:02:13.680 So I've got a well rounded set of skills in 0:02:13.720 --> 0:02:16.400 terms of business. So I've done a bunch of different things. 0:02:17.160 --> 0:02:19.600 There's a number of companies in New Zealand in the 0:02:19.639 --> 0:02:23.400 medicinal cannabis market, as it were, all there supplying that market. 0:02:24.200 --> 0:02:27.800 At least three of them are listed. Your model is 0:02:27.840 --> 0:02:30.360 slightly different and it's changed recently, so can you tell 0:02:30.440 --> 0:02:33.280 us about that model? But also how are you different 0:02:33.320 --> 0:02:35.119 from your competitors? 0:02:35.760 --> 0:02:37.280 Yeah, a good question. 0:02:37.360 --> 0:02:43.320 Well, oll, we have changed and we listed in twenty 0:02:43.600 --> 0:02:48.360 the end of twenty twenty, and we started off like 0:02:48.480 --> 0:02:52.400 a this is a new industry and no one really 0:02:52.480 --> 0:02:54.120 knew how it was going to go. But we started 0:02:54.120 --> 0:02:59.080 off with a sense that we wanted to test manufacturing 0:02:59.080 --> 0:03:01.600 and test cultivation, and so we set up small cultivation 0:03:01.840 --> 0:03:06.360 and small manufacturing facilities in our region. And we've subsequently, 0:03:06.480 --> 0:03:08.880 as we learn more about the market and you delve 0:03:08.919 --> 0:03:11.919 into the nuances of the market and how it's all going, 0:03:12.240 --> 0:03:15.520 you soon realize that actually we've taken a view that 0:03:16.240 --> 0:03:20.320 New Zealand is not going to or we won't be 0:03:20.360 --> 0:03:22.320 able to get a great return on capital if we 0:03:22.360 --> 0:03:24.360 manufacture products here in New Zealand. 0:03:24.840 --> 0:03:26.399 You've heard it ad nauseum. 0:03:26.440 --> 0:03:29.399 The regulatory environment in New Zealand doesn't lend itself well 0:03:29.440 --> 0:03:32.519 towards export, and yes, there has been some changes recently, 0:03:32.919 --> 0:03:34.960 but as you sort of work into the big wide 0:03:35.000 --> 0:03:38.200 world of cannabis, that's a very competitive world out there, 0:03:38.200 --> 0:03:40.680 and New Zealand is going to be a minnow in 0:03:40.720 --> 0:03:42.960 the scheme of things. So we've taken a view that 0:03:43.000 --> 0:03:46.040 we can't really get a return on capital for manufacturing 0:03:46.080 --> 0:03:47.760 products here in New Zealand, and we looked at our 0:03:47.800 --> 0:03:52.920 strengths and we've got sort of our home and heart 0:03:53.000 --> 0:03:54.880 is in real Tortia. As you know, the founding story 0:03:54.880 --> 0:04:01.000 of the company is about the dream of creating jobs 0:04:01.040 --> 0:04:03.760 for the people of the East Coast, particularly Rhuatoria, and 0:04:03.800 --> 0:04:06.520 building on the strengths of the community as it relates 0:04:06.520 --> 0:04:10.240 to cannabis. And so we looked at what we were 0:04:10.240 --> 0:04:14.440 good at relative to others and we've landed on a 0:04:14.440 --> 0:04:18.600 business model which, yeah, it is different, and the way 0:04:18.640 --> 0:04:20.839 it's different is we've we've if you think about the 0:04:20.880 --> 0:04:25.320 value chain of like normal agribusiness, like if you took apples, 0:04:25.320 --> 0:04:28.200 for examples, you'd have apple seeds and then you'd sort 0:04:28.200 --> 0:04:32.400 of grow apple trees and then you'd create apples. 0:04:31.920 --> 0:04:33.400 Which would go into apple products. 