Society Picks of The Week

Hero Technologies Inc.
(OTC: HENC)

Hero Technologies Inc. (OTC: HENC) is a cannabis company with a vertically integrated business model and plan that includes cannabis genetic engineering, farmland for medical and recreational cannabis cultivation, production licenses, distribution licenses, consumer packaging, retail operations and dispensaries that make the organization a multi-state operator (MSO).

The company was founded in 2004 and is headquartered in Dover, Delaware.

Portfolio

The company holds the majority stake in BlackBox Systems and Technologies LLC, an aeroponic cannabis cultivation firm focused on providing optimal conditions to enhance photosynthesis and cultivation. Hero Technologies is planning expansion in cultivation and dispensary operations in Colorado through wholly owned subsidiary Mile High Green LLC, while expansion in Massachusetts is planned through another wholly owned subsidiary, MassCannabis LLC.

Hero Technologies also owns and operates HighlyRelaxing.com under Highly Relaxing LLC and recently acquired the assets of V Brokers LLC, now operating as Veteran Hemp Co. at VeteranHempCo.com.

BlackBox Systems and Technologies LLC

BlackBox Systems and Technologies LLC markets a proprietary cannabis aeroponic cultivation system designed for the large-scale production of top-shelf cannabis products. BlackBox offers the optimal conditions to enhance photosynthesis and promote the cultivation of large flowering plants. The system’s dry room, process room and secure storage were designed for precise control through each phase of the cannabis lifecycle. Weekly harvests are achieved using 13 separate BlackBox systems in independent modules.

The system provides a series of key benefits, including:

• High-pressure nutrient delivery, with no nutrient or PH deficiencies
• Sterile, 100% nutrient solution
• Drain to Waste (no reuse of wastewater)
• Low water usage (1 gallon per plant per day)
• Constant PH and EC in reservoirs
• Modular design (1 to 100 pods in any configuration)
• Innovative proprietary engineering
• Minimal cleanup
• Media-less growing, suspended in the air, with no media waste
• No pesticides

Investment Considerations

• Rapidly positioning itself as a multi-state operator, Hero Technologies Inc. holds a portfolio of subsidiaries with strategic operations within the cannabis industry.
• The company currently has a multi-state vertical business model that includes cannabis genetic engineering, farmland for medical and recreational cannabis cultivation, production licenses, distribution licenses, consumer packaging, retail operations and dispensaries.
• Hero Technologies plans to expand on the proprietary, solar-powered aeroponic cannabis cultivation system of BlackBox Systems and Technologies, as it could help lower the industry’s carbon footprint.
• The company’s management team is comprised of financial industry veterans who have a combined history of mergers, acquisitions and overall company development.
• North America provides the largest revenue share in the cannabis industry, accounting for 91.1% of the global market in 2020; the continent also has the highest number of CBD businesses globally.
• Hero Technologies is currently expanding into the Colorado and Massachusetts cannabis markets via two wholly owned subsidiaries.

- Recent Coverage -

Hero Technologies (OTC: HENC), a cannabis company working toward a vertically integrated business model, has plans to expand into two states that have legalized cannabis — Colorado and Massachusetts. Cannabis genetic engineering, farmland for medical and recreational cannabis cultivation, production licenses, distribution licenses, consumer packaging, retail operations and dispensaries are all part of HENC’s strategic multistate model. The company owns a majority stake in BlackBox Systems and Technologies LLC. BlackBox is an aeroponic cannabis cultivation system that provides optimal growing conditions to enhance photosynthesis and cultivation of large flowering plants, creating increased harvest efficiencies. A recent article discussing the company’s growth plans reads, “HENC’s Colorado expansion will come through its wholly owned subsidiary Mile High Green LLC, while expansion in Massachusetts is planned through another wholly owned subsidiary, MassCannabis LLC.”

EverGen Infrastructure Corp.
(TSX.V: EVGN) (OTCQB: EVGIF)

EverGen Infrastructure Corp. (TSX.V: EVGN) (OTCQB: EVGIF) is developing Canada’s Renewable Natural Gas Infrastructure Platform, starting on the west coast in British Columbia. The company is combating climate change and helping communities contribute to a sustainable future by acquiring, developing, building, owning and operating a portfolio of renewable natural gas (RNG), waste-to-energy, and related infrastructure projects.

While EverGen is currently focused on British Columbia, its continued growth is expected across other regions of North America. RNG is produced differently than conventional natural gas, without drilling wells. RNG is derived from biogas, which is captured from decomposing organic waste in landfills, food waste, agricultural waste matter and wastewater from treatment facilities. This waste feedstock is supplied to an anaerobic digester which contains bacteria that breaks down organic matter in the absence of oxygen. The resulting biogas is captured and cleaned to create carbon neutral or carbon negative RNG to be used by the existing North American gas pipeline grid. By capturing these emissions and transforming them into RNG, then combusting into CO2, the overall greenhouse gases (GHG) impact is materially less potent than allowing natural decomposition to release methane into the atmosphere. Liquid and solid digestate matter is a byproduct of the RNG production process and is used as fertilizer and in other applications.

