Canadian cannabis stocks continue to be one of the most attractive places to invest and pullbacks like the one we saw yesterday create great opportunities for new investors.
While the weakness was significant, it was necessary and Technical420 Premium Members capitalized on this. The recent rally has been incredible and pullbacks like yesterday serve to make the rally sustainable.
Companies continue to execute and today, we have highlighted 7 company developments that we find to be significant and worth noting.
Yesterday, Canopy Growth (WEED.TO) (TWMJF) continued to expand the products offered through its CraftGrow line after the company secured a distribution agreement with Delta 9 Cannabis Inc. (NINE.V), an existing licensed producer under the ACMPR. Delta 9 will offer their cannabis products through the Tweed Main Street’s online store and will gain direct access to Canopy Growth’s extensive operational, distribution, marketing and sales infrastructure.
Canopy Growth has been executing on all cylinders and earlier this week the licensed marijuana producer expanded its focus on the hemp side of the business after it acquired certain assets and intellectual properties of Green Hemp Industries. We continue to remain bullish on Canopy Growth and view the company as one of the top long-term cannabis investment opportunities.
Emerald Health (EMH.V) (EMHTF) has been one of the top performing cannabis stocks and yesterday, the company announced that its licensed producer application for its Richmond, BC greenhouse facility met the requirements of the paper-based review of Health Canada’s Office of Medical Cannabis (OMC). Emerald aims to harvest from 75,000 square feet of cultivation space by the third quarter of 2018 and plans to have over 500,000 square feet of cultivation space built at this site by the end of next year.
Emerald is laser focused on increasing production capacity ahead of Canada’s recreational market opening in the summer of 2018. The company expects cannabis supply from the first 250,000 square foot phase of its Pure Sunfarms 50/50 partnership prior to legalization. Completion of the conversion of Sunfarms’ second phase of 250,000 square feet in its 1.1 million square foot greenhouse is targeted for the third quarter of 2018.
Organigram Holdings (OGI.V) (OGRMF) traded lower after the marijuana producer entered a letter of engagement with Eight Capital. Under the agreement, Eight Capital and a syndicate of underwriters will purchase 14,285,715 units at $3.50 each on a bought deal basis for gross proceeds of $50,000,003.
The licensed marijuana producer plans to use the net proceeds to fund its expansion program to construct one of the largest indoor cannabis production facilities in Canada. The expansion plans are expected to add up to 40,000kg/year of incremental capacity which would bring total production capacity to approximately 65,000kg/year. In addition to its expansion program, the company intends to use a portion of the net proceeds for working capital, general corporate purposes and to actively pursue strategic investments through international opportunities.
Yesterday, CannaRoyalty (CRZ.CN) (CNNRF) executed a binding term sheet to acquire Kaya Management, which is the exclusive manufacturer and license holder of rights for Bhang brand vaporizer products in California.
CannaRoyalty also signed a binding term sheet to acquire Alta Supply Inc., a distributor of Bhang vaporizer and Bhang chocolate products, as well as products for over a dozen other well-known third-party cannabis companies throughout California. The company will acquire the two businesses for cash and stock and we will keep an eye on how this benefits the business during 2018.
Innovative Industrial Properties (IIPR) expanded its reach and executed an agreement to purchase a property in Arizona comprising over 350,000 square feet of greenhouse and industrial space in a sale-leaseback transaction with a subsidiary of The Pharm, LLC. The cost associated with the property acquisition is $15 million and the company will cover up to $3 million worth of expenses.
Innovative Industrial received a mixed response from the market and the shares traded lower on this news. We are favorable on this development and will keep an eye on how IIPR continues to trade from here. The shares have come well off its recent lows but have pulled back slightly. This is a company to watch.
Canabo Medical Inc. (CMM.V) put their money where their mouth is after announcing that the TSX Venture Exchange accepted Canabo’s bid to purchase up to 2,720,000 common shares (approx. 10% of the total current public float). These purchases will be made at the discretion of Canabo at prevailing market prices, for a 12-month period. Canabo intends to hold all shares acquired under the bid for cancellation. The funding for any purchase pursuant to the Bid will be financed out of the companies’ unallocated working capital.
The Board believes the underlying value of the company may not be reflected in the current market price of its common shares. With a cash flow positive outlook and the fact that the market may be undervaluing Canabo, the Board has determined that the bid is in the best interests of the company and its shareholders.
This move will prove to be very smart if the company can execute on its business plan. We believe there is something that the market is not seeing in Canabo and are bullish on this development. Canabo shares traded significantly higher off this news and this is a stock investors need to watch.
Earlier this week, the market responded favorably to a hardware supply agreement between Aurora Cannabis’ (ACB.TO) (ACBFF) subsidiary, BC Northern Lights, and Namaste Technologies (N.CN) (NXTTF). Under this agreement, Namaste will be the first third-party distributor to sell BC’s home cultivation systems and accessories through its online platform.
credit:420intel.com
