Aqualitas, the Liverpool cannabis producer, is set to close a $6.5-million funding round with private investors next month, with the hopes of getting to market next year.
The close of this funding round will bring the total equity capital raised by CEO Myrna Gillis to about $11.5 million — an audacious number for a three-year-old Nova Scotia startup. But the interesting part of the story — at least for a column about startups — is what she has done to differentiate Aqualitas from the 73 other cannabis producers in Canada.
“We’ve got a great project and people who are familiar with the industry know we have something very special in this team,” said Gillis in an interview on Tuesday.
An interesting aspect of Aqualitas is its research and development subsidiary Finleaf Technology, which is receiving $2.5 million of the money raised by the parent company. It is developing proprietary technology for use in the cannabis industry that Gillis says could be exported to other producers. Finleaf was in the local tech news recently as it was accepted into Innovacorp’s Cleantech Accelerator Program, which could bring the company as much as $50,000 in financing, and was a $25,000 winner of the Spark West competition.
The R&D unit is solving a common problem in aquaponics (a branch of aquaculture in which the effluent from farmed fish provides nutrients for hydroponically grown plants, then clean water is returned to the fish tank). Growing flowery plants and fruits in aquaponics is a challenge because it’s difficult to make sure the plants get enough potassium and phosphorus to nourish them, and to make sure these chemicals don’t return to the fish tank and harm the fish.
Working in a fully staffed lab at Acadia University, Finleaf has devised a delivery system that can solve this problem, ensuring plants get enough nutrients and the fish are protected from toxic chemicals. As it preserves water and avoids harmful runoffs, aquaponics is a growing industry, especially in parts of the world where fresh water is becoming scarce.
Aqualitis is now waiting for Health Canada approval for its growing facility for medical cannabis in the former Bowater land outside Liverpool. Assuming it receives regulatory approval soon, it hopes to produce a sample stock in the first quarter of 2018 and be in production next summer.
The excitement about the company is shown in the amount of money it has raised, and also the success it’s had in international competitions. Aqualitis applied to pitch to Arcview Group, an umbrella organization for investors in the cannabis industry that gets 1,500 to 2,000 applications from entrepreneurs each year. Aqualitis made it through several rounds of the Arcview competition, and last summer placed second at the group’s finals in Las Vegas.
Cannabis is, of course, a hot sector, but Gillis looks forward to diversifying the company’s crop and using its technology to address food security. Aqualitas, whose board and C-level executives are mostly women, wants to develop more facilities in the provinces so that more food can be grown indoors with minimal environmental impact.
Said Gillis: “Food security is not just lettuce and fish, so we’re going to have a variety of crops.”