CANNAINVESTOR Magazine December / January 2016 - Page 33

33

• Bottleneck in Cannabis Lab Testing: Oregon implemented more stringent requirements regarding the testing of raw cannabis and cannabis products to better ensure public health and safety. Currently, there exists only a small number of state-accredited cannabis testing labs in OR. Until more labs come online, operators in OR will continue to face lengthened turnaround times for testing cannabis products and subsequently a reduced supply of compliant products.

The challenges faced in Oregon are similar to those that the states of Colorado and Washington confronted when recreational cannabis use was legalized in their respective marketplaces. To succeed in creating a sustainable business in Oregon’s evolving cannabis industry, GLH has learned that access to capital and an experienced management team and board of directors is critical. This combination provides the company with the flexibility and expertise to pivot when necessary and overcome unforeseen regulatory and market obstacles.

Value-Added Manufacturing Model

GLH employs a value-added manufacturing business model with a focus on its core competencies in extraction, refining, research and development, marketing, and selling of cannabis oil and edibles. This is analogous to the difference between a farmer growing tomatoes in the produce industry versus a branded company leveraging expertise to manufacture ketchup. By leveraging a model where the Company purchases and secures trim through supply contracts, GLH is able to create a differentiated brand portfolio with superior consumer value, enabled by its core strengths.