Features

Nextleaf’s focus remains on Canada, and not the US

Published on February 7, 2025 by David Wylie

Photo: Contributed

Exporting to the world and watching the American market are important, but Canada still comes first, says the CEO of a BC-based cannabis company.

Nextleaf Solutions’ Emma Andrews spoke during a webinar on Jan 22, attended by investors, media and fans of the company. Andrews, speaking from her home in Victoria, described the event as a fireside chat

“We’re hyper-focused on our Canadian operations,” she said. “but with mind’s sight to what is the next expansion tranche.”

With a 6,500-square-foot plant in Coquitlam, B.C., Nextleaf excels in non-smoking and ready-to-consume cannabis products. Glacial Gold is its flagship brand.

“The product pipeline focuses on smokeless ingestible extracts such as softgels and oils, ready-to-consume convenience formats like All-in-One liquid diamond vapes, infused prerolls, and minor cannabinoid formulations,” a recent company news release said.

While moderator Shadd Dales of The Dales Report said exporting is going to be a priority for many Canadian companies in 2025, Andrews said the domestic market is her focus.

“It is a hyper-competitive market in Canada, in which exporting is going to be front and centre for a lot of companies in Canada,” Dales said.

The medical marijuana market in Germany offers opportunities for Canadian companies and while legalization is now doubtful in the United States, the new Trump administration may support medical cannabis and research, Dales said.

Andrews said her company will be looking into international opportunities—cautiously.

Australia and Germany have the most promising and compatible medical marijuana markets.

“The Australian medical system, as in Germany too, really prioritizes non-combustible forms of cannabis … That’s what we focus on,” Andrews said.

But still, it’s Canada first.

“In 2025 it’s still domestic,” said Andrews, “a hundred per cent. There is ample opportunity for us to capitalize on the softgel category growth that we’ve been experiencing, and continue to maintain that dominance.”

Look for innovations, new product formats and more market penetration in that area.

“Some lower potency offerings, like a 5 mg softgel vs. a 10 mg softgel, for example.”

Andrews mentioned softgel capsules several times as a company strength.

“That format really taking off to me proves that consumers are looking for non-combustible formats, that are highly normalized, non-stigmatized, easy to integrate into your day-to-day regime.”

Integrating cannabis into people’s existing lifestyle as supplements or part of a wellness regime, is “definitely a trend we’re seeing.”

A variety of Glacial Gold products are shown.

Convenient, ready-to-consume formats are also gaining in popularity — “the all-in-one-vapes as an example.”

The market changes fast, however.

“Things move so fast that you’re constantly reassessing every three months what the competitive landscape is doing, how consumers are shifting their preferences, what type of innovation is available to you, what your cash flow is…”

Nextleaf is not “big corporate weed,” but not a craft producer either.

“We’re in this scrappy middle ground. where there’s a bit more authenticity to our portfolio and our approach,” she said.

The company is debt-free, she said, but also has small margins. So expansion might need investments or partnerships.

The entire industry is hoping for regulatory reforms and excise tax reductions, but Andrews is keeping her expectations modest.

With an election coming up and the possibility of a new federal government, she estimates tax relief and other reforms could be 3-5 years away, to the surprise of her moderator.

“For me, it’s just a healthy dose of patience” that’s needed, she said.

But now is a good time to push politicians for tax reform/relief with campaigns coming.

“We’ve got to be a loud voice together.”

The illicit market is still a challenge for legal operators.

“Can you imagine a black-market liquor store that’s on the corner right now in Canada and what they would do and how they would basically shut that down,” Dales said.

“You have to give more economic advantage to the legal side of the industry in order to outcompete against the illicit side,” Andrews answered.

Nextleaf revenues increase

Meanwhile, revenues were up substantially last year for B.C.-based Nextleaf Solutions.

“The company achieved a gross revenue of $16,567,537 during the 12 months ended Sept 30, 2024, representing a 66% increase compared to FY23 (FY = fiscal year),” the company said in a news release on Jan. 29.

“The company’s net revenue of $12,478,039 reflects a 53% increase compared to FY23.

“Performance for fiscal 2024 is driven by expanded market presence and increased distribution channels through Alberta and other core provinces,” the news release said.

Nextleaf reported 44 new listings in B.C., Alberta and Ontario.

Nextleaf says its Glacial Gold is “consistently” the No. 1 softgel brand in B.C. and took top spot for sales in Alberta in the last months of 2024. It’s No. 4 in Ontario.

The company claimed a gross profit of $3.7 million for the fiscal year and the all-important adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was positive at $675,613.