MMJ Group Holdings Limited (ASX:MMJ) presents an update on the company. Speakers are Mike Curtis, MMJ Non-Executive Director and Director of Embark Ventures Inc, the asset manager of MMJ; Mohan Nair, Partner, Embark Ventures Inc; Tim Drury, CEO of Southern Cannabis Holdings (MMJ holds 17%); and Jim Hallam, Chief Financial Officer and Company Secretary of MMJ.
Well, it's been an interesting time. I think we spoke about 30 or 45 days ago, and generally we had a positive view about how things were going. What we're continuing to see was the unwind of the early movers within the sector. So those that spend a lot of money on building out big medicinal operations and grows, etc, were continuing to unwind those operations and really what we've seen through this week. And a good example of one of those companies that was a first mover, but really through regulation and rapid expansion build their model, not necessarily how it should be, that company is Aurora. Right. And what we saw this week was we'd already seen them generally pulling back their Canadian operations. Now what they're doing is pulling back the international operations and unwinding those and writing them off as well.
So this is again, just stuff that we expected to see, and we're glad to see we're in the final innings. We're starting to hear a fair number of rumbles out there in terms of the M&A space. We think valuations have reached probably a pretty reasonable spot for people to start ticking in. I can say that within our portfolio, we've been approached numerous times of companies looking to bolt on or add on bigger companies. And I think that's a theme that's playing out there, especially for the big guys that are looking to backfill their evaluations and have a fair amount of cash they're in a really enviable spot. Our guess is that we're going to probably see over the next three to six months, these acquisitions start to take place and start to see the sector moving. What's really positive that we're seeing in Canada, the United States, and to a certain extent within Europe, is really what we've seen is plateauing sales within those early movers like Colorado, for example.
We saw them about 12 months ago. There really was a glut of cannabis in Colorado. It looks like it's all been cleared up now. And what we think that is, is really a full shift from the illicit market into a legal market. That's had the time to grow out both from a retail store network, as well as product network. And what we're seeing with the sales in Colorado now is both the price of cannabis is going much higher as is the sales. And we're starting to see that in Canada as well. And we're starting to get excited. If you look at a place like Ontario, they're green-lighting 10 new retail stores a week. Effectively, every store is going to have three to 500 of inventory.
So we're talking three to five million of just inventory going into these stores. So we expect to see over the next while here, these sales continue to take off and within the Canadian environment, what you're seeing is you're going to continue to see those sales taking off. On the international side, everybody seems to be a different sector. And it really does matter to make sure that you buy the acquisitions or take the acquisitions that are accretive. So you need to be careful as you expand, but the general global market looks exceptionally positive. Mohan.
I'll provide some highlights on some of our major holdings, including Weed Me, WeedMD, Harvest One and Embark Health, before I pass it over to Tim, to give you a deeper dive on Cannabis Access. So I'm just going to walk you through what's happening at some of these companies, what we see are some brief overview and outlook on the future of these, and that'll help give you some colour on the portfolio. So I'll start off with Weed Me, that's a $5 million position on our books. It's a privately held Toronto based indoor cultivator. Originally we invested in this in 2018. Now the company's monthly sales exceed about $750,000 a month and continuing to grow. In fact, I think next month, we're expecting it to be above $800,000. Last year, this time they were doing under a $100,000 a month.
So the growth that we're seeing in some of these portfolio companies is actually quite tremendous. And now at these levels, they're also cashflow positive. So there's no requirement for additional capital to be put into the company. In particular their Cindy Jack and Lemon Z brands are consistently selling out at the various provincial cannabis retail outlets. The company's biggest worry now is actually whether they'll run out of growing capacity, and if they'll need to find new growing capacity. Management has done an excellent job growing the business though it's been a challenging time for the industry to say the least. And we expect to see a go public transaction for these guys somewhere between the next nine to 18 months, probably sooner, rather than later, closer to the ninth and the 18th.
So this was a company that was struggling and needed a rescue financing from this last year. And we gave them about a $1m in a convertible debenture, and now they've repaid most of it back. The only reason we've allowed them to defer about $250,000 to that for another two months, is simply because they need to buy input material to continue to service the massive sales growth that they're seeing. So overall, very pleased with the direction of Weed Me and the direction that they're headed in. The next one, I'll talk about as well a similar name, but a different company WeedMD, that's about a $2.9 million, almost $3 million position on our books. Publicly listed company, Ontario based a large scale indoor and outdoor cultivator. We don't own the equity, but rather the convertible debentures. I don't know if you guys on the call follow to this detail, but if you recall, the company had merged with Starseed late last year, and new management came in with a focus to have a new distribution channel, primarily through to the LIUNA union membership.