0:04:34.240 --> 0:04:36.160 What we've done is we've sort of said like that 0:04:36.160 --> 0:04:40.920 that middle part of commercial cultivation and commercial manufacture, we're 0:04:40.920 --> 0:04:41.480 not going to do that. 0:04:41.520 --> 0:04:43.279 We're going to outsource that to others. But what we're 0:04:43.279 --> 0:04:44.440 really good at is we've got some. 0:04:47.720 --> 0:04:51.400 Links with good apple seeds or good cannabis genetics, and 0:04:51.440 --> 0:04:54.919 we've got distribution agreements with partners in the market, so 0:04:54.960 --> 0:04:59.800 we know sort of what distribution agreements distribution companies look 0:04:59.880 --> 0:05:04.200 like in overseas jurisdictions. And so we're going to outsource 0:05:04.240 --> 0:05:07.400 the capital intensive heavy bit in the middle, which is 0:05:07.440 --> 0:05:11.239 cultivating the apples or manufacturing the apples into apple pies 0:05:11.279 --> 0:05:13.880 if you like. But we're going to link our apple 0:05:13.920 --> 0:05:17.359 seeds cannabis genetics with apple pies or cannabis products in 0:05:17.360 --> 0:05:21.640 different markets around the world. Now that means we reduce 0:05:21.760 --> 0:05:25.360 the amount of money it takes. And so we've got 0:05:25.480 --> 0:05:32.200 a small team which works with cultivation partners to take 0:05:32.240 --> 0:05:35.159 our genetics and turn them into crops and products for 0:05:35.320 --> 0:05:36.239 overseas markets. 0:05:36.960 --> 0:05:39.960 What do you define as cannabis genetics just for listeners, 0:05:40.240 --> 0:05:41.520 so we understand. 0:05:42.520 --> 0:05:45.719 Yeah, well, cannabis genetics is either like a cannabis seed 0:05:45.800 --> 0:05:48.520 or a small cannabis plant, like if it was an apple, 0:05:48.720 --> 0:05:50.880 an apple seed or a small sort of apple plant 0:05:50.960 --> 0:05:54.680 ready to go. Cannabis is easily cloned, so you can 0:05:54.680 --> 0:05:58.960 sort of take clones and tissue cuttings off the plant 0:05:59.120 --> 0:06:02.680 and export that, or you can sort of go to 0:06:02.760 --> 0:06:04.560 other people and so to say take this plant and 0:06:04.600 --> 0:06:06.320 propagate it into a commercial crop, please. 0:06:06.760 --> 0:06:07.640 So that's what we're doing. 0:06:07.920 --> 0:06:11.120 So are the hundreds of varieties of cannabis in that 0:06:11.279 --> 0:06:14.200 you could be finding unique strains and you're discovering and 0:06:14.200 --> 0:06:17.760 breeding those. That is that a fear summation of what 0:06:17.800 --> 0:06:18.280 you're doing? 0:06:19.040 --> 0:06:24.719 Hundreds probably thousands, like yeah, and it's really it's it's 0:06:24.760 --> 0:06:29.279 fascinating because you know, like apple's there's like standard breeds 0:06:29.279 --> 0:06:32.839 and Cawi fruits have got certain varieties, and but like 0:06:33.200 --> 0:06:36.919 cannabis is is it's really exciting because it's been in 0:06:36.960 --> 0:06:40.400 the black market for nine on seventy years all around 0:06:40.400 --> 0:06:42.599 the world, and like you've got this whole industry which 0:06:42.640 --> 0:06:45.600 is essentially coming out of a black market. So how 0:06:45.600 --> 0:06:50.239 do you define a cannabis variety is a real curious question. 