Uptick Newswire: With us today is Leith Pedersen, he is the President and Chief Strategy Officer of the company. Leith, welcome to the show.
Leith Pedersen: Good morning, happy to be here.
Uptick Newswire: You're a cannabis company operating in the world's two largest cannabis markets, Canada and California. That being said, can you give us an update on your California operations as your stock is one of the best performers in the last 30 days. Up fifty percent late in December, and I see you have a recent announcement, closing of a strategy distribution company, which would be the first time that you guys are actually making profits in California. Can you bring us up to speed?
Leith Pedersen: Absolutely. So just to recap from our last call. You know our focus in 2017 and 18 was really to secure, build, license, the necessary infrastructure to support the upcoming launch of the Sunniva house of brands. You know with Sunniva's steadfast assurance of providing safe, pesticide free products for consumers with the ability to produce on a very large scale. And as you know, that takes time.
California really is our main focus a this juncture as we have operating assets are there currently. And as we all know, it's the largest cannabis market in the world. But it's still riddled with non-compliant cannabis products. With an estimate that over 80 percent still contain harmful pesticides or chemicals. So in California we assembled four key pillars that we felt would feed into Sunniva's success in the future.
The first pillar being cultivation at scale. So we're building a very large scale, high-tech, purpose built greenhouse facility in Palm Springs. And this will allow us to produce premium flower, safe products, at scale, focusing more on the flower side. We have an operational extraction facility and this is where we produce our extracted products. You know the trend is moving towards a non-smokeable type product. So the extracted product; capsules, sprays, tinctures, vaporization, that's a focal point of ours. And then as you mentioned, distribution is sort of the last key pillar that you need, I think, for success in any cannabis market. What that does then, is all of these feed into your brands. And most important, I think, is that we're most happy about is, you know, we really have exceptional management teams running all of these divisions and communicating with each other.
So you know, at the end of last year we closed the acquisition of a leading California distribution company and sales team. They currently service over 120 licensed retail locations throughout the state. And what we're seeing is, not only the distribution companies, but the retailers are starving for clean, safe, reproducible products and brands. So, our extraction facility started operations in Q3 last year, and our extraction team spent four months getting in our 10,000 hours. You know, perfecting, and stockpiling the necessary inventory in all product categories in preparation for our brand sales.
We started this year off with about 5 million dollars in inventory, and then two weeks ago, we were very pleased to announce that we commenced revenue and sales in California with these product lines under our Sunniva house of brands. In addition to that, we were actually able to secure future purchase contracts from major retailers, and within the first three weeks we secured over 8 million dollars sales contracts within the first three months. And we anticipate securing additional monthly contracts throughout the whole year as we ramp up our production capabilities.
Uptick Newswire: That's incredible.
Leith Pedersen: So all in all we're pretty excited. We're finally in the market. It takes a long time to build the correct infrastructure, but we really wanted to do it right. So we are in the market today, making money, and that's most important for our company and our shareholders.
Uptick Newswire: Well let's talk about vertically integrated cannabis companies in California like Sunniva. Are there a lot of them?
Leith Pedersen: It's still very much a fragmented industry. There are some companies out there that have one or two of the key verticals, not many have the full vertical integration that you seen, that evolution in the very successful Canadian companies. And really the reason being is it takes a long time to build that infrastructure correctly, especially the cultivation at scale. You have a lot of people still growing under lights, or still trying to retro fit, or still going outdoors, but what we've seen with the case study in Canada is that you really need a purpose built facility where you control everything.
Uptick Newswire: Absolutely.
Leith Pedersen: For the assurance of your success. And putting in that time, and that capital, in the end certainly pays off. Because if you have one bad crop or something, and you're doing the other route, you can really kill a brand out of the shoot if you're not able to produce reproducible products again at scale.
Uptick Newswire: My guest today is Sunniva Inc. You can find them on the OTCQX under the ticker symbol SNNVF, you can find them on the CSE up there in Canada under the Canadian Stock Exchange under the ticker SNN, and with us today is the President and Chief Strategy Officer, Leith Pedersen. Leith, let me ask you this? What should investors be paying attention to from the Sunniva standpoint as far as milestones in 2019, and what can they look forward to?
Leith Pedersen: I think this market has really turned, as it should, into *indistinguishable* to volume very quickly. Initially a lot of promotion, etcetera, around the cannabis sector as you would in any pioneering industry. Really in the end it's all about top line and bottom line, and I think people should really pay attention to the pillars we've put in place, especially in California, we're in the market today, selling all major cannabis products under our house of brands. We've secure compliant distribution, which was a major pillar in California, which allows us to secure shelf space both today and in the future. And our upcoming greenhouse, that will provide large scale, high quality flower. At capacity it will produce 50 million grams a year of premium flower and other biomass that we can use for extraction. So I think everyone should just pay attention to our execution. This is the year of execution, and that should translate into top line and bottom line. I would have people focus really on that. The top line and bottom line and our execution skills in 2019.
Uptick Newswire: Leith, I want to thank you for stopping by. Coming on this show. If you're looking to get into a cannabis company that's operating in both of the two largest world markets in cannabis, Canada and California, look no further than Sunniva Inc. on the CSE trading under the ticker symbol SNN. Also on the OTCQX, ticker symbol SNNVF. I want to thank you for stopping by, wish you nothing but continued success. Hopefully you come back on the show here in about forty or fifty days, give us on update on what's going on.
Leith Pedersen: Absolutely, thank you for having me.
Disclosure: I am/we are long SNNVF.