LIUNA is a large labour union here in Canada, and it's also the largest shareholder of the company as well. The reason why originally we were interested in investing in this company and what continues to be one of their strong suites is the low cost per gram. It's one of the lowest in the industry, thanks to the massive outdoor grow program. The challenge for the company on the other hand has been defined markets for that large quantity of cannabis that they're able to produce at such a low cost. So while the cost per unit, so to speak with the cost per gram is very low. They still have overall cost to produce the quantity that they're producing and that's not offset by enough sales. So there's a large inventory position typically, and a monthly cash burn. And so in order to address that cash burn, what they've done is they've secured a $30 million loan from their largest shareholder, which is the LIUNA union.
And so that gives them new capital and enough runway over the next two years to address lowering some of those costs and ramping up medical sales through that new union channel, in addition to their traditional retail channels. So we're aware that this does play some additional pressure on the capital structure, but we feel comfortable in that we're well positioned on the cap table because we're on the convertible debentures and not on the equity. And finally, I'd say that in Q1 of this year or the first quarter of this year of 2020 calendar, they announced $12 million in quarterly sales. And Q2, COVID, it could be seasonally a bit weaker, but if they can come out of the first half with at least $20 million in top line sales, and if they can give us some guidance that the year will be somewhere in the vicinity of $30 million in annual sales, well, then that using our calculations takes them to cashflow positive.
And so that would be a very positive outcome, so we're on the lookup for that. Again, happy with where the company is going, happy with the fact that they secured some capital to give them enough of a runway over the next two years to solve some of the cost issues and to gain new sales and also very glad to see their major shareholder step up and support the company. Next, I'll talk about Harvest One, as a long-term holding for MMJ we've had it for many years, it's approximately a $4.6 million position. Publicly listed company again, it's in the process of transitioning from being an unsuccessful cannabis cultivator to becoming a consumer brand specialty company.
They're sort of temporarily solve some of their capital issues because of the sales from the proceeds of the Duncan facility, which was about $8 million. They're continuing to push through their strategic review and they're working on selling a couple of other assets, so they can really hone in on being a consumer brands company. Which is, we be their strong suit, which is the Dream Water product. They're very good at that. Maybe building out a large cannabis facility, maybe wasn't their strong suit. So we're glad to see that their strategic reviews continues to happen. We expect to see more sales out of that in terms of asset sales out of that. And we expect to see more success on the consumer brand side. And a side note here is that they've repaid our $2 million loan that we placed into them earlier in the year, we received that back in full amount with interest. And as a reminder, we received about a million dollars worth of warrants as compensation for extending that loan. So we're pretty pleased with the return that we actually got on that piece of paper for our shareholders. So overall, pretty happy then.
Finally, I'll talk about Embark Health. Embark Health is our largest holding. It's about a $12.7 million position privately held extraction company. That's currently ramping up its production with plans to go public in the near to medium term. Originally we invested in this company in late 2018, and they spent the last two years securing a processing license from Health Canada, and building out two facilities, one in Delta, BC, and the other one in Woodstock, Ontario. So at Delta, they're actually now up and running with a water extraction process, and they're starting a CO2 extraction process within several weeks. One of the highlights for this company is actually, they've got a reputation in the market as being provider of organic cannabis extracts because the water extraction process, is obviously the cleanest process as compared to the other modalities.
And they're also making pretty good progress of the Woodstock facility in Ontario, where the frame and the foundation has now been laid for that facility. So we're going to give them another six to nine months to finish that out and put equipment in there. And at that point they will become one of the largest extraction companies in Canada. But getting back to Delta, they have actually had several sales to several different customers, test sales and some large orders. And the feedback so far has been very positive. We expect to see some fairly large purchase orders coming through in the next several weeks in the company or press release those.
We're now being told that they could be cashflow positive as early as November. So obviously we are very happy about that and we expect the company to continue its path, to seek a listing to late 2020, or early 2021. And so those are the highlights and what we see in some of our major holdings. And now I'd like to pass it on to Tim from Cannabis Access, which has been a very stable and very successful investment for him. And he's going to give you a deeper dive on his company. Tim.