0:06:51.760 --> 0:06:55.400 So there's lots of people who've been growing cannabis, as 0:06:55.440 --> 0:06:57.800 we know, in the community for like all those years, 0:06:57.800 --> 0:07:02.559 and in the black market, and so it's they've got 0:07:03.160 --> 0:07:07.479 varieties and cannabis genetics that they've been breeding for a 0:07:07.480 --> 0:07:10.440 long period of time. So we're using some of those 0:07:10.520 --> 0:07:13.360 and taking them into the market. And New Zealand's really 0:07:13.400 --> 0:07:15.800 quite unique New Zealand. One of the good things about 0:07:15.800 --> 0:07:18.000 the New Zealand regulations that they put. 0:07:17.880 --> 0:07:19.560 In place that. 0:07:21.080 --> 0:07:25.360 Was the fact that you're allowed to under the regulations 0:07:25.520 --> 0:07:28.720 bring illicit genetics from the black market into the legal 0:07:28.760 --> 0:07:32.520 framework and all of a sudden, it's legal now Canada, 0:07:32.520 --> 0:07:36.560 but Canada had a similar amnesty situation, but that lasted 0:07:36.600 --> 0:07:39.600 for six months. But what we've done, we in New 0:07:39.680 --> 0:07:42.960 Zealand have a permanent amnesty if you're like so with 0:07:43.080 --> 0:07:47.400 links to the black market and links to some illicit growers, 0:07:47.440 --> 0:07:51.480 we can bring varieties into the legal framework that aren't 0:07:51.800 --> 0:07:56.760 necessarily available to other consumers around the world or patients 0:07:56.760 --> 0:07:57.360 around the world. 0:07:58.520 --> 0:08:01.800 Now, there's also a couple of aspects to your model. 0:08:02.000 --> 0:08:04.680 There's a breeding and development which you've just explained, but 0:08:04.720 --> 0:08:09.000 there's also you on sell products from other manufacturers. Can 0:08:09.040 --> 0:08:10.000 you tell us a bit about that? 0:08:11.080 --> 0:08:12.880 Yes, so part of our strategy. 0:08:13.400 --> 0:08:16.560 So what I just outlined is our is our absolute 0:08:17.200 --> 0:08:20.920 commitment is to take strains from our community, varieties from 0:08:20.920 --> 0:08:21.960 our community. 0:08:21.680 --> 0:08:23.400 Outsource the cultivation. 0:08:24.760 --> 0:08:28.760 And manufacturing, and deliver those products into the markets that 0:08:28.760 --> 0:08:32.040 we choose, which is UK, Germany, Australia and New Zealand. 0:08:32.840 --> 0:08:34.400 But of course that actually takes time. 0:08:34.440 --> 0:08:37.760 Now, the thing with cannabis, it falls under a medicinal 0:08:37.840 --> 0:08:40.320 or a pharmaceutical regime that the process of doing that 0:08:40.360 --> 0:08:43.200 takes time. But in the meantime, heck, we need money. 0:08:43.240 --> 0:08:46.439 We're absolutely focused on sales and revenue and getting a 0:08:46.520 --> 0:08:48.960 return for our shareholders in the very short term. What 0:08:49.000 --> 0:08:51.119 we do is we call it we set up the pipelines, 0:08:52.280 --> 0:08:56.080 and that's basically ensuring that within each of the key 0:08:56.200 --> 0:08:58.600 jurisdictions that we operate in. In the first instance, we 0:08:58.679 --> 0:09:01.840 might have to buy someone else's genetics if you like, 0:09:02.080 --> 0:09:04.240 the apple seeds, if you like. So we use someone 0:09:04.280 --> 0:09:06.800 else's to get the pipeline going, and then we are 0:09:06.880 --> 0:09:11.200 filling those pipelines over the next one two, three years 0:09:11.520 --> 0:09:15.360 with genetics from our community. So that's quite that's quite different. 0:09:15.400 --> 0:09:16.839 We're sort of not sort of saying we're going to 0:09:16.880 --> 0:09:19.560 manufacture everything ourselves. We're saying we're going to work with 0:09:19.640 --> 0:09:24.760 other manufacturers and cultivators to create products using our genetics. 