EverGen operates three projects in British Columbia. The company was incorporated in 2020 and went public in 2021, with its common shares listed on the TSX Venture Exchange under ticker symbol ‘EVGN’. In February 2022, EverGen’s common shares began trading on the OTCQB Venture Market in the U.S. under ticker symbol ‘EVGIF’. The company is headquartered in Vancouver.

Portfolio Projects

Fraser Valley Biogas is one of three projects in EverGen’s portfolio. Located in Abbotsford, British Columbia, the facility has been digesting manure and off-farm organics since 2011 and was the first agricultural digester in Canada to produce RNG. The RNG generated through this project is part of a FortisBC program to supply renewable gas to homes, businesses and other customers. Fraser Valley Biogas also provides Abbotsford farms with renewable fertilizer via the digestate produced. EverGen acquired Fraser Valley Biogas early in 2021 and is currently enhancing and expanding the facility. These optimization projects resulted in record production during the month of September 2021, supporting the growing demand for RNG in British Columbia. Optimization activities contributed an additional 18% of RNG production for September and a 9% higher year-to-date production compared to the previous year. The facility produces approximately 80,000 gigajoules of RNG, enough to heat more than 1,000 homes for a year.

Net Zero Waste Abbotsford, a wholly owned EverGen subsidiary and portfolio project, is an existing composting and organic processing facility and RNG expansion project. The British Columbia Utilities Commission recently approved a 20-year offtake agreement between the facility and FortisBC, an electricity and gas utility. Under this agreement, FortisBC will purchase up to 173,000 gigajoules of RNG annually for injection into its natural gas system upon completion of an anaerobic digester project at Net Zero Waste Abbotsford. Once construction is complete, this project is expected to produce enough energy to meet the needs of more than 1,900 homes.

Sea to Sky Soils, a wholly owned EverGen subsidiary and portfolio project, is an existing composting and organic processing facility and potential future RNG expansion project which has been operating near Pemberton, British Columbia, on Lil’wat Nation land since 2012. The Lil’wat Nation is a key partner and supporter of the facility, which has employed a majority of its staff from the First Nation since inception. The Sea to Sky Soils facility processed approximately 160 percent of its forecast tonnage in the second half of 2021. In total, Sea to Sky Soils processed approximately 36,000 tons of organic waste in 2021. The facility is working with the Ministry of Environment to expand its operational capacity in 2022. EverGen has partnered with local municipalities – including Metro Vancouver and the municipality of Pemberton – for the delivery of additional organic waste to the facility. The facility is an important part of EverGen’s RNG infrastructure platform and serves as a source of valuable feedstock to support the company’s existing and future operations.

Investment Considerations

• EverGen forecasts EBITDA growth from about C$3 million in 2021 to more than C$12 million in the next 12 months from expansion of core operating assets.
• EverGen stock began trading in the U.S. on the OTCQB Venture Market under ticker symbol ‘EVGIF’ on February 15, 2022.
• EverGen has low-risk long term contracted or reoccurring revenue (similar to Large Cap Independent Power Producers), with two revenue sources via RNG sales and organic waste tip-fee contracts providing a high margin business with EBITDA margins of 50-60%.
• In its most recent reporting, the company reported gross profit of C$1.58 million on revenue of C$1.95 million for the quarter ended September 30, 2021.

- Recent Coverage -

EverGen (TSX.V: EVGN) (OTCQB: EVGIF), a leading Canadian renewable energy company and Canada’s renewable natural gas (“RNG”) infrastructure platform, uses innovative systems to capture and process into RNG (energy) harmful greenhouse gases that would otherwise be emitted by organic waste. “Instead of letting methane from animal waste and other biomass sources go directly into the atmosphere, EverGen’s solutions capture the harmful gas and convert it to RNG for use in the natural gas grid. As a result, the negative impact on the environment is substantially reduced since the released greenhouse gases are materially less potent than methane. Using RNG means that the carbon already circulating in the environment is recycled instead of increased,” a recent article explains. With a business deeply rooted in its Environmental, Social and Governance (“ESG”) values, which enable it to contribute to a sustainable future while making a meaningful impact in the communities where it operates, EverGen currently runs a compelling portfolio of three projects. “Fraser Valley Biogas is an anaerobic digestion facility that utilizes local agriculture and commercial food processing waste to generate renewable natural gas and renewable fertilizer… Net Zero Waste Abbotsford Inc. works with communities toward a Zero Waste goal by using composting technology for a cleaner and greener environment… EverGen’s Sea to Sky Soils Project is an organic waste processing facility in Pemberton, B.C., handling organics to produce high-quality soil products such as stable compost.”