SpeakEasy Cannabis Club Ltd. (CSE: EASY) (Frankfurt: 39H) (the “Company” or “SpeakEasy“) a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act, is proud to announce it has received an amendment to its licence to include 13,300 sq ft of its 53,200 sq ft new facility which will be used to process the Company’s outdoor crop, which is currently being harvested.

Amendment to License means 13,300 sq ft of Licensed Processing Space with an Additional 39,900 sq ft of Future Production Area

The licence amendment approved by Health Canada includes:

• an additional 13,300 sq ft of processing and secure storage space in the Company’s newly licenced cannabis facility, will be used for extractions, concentrates and flower processing labs, occupying 1 of the 4 floors of the complex,
• the remaining 39,900 sq ft of the facility is nearing completion and will be used for flower production, which once fully operational, will provide an estimated 2,000 pounds (indoor craft cannabis) per month,
• fully encloses the SpeakEasy cannabis campus with the addition of 6 acres and a combined total of over 63,200 sq ft of production and processing space.

Founder, Marc Geen states, “The next chapter of SpeakEasy begins with this amendment. Demand for extracts, concentrates and value-added products have been steadily increasing in the market and we are in an excellent position to take part in a big way. With our outdoor harvest nearing completion, we will have a large supply of input material perfectly suited for extract and concentrate products that gives us a significant price advantage over others in the industry.“

A Process to Increasing Shelf Life and Margin

The type of genetics chosen, combined with the harvest and storage methods used for SpeakEasy’s outdoor facility, all tie into the creation of extracts and concentrates that the Company plans to manufacture in the newly licenced facility.

With this processing amendment, the Company is one step closer to becoming vertically integrated, allowing SpeakEasy to have full control over developing the consumer end product while increasing margins substantially.

By processing the plant into extract material, the new substance, or finished product, will have an increased shelf life as concentrates are less subject to environmental conditions with the ability to stay shelf stable for a longer duration of time.

Geen further states, “SpeakEasy has always intended on becoming fully vertically integrated by taking full advantage of our large and economical input material and creating high value, in-demand products that carry increased profit margins. Our outdoor harvest material is perfectly suited to create a range of products at a cost that makes SpeakEasy extremely competitive. We‘ve made the tough choices and stuck to our philosophy, it is time to take the next step and turn all the work and planning into products and sales.“

Extract Market is the Fastest Emerging Category in the Cannabis Sector

The extract consumer experience, coupled with cannabis 2.0 only allowing extract to enter the Canadian market in 2019, has created supply limitations.

Cannabis 2.0 products that consumers are reaching for are vast, while continuing to show innovation. Today, the extract products span from shatter, live resin, rosin, hash, diamonds, terp sauce, to an array of vape juices and we expect new products to emerge in the coming years.

Consumers are choosing to purchase extract products because they present a significant improvement in their experience including:

• Consistency – the dose can be refined more precisely and shelf stable for consistent experience.
• Convenience – consumers are seeking solutions that are easy, portable and discrete.
• Potency – consumption that is required less often and offers a higher THC dosage.
• Value – the high potency translates to fewer sessions and more savings.

Ernst and Young estimates that extracts will grow from the current 10% of the market to 37% in 2025, while dried flower will shrink from 84% to 46% over that same time period.

Additionally, BISWorld estimates that revenue for the Canadian cannabis industry is set to reach $3.5B in 2020, with cannabis extracts sales totaling $350 million. Although industry revenue is only projected to rise an annualized 4.7% to $4.4 billion cannabis extracts are projected to grow by 365% over the five years to 2025.