0:09:25.360 --> 0:09:28.199 So we think about those markets, then whats of relationships 0:09:28.240 --> 0:09:32.240 you have in those markets with new distributors. I mean, 0:09:32.280 --> 0:09:34.720 how does that work, because that's pretty key obviously if 0:09:34.760 --> 0:09:38.400 you're wanting to generate revenue and also what would be 0:09:38.480 --> 0:09:41.760 the revenue split. I mean, as you say the cultivation 0:09:42.280 --> 0:09:45.360 or the breeding sorry and the like does take time 0:09:45.840 --> 0:09:48.360 at the moment, would be the revenue that's coming more 0:09:48.440 --> 0:09:53.120 from those cultivars and the light that you're sourcing from 0:09:53.160 --> 0:09:54.040 other companies. 0:09:55.240 --> 0:09:59.079 Well, look, if he questions about like. 0:10:00.920 --> 0:10:03.800 Where do we think the relative profitability and sales are 0:10:03.800 --> 0:10:06.959 going to come from in the future, just walking through it, 0:10:07.520 --> 0:10:10.280 we've got four key markets that we're focused on Germany, UK, 0:10:10.559 --> 0:10:14.760 Australia and New Zealand, and we think fundamentally in the 0:10:14.800 --> 0:10:17.600 short medium term Germany and Australia are going to be 0:10:17.600 --> 0:10:25.600 the key key drivers of revenue and therefore associated profit margin. Germany, 0:10:26.080 --> 0:10:30.480 we launched our first product there last year. We're launching 0:10:30.520 --> 0:10:36.880 our second product there in Germany next week, and that's 0:10:36.920 --> 0:10:39.800 a really exciting market at the moment. As of the 0:10:39.840 --> 0:10:46.200 first of April, the regulations changed in Germany which allowed cannabis. Like, 0:10:46.600 --> 0:10:48.920 there's a lot of detail, but fundamentally, what it's meant 0:10:48.960 --> 0:10:52.320 is that cannabis is now more widely prescribed than it 0:10:52.440 --> 0:10:53.680 was before the first of April. 0:10:53.720 --> 0:10:54.559 There is very. 0:10:54.400 --> 0:10:58.920 Strong demand in Germany and launching product. 0:10:59.120 --> 0:11:02.000 Can we just be clear the reason that is in 0:11:02.040 --> 0:11:04.800 demand is for what mainly pain relief? 0:11:05.600 --> 0:11:06.880 Yeah yeah, yeah, pain relief. 0:11:06.880 --> 0:11:10.440 It's all through a medicinal framework, so you have to 0:11:10.440 --> 0:11:15.080 have a doctor's prescription no matter what. So what's happened 0:11:15.120 --> 0:11:17.959 is because, like I said, it's a little bit in the. 0:11:17.920 --> 0:11:19.679 Detail, but it's it's rigid. 0:11:19.800 --> 0:11:22.440 It's come down the schedule of controlled drugs, which has 0:11:22.480 --> 0:11:26.240 made it easier for prescribers in Germany to prescribe cannabis. 0:11:26.559 --> 0:11:27.520 And what that's done is. 0:11:27.520 --> 0:11:31.520 It's opened up opened up more patients and more avenues 0:11:31.559 --> 0:11:32.920 for doctors to prescribe. 0:11:32.920 --> 0:11:33.880 It's a little bit easier. 0:11:33.880 --> 0:11:36.120 So what's that You've got an increase in demand since 0:11:36.120 --> 0:11:41.520 the first of April for patients predominantly, seventy percent of 0:11:41.559 --> 0:11:45.840 the prescriptions are for pain relief, typically chronic pain. You've 0:11:45.840 --> 0:11:48.720 got a next twenty or thirty percent is for anxiety 0:11:48.800 --> 0:11:54.600 stress PTSD, those sorts of conditions. So Germany is a 0:11:54.679 --> 0:11:57.040 very strong market at the moment and we're really excited 0:11:57.040 --> 0:11:58.920 to be actually putting a product in there next week. 0:12:00.000 --> 0:12:01.440 We think that that's going to go really well. 0:12:02.240 --> 0:12:08.239 Nimbus Health where are distributors over there, really supportive, extremely professional, 0:12:08.280 --> 0:12:11.160 and we've got a really good relationship with them, so 0:12:11.360 --> 0:12:12.679 that'll go well. 0:12:12.840 --> 0:12:13.839 Australia is. 0:12:16.120 --> 0:12:22.000 A very big, strong, growing market. It's got lower regulatory hurdles, 0:12:22.040 --> 0:12:24.040 easier to get into the market, so it's actually a 0:12:24.120 --> 0:12:27.680 lot more competitive. And we've got a guy on the 0:12:27.679 --> 0:12:30.880 ground over there who is our business development manager and 0:12:31.120 --> 0:12:34.240 he's got a number of distribution channels that we work 0:12:34.320 --> 0:12:38.600 with and the sales are growing over that over in Australia, 0:12:38.720 --> 0:12:42.720 but it's a slightly different environment insofar as the regulations 0:12:42.720 --> 0:12:46.000 that are in place. So because of the size of it, 0:12:46.120 --> 0:12:47.840 we think it's just going to be a bit of 0:12:47.840 --> 0:12:51.320 a cornerstone of our revenue and profit margin going forward. 0:12:52.280 --> 0:12:55.280 And those are the two, like Germany and Australia are 0:12:55.280 --> 0:12:59.600 the big ones, and then you've got UK, which is 0:13:00.280 --> 0:13:02.240 in general terms, i'd sort of say two or three 0:13:02.320 --> 0:13:05.920 years behind Australia and Germany in terms of its growth. 0:13:06.559 --> 0:13:09.400 It's got a different environment so far as the specialists 0:13:09.520 --> 0:13:13.280 have to prescribe the product. But what that means is 0:13:13.280 --> 0:13:15.360 is that as they build up the systems, that's only 0:13:15.400 --> 0:13:18.240 going to yield growth in so far as it's a 0:13:18.320 --> 0:13:21.800 very big market. You've got a population of sixty sixty 0:13:21.800 --> 0:13:25.480 odd million people and we know that there's demand and 0:13:25.520 --> 0:13:26.920 the graphs are all going up in the. 0:13:26.960 --> 0:13:30.240 UK that BIG's a question too about New Zealand is 0:13:30.840 --> 0:13:33.520 if those are the three markets, with Germany and Australia 0:13:33.520 --> 0:13:37.840 being the top ones, is there any potential here or 0:13:37.880 --> 0:13:40.319 is it more that you're focused on the export well. 0:13:40.320 --> 0:13:44.640 From an early early stage in our development, we've always 0:13:44.679 --> 0:13:48.720 realized that we have to focus on export markets to 0:13:48.720 --> 0:13:52.559 get a return on capital. I love New Zealander bits, 0:13:52.720 --> 0:13:55.199 it's awesome, and we will be bringing product to the 0:13:55.240 --> 0:13:58.120 New Zealand market, but we're never going to be able 0:13:58.120 --> 0:14:00.160 to get a return on capital that we need we 0:14:00.200 --> 0:14:05.240 focus on export markets and so yes we will be 0:14:06.120 --> 0:14:08.000 we will be bringing product to the New Zealand market. 0:14:08.040 --> 0:14:10.320 In fact, we've got to approved recently by the New 0:14:10.440 --> 0:14:14.079 Zealand Ministry of Health or Medicinal Cannabis Agency, and those 0:14:14.120 --> 0:14:18.360 products come in to market very soon, but we do 0:14:18.440 --> 0:14:20.520 know in our spreadsheets and our graphs it's always going 0:14:20.560 --> 0:14:22.720 to be a lot smaller. It's the population, of course, 0:14:23.800 --> 0:14:26.239 but it's our home market and we have a compassionate 0:14:26.280 --> 0:14:30.440 access program here which we certainly want to support local 0:14:30.480 --> 0:14:34.400 members of our community. So yeah, and in terms of 0:14:34.440 --> 0:14:37.560 profit margin, it's number four, but it's necessary. 