It hasn’t been long since The Dales Report last sat down with CEO Michael Forbes of Adastra Labs (CSE: XTRX), but since then the company has signed an agreement with a large producer of craft cannabis, expanding its portfolio even further.
Shifting With the Market
Adastra recently announced the signing of a supply agreement with Sitka Weedworks, a licensed cultivator of craft cannabis based on Vancouver Island, B.C. The micropark is home to 51 micro cultivators specializing in high-quality cannabis, with some cultivars reaching THC levels as high as 34 percent.
“As the market shifts, we want to be shifting with it,” said Forbes. “There’s definitely been an increased demand for full-spectrum, higher THC craft cannabis. I happen to be the owner of Sitka, and so it makes it a very easy friendly deal to do with Adastra, so that we can have excellent, West Coast, legacy craft cannabis, which fits amazingly well into the legacy brand of Phyto Extractions. It’s kind of a no-brainer.”
The biomass acquired in the deal will be processed for Adastra’s premium line, Phyto Black and Gold. Forbes anticipates the products will be on store shelves within this quarter.
He notes that the products grown by Sitka already have a reputation at cannabis retailers across the country, and “sell out in minutes.” It recently began being sold at the Ontario Cannabis Store, a more challenging market to access, and already does well in BC, Alberta, and Saskatchewan, according to Forbes.
Increased Product Offerings on the Way
In addition to the deal with Sitka, Forbes said Adastra will be adding several new SKUs to its product offerings over the coming year, and said the team is focused on reaching $5 million in sales a month.
“We want to be the people’s choice of value cannabis and extracts, but we also want to hit that higher-end consumer as well,” he said.
The CEO called himself a “cheap and cheerful operator,” and said recently the company has been able to shave off $100,000 a month in expenses while increasing sales by 30 percent. Adastra recently had a record month, moving 70,000 units in total.
Issues in the Canadian Market
Forbes also commented on the state of cannabis regulations, which he doesn’t deny make it difficult to survive: “If you’re not being a low-cost producer or running an efficient team, you’re not going to make it,” he said.
As far as the market goes, the CEO recognized that investor sentiment is low while people “follow other shiny objects.”
To watch the full interview, check out the video above.