SpeakEasy Announces Entering Final Stage of Amended Sales Licensing for Extracts and Concentrates

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 pleased to announce that it has entered the final stage of amending its sales license to allow the sale of its extracts and concentrates.

Founder, Marc Geen, “Extractions and concentrates are a rapidly growing and an important part of the cannabis market in Canada.  We are eagerly anticipating our licence that once granted, will allow us to participate in this exciting segment of the market. With our large inventory of flower, perfect for creating extracts and concentrates, we are eager to enter the consumer extract market that will become an important part of our business for years to come. Because of our low-cost of production, we will be entering the market with the ability to be very competitive with anyone out there. These are very busy and exciting times and I am thrilled we will soon be able to show what we can do in this segment of the market.“

Extracts are one of the highest growth categories in Canada

The cannabis market in Canada is maturing to include value-added products similar to other markets in North America. According to Health Canada data¹, cannabis extracts (package unit sold), for the period between October and November, increased by 360% between 2019 and 2020, however still represents a small part of the total sales in the country.  Cannabis extract sales are expected to increase to mimic other markets that show such sales averaging 30-40% of all cannabis purchases. Additional data from Grand View Research² shows global sales of cannabis extract are US$7.3 billion per-year with a compound annual growth rate (CAGR) of 16.6%.  Management believes that the two major reasons for the slow start to value added sales in Canada are price and availability of these products. With the number of dispensaries growing across the country, availability and access is increasing exponentially. Addressing the price issue is more challenging given the industry’s high average cost of production and taxes.

This licence amendment substantially increases product offerings

Currently, SpeakEasy is licenced to sell its dried flower to consumers.  With the addition of its expected sales amendment, the Company will be well positioned to enter the market with a robust lineup of products ranging from simple artisan style concentrates to more complex live resin vape carts. Formulations have been prepared and brands are ready to launch upon receipt of the amendment. The ability to create a large and diverse range of products and be able to enter each market with a low price point is predicted to give SpeakEasy a significant advantage over companies without an outdoor flower production area.

Vertical integration for product development allows for competitive pricing

Keeping production and processing in-house is a critical way to keep costs low. SpeakEasy, in partnership with Frontier Labs, produces, processes and packages its product without losing margin to other companies by contracting out or taking on the cost of shipping between facilities. With SpeakEasy’s goal of competing directly with “black market” pricing, keeping costs as low as possible is crucial to our success. Starting with our low-cost input material, which is expected to be among the lowest in the industry, and carrying on to finished product by using efficient, cost effective methods completed in-house, SpeakEasy is able to pass those cost savings on to consumers and be a strong competitor in the market.

Founder, Marc Geen, states, “Having a price advantage, focusing on genuine high-quality and branding that is rooted in the legacy BC market will give us the opportunity to stand out from the crowd. We are a unique company for many reasons, and I believe we will be able to make ourselves well known for all the right reasons across the country.”