Cannabis Access is one of the brands that we operate. The broader group that I'm going to talk about is Southern Cannabis Holdings and MMJ is a 17% shareholder in Southern Cannabis Holdings.
If I can just move to the next slide please, one more please.
So at Southern Cannabis Holdings, we focused on building out businesses in different parts of the value chain, where we see opportunity. And as a result, we've now been able to build out four businesses that I'll talk about, and they're all contributing now revenue to the overall group. So we've got a nice diversified revenue base at the moment. All of the businesses are leaders in the sectors in which they operate and we've been able to deliver now since founding the business just over two years ago, we've now been able to deliver eight straight quarters of revenue growth. In fact, as of tomorrow, that should be nine quarters of revenue growth.
Profitability has always been a really important thing for Southern Cannabis Holdings. And we were able to achieve breakeven from a cashflow perspective back in July of last year. And we've maintained profitability since then and have been reinvesting some of that profit and building out new brands and new parts of the business. We're headquartered here in Sydney, and we're most focused on the Australian market, but we do look at other markets around the world that have a similar regulatory framework to Australia. And to that end, we have opened up in the UK. We have a team on the ground in London as well now.
Go to the slide please.
So I talked about the businesses that comprise Southern Cannabis Holdings, and these are the four main businesses here. The first one is CA Clinics, which was originally branded as Cannabis Access Clinics, but we have updated that brand to comply with new regulations that the TGA has released around marketing in the medicinal cannabis space in Australia. So CA Clinics it was our first business. It's a business that generates revenue from doctors seeing patients, and assessing them for suitability of medicinal cannabis treatments. CA Clinics comprises about half of the revenue of the broader group. We operate seven clinics around Australia, although right now in the COVID environment, all of our patient consults are done via telehealth via video. And we have more than dozen doctors working for us. Most of them are specialists in different areas where medicinal cannabis is a suitable treatment. So pain specialists, addiction medicine specialists, psychiatry, and others.
The second business we started was Applied Cannabis Research and Applied Cannabis Researcher is a contract research organisation. So it generates revenue from mostly cannabis companies, engaging us to execute research for them. We believe that we're the only contract research organisation in Australia that specialises solely in the medicinal cannabis space. And the business generates about a quarter of our revenue at the moment. We've built out a leading real-world evidence data platform, so that's an IT platform that allows us to collect data from doctors and from patients. And we use that in the ethics approved studies that we operate, and we have two big ethics approved studies and about a dozen sub studies that sit under those. And those are studies looking at the effects of cannabis, into things like anxiety, PTSD, fibromyalgia, epilepsy, and a list of other indications.
The third business that we launched was FreshLeaf Analytics. And FreshLeaf Analytics is our market intelligence and consulting business. We launched FreshLeaf because we found ourselves in the position of having access to millions of data points about what's going on in Australia, patient data, products data, data from the regulators, data from distribution channels like pharmacies. So we pulled that all together and built out a consulting practice. And now I would say more than 30 clients in Australia, work with FreshLeaf Analytics to do various kinds of strategic consulting.
These are mostly clients who are cannabis companies and in some cases, government clients as well, in addition to generating revenue from commercial consulting work and strategic consulting, we also publish the FreshLeaf market report. The FreshLeaf market report has come out every six months for the last two years or so. We just released the fifth one, two weeks ago. And that's a free industry report that has become the go-to source of data about the Australian market.
The fourth business we've launched is Precision Farmer, and this is our business that focuses on services in the products and logistics are part of the value chain. So looking at supporting companies with importing their products, warehousing them and distributed them around Australia. And we also do some pharmacy consulting work there as well. So those are the four main businesses that comprise Southern Cannabis Holdings.
I can just go forward one slide please.
I'll pause talking about the business there. And I do just want to touch on the market, obviously with FreshLeaf analytics, as one of our portfolio companies, we do have a lot of insight and data about what's going on in the Australian market. So I'll just wrap up my short presentation with some data points around that. And this information comes from the Q3 2020 FreshLeaf report, which was released about two weeks ago. If anyone wants to dive deeper, you can download it from the FreshLeaf Analytics website. Some highlights it's encouraging to see that the market continues to grow rapidly. Last year, FreshLeaf estimated that the market size was about $30 million in Australia, and that is the sales that come from patients buying legal medicinal cannabis products in Australia. This year, we've tripled to almost a $100 million and next year we're expecting the market to grow to above $150 million of revenue.