0:14:37.840 --> 0:14:41.080 And we're talking cannabis oil, are we and the flowers? 0:14:41.080 --> 0:14:44.720 The dried flowers. Is that what a patient might use 0:14:44.760 --> 0:14:45.880 or a doctor might prescribe. 0:14:46.040 --> 0:14:50.800 Yeah, So the product formats in all four key markets, 0:14:52.040 --> 0:14:55.600 you pretty much have two main product formats. Dried flour 0:14:56.000 --> 0:15:01.000 as a herbal medicine which you would vaporize, and oil 0:15:01.600 --> 0:15:05.560 which you would put under your tongue oral oil basically, 0:15:05.840 --> 0:15:08.760 and those two formats are the dominant ones. You're seeing 0:15:08.760 --> 0:15:11.240 a lot of growth in Germany and dried flower formats 0:15:12.000 --> 0:15:15.480 and that's where our genetics from the community sort of 0:15:15.480 --> 0:15:19.720 play into that sort of format more so than the oils. 0:15:20.040 --> 0:15:23.760 Okay, So in New Zealand, particularly with the listed companies, 0:15:23.760 --> 0:15:26.040 it has been pretty tough. As I said at the beginning, 0:15:26.680 --> 0:15:31.040 you've got a number of companies and we've had quite 0:15:31.080 --> 0:15:34.240 a tough time in terms of raising capital for those companies. 0:15:34.680 --> 0:15:37.320 Sheer prices have been in the dul drums. Let's get real, 0:15:37.560 --> 0:15:41.200 there's been nothing too great there for retail investors. You're 0:15:41.200 --> 0:15:45.440 pretty confident that you can turn things around. We've obviously 0:15:45.480 --> 0:15:49.320 had recently with cheeses investors. A lot of them are 0:15:49.360 --> 0:15:53.320 in Canna South and they have obviously in bonduntary administration. 0:15:53.520 --> 0:15:58.840 So the environment is quite tough and particularly for retail 0:15:58.920 --> 0:16:01.360 investors trying to figure the out. But you you seem 0:16:01.400 --> 0:16:04.160 to think that right, okay, we've changed our model, we 0:16:04.280 --> 0:16:06.760 can actually go of a different path, and you're pretty 0:16:06.800 --> 0:16:10.200 confident that you can, you know, reap some rewards. 0:16:10.640 --> 0:16:15.040 Oh look, I'm extremely confident because we took a really 0:16:15.080 --> 0:16:17.520 hard decision as a company eighteen months two years ago. 0:16:19.720 --> 0:16:21.440 You know, there's a tough decision to shut down our 0:16:21.480 --> 0:16:25.400 manufacturing because you know, I mean I myself basically designed it, 0:16:25.480 --> 0:16:25.840 planned it. 0:16:25.880 --> 0:16:27.400 We've been working. 0:16:27.160 --> 0:16:29.400 For years on what we're going to do in manufacture 0:16:29.400 --> 0:16:31.000 in New Zealand and that was the hope and the dream. 0:16:31.480 --> 0:16:33.560 But is that the real plant? 0:16:33.640 --> 0:16:37.960 Paul Letson Realtoria, is that the no, this one's in Gismon, 0:16:38.080 --> 0:16:41.480 So just a Yeah, we've got two facilities a cultivation 0:16:41.560 --> 0:16:46.720 and realtorting and manufacturing which looks like extraction and bottling 0:16:47.720 --> 0:16:48.880 an aspect like that in Gisbon. 