LEEF Brands Inc. (CSE: LEEF) (OTCQB: LEEEF) is one of California’s largest extraction companies and has long-term plans to become the world’s leading producer of cannabis extracts and concentrates. LEEF already supplies many of California’s leading brands and is in discussions to expand operations to other legal states in conjunction with some of those brands.
Multi-state expansion is just one of the catalytic events discussed on a recent podcast. The Higher Exchange podcast is hosted by Jesse Redmond, a former cannabis industry analyst and operator who has now taken a position with LEEF as Head of Investor Relations and Business Development. LEEF Brands is at an inflection point in its development, and Redmond is joining the team to help fuel growth while spreading the investment story far and wide to the capital markets.
The message – there are good businesses to be found in the cannabis sector, LEEF Brands is one of them, and 2025 promises to be a very eventful year full of growth and value creation for the company.
The podcast episode features LEEF CEO Micah Anderson as well as Morgan Paxhia, co-founder of the cannabis investment organization Poseidon Asset Management. The full podcast can be found at any of the following links:
Here we offer a review of the podcast, pointing out some relevant highlights that may be of interest to potential investors. The whole episode runs about 90 minutes and offers a wide range of insights from the industry experts on the state of the legal cannabis sector, the challenges presented by the public capital markets as they relate to cannabis, and the history of the industry’s development. It’s worth a listen.
LEEF-specific Highlights
The most immediate catalyst for LEEF Brands involves the beginning of its own cultivation operation. The company owns the Salisbury Canyon Ranch in Santa Barbara County, featuring 187 acres of plantable, licensable canopy. The first segment of 65 acres is going into production this year. Though exact figures for many companies are not available, Phase 1 would likely put LEEF in the top 5 or so largest outdoor cultivators in the world. This is discussed in the last few minutes of the show.
Starting at the 51:50 mark, Anderson talks about the factors that led the company to establish its own cultivation operation (efficiency, quality control, secure supply chain, and significantly lower cost). Additionally, LEEF looked outside of its home turf in Mendocino County to find that Santa Barbara County was licensing much larger operations than anywhere else in the state. The scale is important to meet both the current needs of the business as well as to facilitate high levels of growth.
The second major catalyst is the potential to expand business to other legal states in the U.S. Around the 1:01 mark Anderson discusses the roadmap to that expansion and the impacts it could have on LEEF’s growth curve. Though a national reclassification of cannabis and/or full legalization could make expansion across the country happen very quickly, LEEF is actively looking for opportunities and deal structures that would not rely on federal government action. At 1:10:40 Anderson goes into more detail on what that expansion might look like.
The third catalyst is the introduction of new extraction technology into LEEF’s production line. The company has been designing a piece of equipment that is hyper-efficient at harvesting and sorting cannabis plant material to feed its various types of production lines (live resin, solventless, etc.). The machine doubles the amount of material the production lines can handle and significantly increases yields, which the company believes will greatly impact the bottom line. Anderson covers the topic around the 1:06 mark.
The fourth catalyst for LEEF to create value for shareholders is the company’s recent move to add Bitcoin assets to the company’s treasury. A long-time skeptic of cryptocurrency, Anderson has come around to the concept that holding some alternative currency that tends to grow in value will be good for LEEF’s value over the long term. The topic is discussed starting around the 1:14 mark.
The Year Ahead
As it stands now, LEEF holds a dominant position in the world’s largest legal cannabis market, California. The company generates $30 million of revenue, is very near cash-flow positive after a few years of spending to improve and prepare the ranch property for cultivation, and trades with a market capitalization of about $24 million. The next year offers several avenues for growth, both in terms of volume/revenue and in terms of efficiency/the bottom line. LEEF Brands wants to become the world’s largest extraction company, and 2025 will be critical to the company’s chances to achieve that goal.
