Medical Marijuana Update: Cannagistics brings Calyx (V.CYX) in from the cold dead prairies

Well it turns out Calyx is on fire right now, and they’re actually seemingly delivering on their promise and will announce their first contract shortly, with a mid-range MMPR applicant out of BC commiting to partner up.

Roger Forde is a serial tech startup dude, a CEO who codes, a telecommunications mover/shaker who is running an ultra-tight team with minimal cash burn and a lot of experience. Their mission? Take every LP facility out there and get its various pieces of security, software and infrastructure to talk to one another, in a way that the LP can access easily and quickly, to help them stay in compliance and make Health Canada’s tasks a lot easier.

For example: Let’s say Your MMPR candidate has spent a million or so on high tech cameras and swipe card readers to ensure they know who is coming and going at the vault. But if said swipe card produces a long log file, held off-site by another company, how exactly is the site manager going to be able to see that Franky Four Fingers has been in the vault eight times today? And how hard will it be to access the camera feed at the times Franky was inside? And when Health Canada sends out an inspector to look at the records, are they going to be able to look through it all at a laptop, or will they be presented with reams of paper and have to sit in a back room for two days going through it all?

And let’s not even get into call centre set-up, which is something most LPs don’t even think about until the MMPR is granted. Cannigistics connects call centre software to home base, and much more.

Compliance is a big deal. One false move and your license is suspended and/or a crop heads for the incinerator (what’s up, Whistler). So a company that is seeking to standardize and organize background data to help companies keep it at their fingertips, and identify problems as they arise, is worthy of consideration.

What I like about the Cannigistics business model is, once a customer is using them to streamline systems and keep systems working together happily, how do you ever ditch them? And they’re looking to do deals that bring in revenue over the long term, in maintenance fees and upgrades, rather than up-front quarterly financials bait.

A few companies in the dot.bong world have opted to write all their own software, some several times. I know of one high profile LP that had written an entire system of their own but, when their developer left for another company, had to redo the entire thing using Ruby On Rails so their next developer could actually get the job done. What happens if that guy also moves on?

Cannigistics isn’t looking to replace platforms like Quantum 9, Biotrack, Sharepoint and Documentum – rather, it’s looking to provide the tools to make them better, to get the data in them out in the open and to make it easier for the left hand to know what the right hand is doing. A lot of LPs don’t know they need that kind of help yet. But an awful lot of companies will make the realization they do.. the hard way.

Let’s be clear: Calyx Bioventures was a gigantic bowl of whoopsy when it was focused on turning prairie crops into jet fuel. Mistake number one: Getting into business with Business Development Canada, which hasn’t met a good idea yet that it couldn’t beat into a bureaucratic mess like a horde of orcs handed the company bank accounts. Millions were raised and millions disintegrated. Lessons learned, say the CYX brass.

And credit where it’s due: When Calyx’s biofuel play started to unravel, they not only pivoted strongly into acquiring Cannigistics, they also stopped the bleeding by refusing to throw good money after bad, and today they still hold a 25% share of the biofuel venture, as well as significant IP coming from that play – and none of that is costing it anything.

If BDC and its new venture partner decide to go large on Agrisoma (the biofuel project), Calyx gets a free ride on whatever happens next. And if BDC abandons ship, big shrug – those losses are already baked into the share price, and then some.

But in Cannigistics, it has one really important asset, and that’s Forde.

I learned after my conversation with Forde that, in actual fact, he doesn’t need the money from Cannigistics, and is pushing his earnings into a local charity. He’s made plenty out of the communications sector and various companies he’s started and exited from and, for this one, it’s all about personal passion.

That he keeps that to himself, and had to squeezed out of other people, is noteworthy.

That he’s a virgin on the public markets is also worth noting, both in that it might cause issues going forward (Forde loves to talk about his project and has to be reined in on occasion when he gives up too much info), and in that it’s a breath of fresh air to talk to someone who just wants to build a great company and has no games to play and can talk about his area of expertise until he’s blue in the face.

Vancouver shell-forger to the stars Keir Reynolds was involved in the Cannigistics play early, and that’s who first talked to me about the project. Back then, it was all about “we’re going to do this” and “we think we can do that.” Keir is a great champion of the companies he’s involved with, but the early pitch lacked depth.

With Forde now at the wheel, it’s “when I go to see an LP and look at how they’re running their operations, I see new bottlenecks every time that I come back to the office and get to fixing, and the suite of tools gets better.”

Like a portrait painting, clearly Cannigistics will never get to the point where it’s actually finished. There’s always going to be something Forde thinks can be faster, more feature-loaded, more profitable for the end user.

The crappy thing about mining is, no matter how hard a guy works and how smart he is, you’re always at the mercy of luck to a certain extent. The great thing about software is, if you’re smart and enthused and driven, you can make it happen simply by banging out code and keeping a tight eye on the end product.

I can’t invest in Calyx because I’m exposed to insider info now. But I will say, talking to Forde made me want to do so. It’s a bargain at today’s 4c price (already a double from the 2c level back at Christmas time) and the markets will be slow to catch up for the next quarter or so. It’s a gimme.