‘Ultimately this is a game about branding’

Continued from FP1

“I can tell you that every bank that traffics in the space would have approached them,” the source added.

Despite the discounted price Newstrike had to offer to secure financing, the speed with which investment bankers were scrambling to get in on the action suggests that company can’t be counted out yet.

With only 2,500 kilograms of current production capacity, the company is a small player in a market increasingly dominated by a handful of massive producers. That said, Newstrike recently secured a coveted sales license, and it plans to have up to 28,000 kilograms of annual capacity online by next year, said Wilgar.

Most important, said the investment source, the company retains a strong recreational brand backed by the band the Tragically Hip.

“Molson Coors doesn’t tout the guy who grows their hops and barley. Ultimately this is a game about branding,” the source said, adding that imaginative marketing will be key in the Canadian recreational market where advertising is expected to be limited. “You can’t take out televisions ads, you can’t take out billboards, you can’t sponsor Formula One races. So how can you differentiate yourself? You creatively differentiate yourself.”

That’s the story Wilgar was pushing on Thursday. He plans to home in on Ontario’s recreational market over the coming year, capitalizing on whatever advertising opportunities the LCBO allows and inking more branding deals with celebrities through the company’s partnership with the Feldman Agency, which represents clients ranging from Bryan Adams to Carly Rae Jepsen.

“We are going to be very prevalent in the music industry and in the music scene. Think about festivals, and anywhere we can use our brand to the fullest advantage,” said Wilgar.

Longer term, Wilgar envisions moving the company away from production and toward value-added products. That could mean sourcing cannabis from other licensed producers, turning it into oil, and selling it at a branded premium, he said.

The morning after CanniMed and Aurora eloped, Wilgar wasn’t necessarily pleased. “We certainly didn’t invite Aurora to the party … (and) it wasn’t so much a divorce, as it was more kind of a forced split,” he said.

But, he added, “we always knew we had a great standalone story. I still think we do.”