0:16:48.920 --> 0:16:50.640 So we had to shut the Gismond one down. I mean, 0:16:50.680 --> 0:16:55.120 the reality is costs a lot of money. So we 0:16:55.200 --> 0:16:58.360 made the decision about eighteen months two years ago. And 0:16:58.720 --> 0:17:01.880 we've been talking with this tub is in Germany and 0:17:01.920 --> 0:17:04.199 Australia for a number of years, so we're sort of 0:17:04.880 --> 0:17:08.840 we understand where we think we can add value. So 0:17:09.880 --> 0:17:12.200 so yeah, I'm confident because A we've got a low 0:17:12.280 --> 0:17:19.440 cost base and b we're in three markets now and 0:17:19.560 --> 0:17:21.920 by October we'll be in the. 0:17:21.960 --> 0:17:25.520 UK with a portfolio of products. So in three to. 0:17:25.480 --> 0:17:28.440 Four months time we'll be in four markets with four 0:17:28.440 --> 0:17:33.000 revenue streams. Now the challenge will be like growing those 0:17:33.040 --> 0:17:38.159 sales and telling the rule story. And we've got some 0:17:38.520 --> 0:17:41.640 we've got something different. We're actually different to many other 0:17:42.280 --> 0:17:45.160 cannabis companies in New Zealand and around the world insofar 0:17:45.200 --> 0:17:47.399 as we've got genetics on the front end of the 0:17:47.440 --> 0:17:49.920 value chain and we've got distribution channels out the other 0:17:50.000 --> 0:17:54.199 with a strong grounded brand in our values basically and 0:17:54.320 --> 0:17:56.679 we're linking the two of those up. There's lots of 0:17:56.680 --> 0:17:59.359 companies who do distribution, lots of companies have got brands, 0:17:59.440 --> 0:18:03.440 lots of company are telling a unique story, and lots 0:18:03.480 --> 0:18:05.440 of companies are doing genetics on their own. But there's 0:18:05.440 --> 0:18:08.320 no one doing genetics on the one hand and putting 0:18:08.359 --> 0:18:11.119 that through a value chain and branding it out the 0:18:11.119 --> 0:18:15.760 other end with a strong New Zealand centric brand focused 0:18:15.800 --> 0:18:19.440 on sort of our founding community and telling that story proudly. 0:18:19.840 --> 0:18:22.240 So yeah, I do think we're extremely different, and I 0:18:22.240 --> 0:18:23.840 do think we've got a bright future for sure. 0:18:24.560 --> 0:18:26.159 No one's saying it's tough, not tough. 0:18:26.400 --> 0:18:30.320 It's definitely tough, and I honestly we've been at this 0:18:30.400 --> 0:18:33.880 for five years and look at where we are now. 0:18:33.920 --> 0:18:36.679 We're still like some of the markets where we're just 0:18:36.720 --> 0:18:39.560 getting into the UK. So it's long and tough and arduous, 0:18:39.560 --> 0:18:46.520 and that's necessarily it's the face of this industry because 0:18:46.560 --> 0:18:49.680 of the fact it comes under a pharmaceutical medicinal regime. 0:18:49.760 --> 0:18:51.639 I mean, there's no I mean, I can't change the 0:18:51.680 --> 0:18:55.120 regulations as much i'd love to, but we're playing within 0:18:55.160 --> 0:18:58.040 the sandpit that we've got, and within this sandpit We've 0:18:58.040 --> 0:19:00.639 got some fence posts and some guardrails which are governed 0:19:00.680 --> 0:19:02.800 by governments and regulator around the world, and we've just 0:19:02.800 --> 0:19:04.880 got to play with that, which means, yes, it does 0:19:04.960 --> 0:19:07.320 take time. And I'm really sorry to investors for that, 0:19:07.720 --> 0:19:09.000 but that's the reality. 0:19:10.600 --> 0:19:12.080 These things just do take time. 0:19:12.400 --> 0:19:14.240 I suppose there will be some proof in the pudding, 0:19:14.359 --> 0:19:17.639 and maybe it's too soon come into August when you 0:19:17.680 --> 0:19:20.840 announce your full year results. I see that you don't 0:19:21.040 --> 0:19:24.480 give forecasts. That's quite tough for retail investors. I mean, 0:19:24.520 --> 0:19:28.360 how do they become informed and how do they know 0:19:28.480 --> 0:19:32.200 that what they're backing, you know, has some substance if. 0:19:32.160 --> 0:19:37.600 You like, Yeah, that's a good question. We're loath and 0:19:37.920 --> 0:19:40.800 reluctant to put out forecast. This is like, I mean, 0:19:41.320 --> 0:19:43.720 I still think this industry is a very new and 0:19:43.760 --> 0:19:47.720 early industry. We're starting to bed down some of the 0:19:47.720 --> 0:19:50.000 pipelines and bed down the processes and it's. 0:19:49.840 --> 0:19:52.040 Becoming a little bit more systematic and formulae. 