So getting to the size where some of the leading players are generating meaningful revenue numbers in the tens of millions of dollars, annualised as we move into the next year. So a major milestone for the Australian industry there. If we look at the top right, that's the number of products in the market. And this is somewhat of a problem, there are now 150 products in the Australian market. And a lot of them are not highly differentiated. Doctors don't in fact need to choose from a pool of 150 products. Quite a substantially lower number is more than enough for them. So we do expect that as we move through the remainder of this year and into 2021, we do expect that there'll be some consolidation of products. We think that some of the companies will reduce the number of skews they have in the market.
We think there'll be some M&A activity that reduces that overall volume, that large number of products has also generated a lot of down pressure on pricing. And since the market started around three years ago, the price of medicinal cannabis on a wholesale basis has dropped to about a quarter of where it was. And I suppose that's good news for patients. It also means that pricing is now on par with illegal products in the Australian market, which we think will lead to a lot more patients moving over from illegal channels. But it obviously does put pressure on some of the product companies to ensure that they are able to be profitable at those price points. I suppose what helps them on the upside is that if we look at the bottom two charts there, as the price has fallen, we have seen dosage increase.
And the average dose now in Q3 2020, is around 92 milligrams per patient per day. And that may not mean a lot, but put that in context, it's more than double where the market was from a dose perspective in 2017. So as prices have fallen, patients are consuming more medicine and that helps drive up the revenues and also helps patients achieve therapeutic dose levels to some of these products that they're taking. And as a result, monthly patient spend hasn't changed much. So from a patient acquisition and revenue perspective, that has been fairly static for those companies. Those are just some highlights from the report. There's a lot more data in there, as I said, if anyone wants to dive deeper, please feel free to get in touch with us or download the report.
And if I could just move forward to the final slide, I'm just going to touch on some trends that we see as we move into the market next year.
As I've mentioned, we do see the market continuing to grow rapidly. And in fact, by the end of next year, we think that the patient numbers will have tripled compared to where they are this year. So very rapid patient growth happening in Australia right now. We are seeing the emergence of more registered medicines. So these are medicines that are approved by the TGA and much easier to prescribe and access for patients and also are potentially able to be subsidised by the government. The most recent one to become registered was Epidiolex from GW Pharma, that was registered in Australia about two weeks ago, medicine for treating certain types of epilepsy. But we are aware of a large number of other companies who are moving towards registering their products, which is good news for patient access and also for pricing.
The third point is a major one as well, CBD in Australia is going to become an over the counter medicine. So currently CBD is a schedule for medicine. That means you require a doctor's prescription. The TGA has announced their intent to reduce this down to a schedule three. And we believe that as of November 25th, that decision will be formalised. And from next year, we expect to see some CBD products in low dose become available over the counter in pharmacies, without a doctor's prescription. Product companies are working on achieving this registration, they do need to demonstrate that their products are efficacious, that they actually show some kind of a benefit, which is not straightforward for CBD in low dosage. But if they're successful, that will be a major milestone to the market, and again, a broadening up of access and a broadening up the number of patients who are consuming these medicines and contributing to the industry from a revenue perspective.
The final point to close with is a major milestone, that's in New Zealand, adjacent to us here in Australia, and that is New Zealand looking at going recreational. They have a referendum in October, and if that referendum passes in majority, the incumbent government has announced their intention to codify that result in laws, in New Zealand to make cannabis available recreationally. It's hard to forecast how the referendum is going to go. I think the polls are showing that it's about 50-50, but if that does go ahead, another major milestone for the region and potentially something that will have somewhat of a halo effect on Australia and potentially start changing the dialogue about Australia, moving in that direction at some point in the future as well.
So we're very excited about the opportunities that lie ahead for the industry here in Australia, and certainly very excited for the opportunities that we see for Southern Cannabis Holdings and the businesses in our portfolio. I'll wrap it up there. Thanks very much, everybody.
During the month of September, MMJ released its audited financial results, they're available on our website. Since that report came out, our NTA is moved in line with our listed investments, our unlisted investments have maintained their 30 June ‘20 valuations. Subsequent to 30 June, we sold a couple of small investments at the 30 June ‘20 book value. MMJ has approximately $4 million worth of cash on its books, which it's looking to redeploy in new investments. Subsequent to 30 June, we had also received included in that $4 million plus the repayment of some loans that we'd made to investees. To our shareholders, please be aware that we released a monthly net asset value, which is included in our portfolio overview, and we'll be releasing the 30 September NTA portfolio review in the next couple of weeks. Thanks very much.