Canadian cannabis stocks have been a bright spot of the marijuana stock market so far this week and we are monitoring how the sector continues to trade.
This rally has been primarily driven by company developments and we have highlighted 5 announcements that are significant and that investors needs to be aware of.
Micron Waste Surges Higher on Aurora’s Planned Investment
When Aurora Cannabis (ACB.TO) (ACBFF) makes an investment, the market tends to respond favorably. We have seen this scenario play out with Radient Technologies (RTI.V) (RDDTF) and Hempco Food and Fiber (HEMP.V) (HMPPF).
Now, Micron Waste Technologies (MWM.CN) (MICWF) is benefiting from this trend and we are monitoring how the shares continue to trade. This comes after Aurora signed a non-binding term sheet to make a strategic investment in Micron Waste, a developer of proprietary digester solutions for the treatment of organic waste.
Under the agreement, the companies will collaborate on the optimization of Micron’s technology for the treatment of organic waste generated in the cultivation and production of cannabis products. Micron will install its technology at one of Aurora’s cultivation facilities, where the companies will work on optimizing the digester technology to deliver a commercially-ready design specifically for the cannabis industry.
If the test project is successful, Aurora can sign a definitive supply agreement for the purchase of Micron’s organic waste digestion solution for each of its cultivation facilities. Aurora also has the option to purchase approx. 9% of Micron for $2 million and has the right to participate in future offerings and maintain its ownership level.
Yesterday, Micron Waste rallied more than 45% on strong volume and we are favorable on this move higher. The shares are trading at very overbought levels after this move higher and investors need to keep an eye on this cannabis stock.
Canopy Growth Trades Higher on Denmark License
Canopy Growth (WEED.TO) (TWMJF) has been trading higher this week and this comes after the marijuana producer announced that Spectrum Cannabis Denmark was issued a cannabis production license by Denmark’s Medicines Agency.
The license is valid through 2021 and was issued without conditions, meaning that Spectrum Cannabis Denmark will not be limited to a production cap or limited to the product formats it can produce. Cannabis oils and flowers will be produced and sold under the Spectrum Cannabis brand using the proprietary Spectrum color-coded strain classification system.
Spectrum Cannabis Denmark is a partnership between Danish Cannabis, one of Europe’s largest hemp producers, and Canopy Growth, which has an industry-leading selection of cannabis genetics in its Canadian facilities. The Canadian marijuana producer will ship a variety of Spectrum Cannabis clones to begin growth cycles as soon as spring 2018 when the greenhouse retrofit is expected to be completed.
This was a significant announcement and makes Denmark the second European country (other is the Netherlands) with federally permitted medical cannabis production. Canopy Growth expects to export some of the product produced at the Denmark facility to other federally legal jurisdictions in the European Union.
Organigram Significantly Strengthens its Balance Sheet
Yesterday Organigram Holdings Inc. (OGI.V) (OGRMF) rallied off its lows and this comes after the marijuana producer reported several important developments. From a new CFO to a $57.5 million financing, this has been a busy week for Organigram. During this time, the company also released its fourth quarter financial results and entered a letter of intent with Farm Credit Canada for a $10 million loan.
Organigram appointed Paolo De Luca, CPA, CA, CFA as the company’s CFO and he will lead both the finance team as well as the investor relations efforts and will manage the finance team. De Luca has more than 20 years of diversified financial business experience and has held senior leadership roles at several well-known firms.
The market responded favorably to these developments and PI Financial raised its price target on OGI.V to $4.75 from $4.50. We remain bullish on Organigram and view them as an attractive long-term investment opportunity.
CanniMed and Aurora Hearing Scheduled for Today
Today, the Ontario Securities Commission (OSC) will hold a hearing to consider the application filed by Cannimed Therapeutics (CMED.TO) (CMMDF) to intervene in Aurora Cannabis’ (ACB.TO) (ACBFF) attempted acquisition.
If this acquisition is rejected, we expect to see shares of CanniMed move significantly lower and this potential pullback will create a great opportunity for new investors. We expect to see the acquisition completed and would be surprised if the OSC rules in CanniMed’s favor.
We would be bullish on the combined company and see tremendous opportunity for synergies. Both companies are laser focused on two of the most significant trends in the cannabis industry, international markets and cannabis oils. One of the reasons why we are favorable on the potential of the combined company is due to the support that Aurora would provide CanniMed.
The market will be closely watching the outcome of this hearing and we recommend keeping an eye on these two companies today.
Supreme Pharmaceuticals Announces a Name Change
Supreme Pharmaceuticals Inc. (FIRE.V) (SPRWF) has been under pressure during the last week and this comes after the company signed a deal with Namaste Technologies (N.CN) (NXTTF) and after the company changed its name to The Supreme Cannabis Company, Inc.
credit:420intel.com