0:19:52.640 --> 0:19:55.600 Just wondering though about your model you talk about in 0:19:55.640 --> 0:19:59.320 your commentary being capital like, can you kind of explain 0:19:59.359 --> 0:20:00.280 what you mean by that? 0:20:00.800 --> 0:20:04.200 Well, we've got very low overheads, we've. 0:20:05.640 --> 0:20:10.080 Very small number of employees relative to our potential. I 0:20:10.080 --> 0:20:14.679 mean we've got I think thirteen people, not all full time. 0:20:16.320 --> 0:20:19.760 We as I said, we've closed down our manufacturing facility 0:20:20.400 --> 0:20:22.679 and we're looking to sort of capitalize on that and 0:20:22.720 --> 0:20:25.440 sell that and turn that into cash. 0:20:25.760 --> 0:20:29.480 We've got our Rualtoria facility. When we built the Rualtoria facility, we're. 0:20:29.280 --> 0:20:32.879 Well conscious of sort of saying let's let's let's not 0:20:32.960 --> 0:20:36.560 over capitalize, which build a small, minimum viable sort of 0:20:36.600 --> 0:20:40.520 operation sort of to prove, to prove what's possible, because 0:20:41.040 --> 0:20:43.439 we didn't really know how the regulations we're going to go. 0:20:43.720 --> 0:20:47.520 No one knows how the market's going to evolve. So 0:20:47.640 --> 0:20:50.640 that's what we mean by capital We've spent small amounts 0:20:50.640 --> 0:20:53.680 in Rutoria and we've got a small team. We don't 0:20:53.680 --> 0:20:57.640 have a large manufacturing environment, so that's what we mean. 0:20:57.960 --> 0:21:01.520 What about cash, Boon and Kesh, if you don't give forecasts, 0:21:01.600 --> 0:21:03.679 can you tell us a bit about those? 0:21:04.760 --> 0:21:07.399 Yeah, So I mean I can answer that sort of. 0:21:07.760 --> 0:21:09.560 You know, over the last eighteen months. 0:21:09.280 --> 0:21:12.240 To two years, we've reduced our cash bean by about 0:21:12.359 --> 0:21:18.280 fifty percent were we were consuming about you know, three 0:21:18.359 --> 0:21:21.240 point eight million in cash in a six month period. 0:21:23.240 --> 0:21:24.000 Two years ago. 0:21:24.240 --> 0:21:26.880 Now we're down to less than half that, at sort 0:21:26.880 --> 0:21:29.119 of about one point six million in a six month period. 0:21:29.240 --> 0:21:33.480 So yeah, we've taken the view that we cannot keep 0:21:33.560 --> 0:21:34.680 spending the amount of money. 0:21:34.520 --> 0:21:37.320 That we were inevitably leads me to think that you 0:21:37.520 --> 0:21:40.280 probably need to capital raise. I know that you are 0:21:40.359 --> 0:21:43.320 looking at various options. Can you shed any light on 0:21:43.320 --> 0:21:44.080 that for us? 0:21:44.760 --> 0:21:47.040 Well, no, I can't really go into a lot of details, 0:21:47.080 --> 0:21:49.400 suffice to say that yet we are looking at options. 0:21:50.640 --> 0:21:53.240 I mean I look at all the options for our 0:21:53.280 --> 0:21:55.840 cash in and our cash out, and as we increase sales, 0:21:55.840 --> 0:21:58.440 obviously we need less cash and we're on the cusp 0:21:58.440 --> 0:22:01.840 of increasing sales as sort of in Germany in the UK. 0:22:02.640 --> 0:22:06.040