Focusing on California and the licensed U.S. medical cannabis industry
As of December 2018, the U.S federal government has legalized medicinal cannabis in 33 states and Washington DC. Increasing development of therapies derived from cannabis and its components is expected to boost the medical cannabis market growth. Medical cannabis is being studied to treat various medical conditions including cancer, multiple sclerosis, post-traumatic stress disorder, and anxiety. The U.S. FDA now offers an active program assisting drug developers to investigate cannabis or its components through properly controlled clinical trials.
FinCanna Capital Corp. (CSE: CALI | OTCQB: FNNZF) is a royalty company for the licensed medical cannabis sector. FinCanna’s vision is to be the capital partner of choice for rapidly emerging companies focused on the licensed U.S. medical cannabis industry. FinCanna aims to achieve this by combining extensive investment expertise and industry experience, in providing growth capital to rapidly emerging private companies operating in the licensed U.S. medical cannabis industry.
FinCanna’s strategy and advantages
- Focused on the licensed U.S. medical cannabis industry (with an emphasis on California).
- Royalty model which is very attractive for operators and FinCanna.
- Diversified investment portfolio over multiple sectors.
- Invest in private companies not available to individual investors.
- Early entrant in the U.S. with extensive network for new projects.
In January of 2019 FinCanna signed a Royalty Agreement with QVI Inc. (“Quality, Value, Integrity”). QVI is a cannabis infused product manufacturer located in Sonoma County, California. QVI is currently refitting its 8,300 square foot facility, with dedicated spaces for a large-scale commercial kitchen for baked goods, chocolate products and a hard candy and gummy line. QVI’s immediate goal is to become the premier contract manufacturer in California.
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Andriyko Herchak, CEO stated: “We are very pleased to complete our royalty agreement with QVI and their exceptional team. This is also a great fit for our portfolio as it provides additional diversification, and with QVI’s potential for rapid scalability, will have a strong impact to our bottom line moving forward.”
On March 6, 2019 FinCanna announced that it has received US$3.9 million as partial repayment of an outstanding secured loan from Cultivation Technologies Inc. (CTI).
Andriyko Herchak, President and CEO of FinCanna Capital stated: “We are very pleased to receive this non-diluted cash injection, and our $8.5 million treasury puts FinCanna in an excellent position to complete further investments to give our shareholders access and leverage to the burgeoning licensed cannabis market in the United States.”
On March 12, 2019 FinCanna presented at the second annual LD Micro Virtual Conference, where CEO Andriyko Herchak told investors (via audio): “We are focused on the US which is the largest single cannabis market in the world and we have a strong emphasis on California. We invest in private companies that you as investors do not have access to, and we find these companies at an early stage with a favorable valuation.”
FinCanna’s royalty pipeline
California pioneered the modern cannabis policy reform movement in 1996 when voters passed Proposition 215, the Compassionate Care Act., and has 10% more medicinal cannabis dispensaries than the rest of the US combined. With around 40 million residents and more than a million medical marijuana patients, predicted sales numbers for both could reach $5.1 billion by the end of 2019.
Many signs point to the US following Canada’s lead in making all forms of cannabis legal. As California continues to drive the rapidly growing cannabis market, FinCanna’s outlook looks positive as the capital partner of choice. Given the current low stock valuation and the growth potential the stock looks to be very oversold.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>