Biome Grow goes public on the CSE while continuing to target underserved cannabis markets in Canada
By Jacqueline Havelka
Oct 09, 2018
On Tuesday Biome Grow, the parent company to four wholly-owned subsidiaries including a Licensed Producer under the ACMPR out of Novia Scotia began trading on the Canadian Securities Exchange under the ticker BIO. The company’s niche in the cannabis industry is location. While most of Canada’s Licensed Producers are based in either British Columbia or Ontario, Biome Grow is based in Canada’s underserved Atlantic Provinces, including New Brunswick, Newfoundland and Labrador, Prince Edward Island, and Nova Scotia.
“Listing on the CSE represents a significant milestone in the growth and expansion of Biome as we continue to build a Canadian cannabis conglomerate,” said Khurram Malik, Interim Chief Executive Officer of Biome in a statement. “We believe public listing will provide Biome increased visibility with prospective global investors, improved liquidity, and a more diversified shareholder base as we continue to grow through agreements, partnerships, and acquisitions across Canada and globally.”
A back-to-basics business model for the cannabis industry
Biome Grow offers investors an opportunity within a landscape that is becoming increasingly crowded. In the Atlantic provinces, Biome Grow is focused on the development of strong regional producers. The company is building out local facilities that are run by local management teams. In total, Biome Grow currently has 390,000 square feet of production across the Atlantic provinces.
The company owns the subsidiary Highland Grow, one of only three Nova Scotia Licensed Producers; the cultivation license was awarded late in 2017, and a sales license amendment is imminent. In early 2019, Highland Grow will begin a major expansion project. Back Home is Biome Grow’s subsidiary in Newfoundland and Labrador. The subsidiary is currently undergoing the review stage for their ACMPR licensing. They are also in the first phase of a four-phase expansion and retrofitting project.
Biome Grow also has a presence in Ontario with P-209, but the company is not planning on competing in the crowded Ontario market. Instead, their P-209 subsidiary is a late stage applicant purposed to supply the efforts in the Atlantic Provinces.
One of Biome Grow’s strengths is their management team with its broad experience base in everything from capital markets to commercialization and ACMPR licensing to facility design. Their management and advisory teams have experience in both the medical and recreational markets.
Biome Grow’s board of directors has vast experience. Steven Poirier was a former President of Moosehead Breweries and brings his extensive alcohol beverage industry expertise to the table. Mark Lievonen brings experience from the biopharmaceutical industry, having served as former President of Sanofi Pasteur Limited. George Smitherman is a veteran politician and has held key ministry positions in the Ontario provincial government, including Deputy Premier of the Ministry of Health. Finally, Brett James is a principal and partner of Sussex Strategy Group, bringing his federal government relations to the mix; the company has assisted many applicants to Canada's ACMPR program.
Biome Grow’s business model identifies regional producers that need the assistance of a larger entity to get through the very complicated Canadian licensing process. Here’s how it works: Biome Grow acquires the regional producer, who then benefits from the company’s talent and its money. Brands and the acquired company both remain local as a “born and raised” provincial brand.
Perhaps Biome Grow’s most significant technological asset is their most compelling one of all. The company created a virtual reality for weed with its Weed VR platform. Weed VR uses cutting-edge virtual reality technology to offer the cannabis industry a number of very useful applications: e-commerce for retailers, marketing for certain brands, customer shopping experiences, and educational tools for both medical patients and recreational consumers alike.
The Weed VR platform is in the late stages of development and will initially launch as a cannabis strain virtual library and later for Biome Grow’s own product and brand catalog. The company also intends to sell and license the technology to other businesses.
“Biome is unique through the diversity of our holdings, and in that, we are steered by some of the best leaders and experts in the cannabis industry, from finance, life science technologies, regulatory affairs, pharmaceuticals, business building, and marketing,” added Malik in a statement. “We are poised to be leaders in Canada’s cannabis industry with pending legalization, while keeping our eyes squarely on the burgeoning global market, and today’s listing on the CSE positions us to realize even greater success.”
Biome Grow has a tried-and-true model of moving into an underserved market, developing a strong local presence, and then building that identity and consumer confidence before expanding into other areas.
Biome Grow started with a solid foundation by using this approach in Canada’s regional underserved provinces, but going public signals that they have big plans on the horizon—not only for other Canadian provinces but other countries. Because Canada has set the standard for how a federally regulated cannabis market can work, Canadian-based companies have a leg up on all aspects of the business, including how to import and export to and from other countries with emerging legal markets.
The company is taking one step at a time and intends to fully develop and create sustainability for its regional Canadian businesses before looking to larger international markets. In the long run, however, Biome Grow will be looking to develop regional brands that can one day expand to national or even international markets.
*An earlier version of this article incorrectly stated that Biome Grow began trading on Monday, and that the Atlantic Provinces constitute 50 percent of Canada's population.