EDITOR: | September 20th, 2018 | 2 Comments

Move over Fantasy Football, the Cannabis Market just got very real.

| September 20, 2018 | 2 Comments
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Forget the Fall sport season because if you haven’t been watching the Cannabis Breakfast Club, we have some awe-inspiring numbers that may get you on-side and looking at stock charts with your morning coffee. Yesterday, we published To be a Billionaire or not? The Canadian Cannabis Breakfast Club struggles with U.S. border entry concerns where we address the significant challenges arising from border crossing concerns for Canadian executives and investors alike entering the U.S.

Speaking of entry am I the only suffering from the colossal cannabis market envy and interested in whether there is room to still enjoy what appears to be a bud bull market?

While Terry Booth of Aurora Cannabis Inc. (TSX: ACB | OTCQB: ACBFF) had been a client in 2015, I recall attending meetings for financings and listening as bankers would explain why they were not interested in cannabis…. this column is dedicated to all of us that could have, should have but maybe didn’t… and more importantly is it too late?

Wince forward.

If we had bought $100k in Aurora Cannabis stock on January 2, 2015 at $0.40, as of market close last night at $10.87, our stock would be worth $2,717,500.

Taking one more step backwards into the past, imagine that we had invested this same fantasy $100k in the 4 leaders in the Canadian Cannabis Breakfast Club in 2015…. what may we have been worth this morning?

Let’s break it down.

Hypothetically, we would have bought 12,195 shares of Canopy Growth Corporation (TSX: WEED) at $2.05, which closed at $63.40 today, market cap $14.5B – and acquired 62,500 shares of Aurora Cannabis Inc. (TSX: ACB) at $0.40, they closed at $10.87 today, market cap $10.35B. Then perhaps we would have selected 23,810 shares of Aphria Inc. (TSX: APH) at $1.05, they closed at $19.28 today, market cap $4.48B. And finally, scoring 31,646 shares of Cronos Group Inc. (TSX: CRON) at $0.79, they closed at $16.25 – market cap $2.87B. And voila, our fantasy 100k would be today worth nearly $2.5M this morning ($2,426,574.00) — a stunning 2326.57% lift in 33 months!

Wow.

Now where are we today? I ask an the CEO of CannaIncome Fund Arthur Kwan – is it too late? He responds: “With Tilray (NASDAQ: TLRY) reaching an intra-day high of US$300 and closing at US$214 today, the mass hysteria surrounding cannabis stocks continues. With a market capitalization of US$20 billion, it is hard to fathom that Tilray, in a matter of a few short months since going public, is now larger than Canopy Growth (TSX: WEED) and other well-known brands, including WhirlPool, Harley-Davidson, and Hyatt Hotels.

While there is no doubt that this is a very over-heated market, we continue to believe that there’s value in this sector, although now you may have to dig a little harder to find that hidden gem. We see opportunities in the next ‘wave’ of growth companies as we get closer to legalization in Canada including edibles, beverages, and biosynthesis.”

He tells me that CannaIncome is maintaining their market advantage by “investing in the early pre-IPO rounds at significant discounts to public company valuations.”

InvestorIntel Editor Matthew Bohlsen provided us with the following updates on half a dozen cannabis sector companies that are advertisers on InvestorIntel. The companies are listed by market cap, these numbers were taken from TD Waterhouse on September 20, 2018.

WeedMD Inc. (TSXV: WMD), $228.04M Market Cap: WeedMD Inc. is a Canadian licensed producer and distributor of cannabis with large production facilities in Canada. The Company recently announced it has completed the export of its cannabis genetics to Australia’s Medifarm.

Edward Harris, Managing Director of Medifarm, said: “Medifarm prides itself on the cultivation of exclusive cannabis genetics, supported by proven breeding programs used in university and hospital clinical trials for therapeutic use. WeedMD’s highly regarded cannabis strains will help us bring Australians continued access to a diverse set of consistent, quality cannabis products, ensuring that our patients have access to clinically validated and cost-effective medicine for their therapeutic use is paramount for Medifarm.”

Early in September 2018, WeedMD announced it has now completed the first harvest from its modern greenhouse in Strathroy, Ontario. The Company marked the event with a WeedMD “First Harvest” celebration party, a community open house that welcomed well over 120 guests that included WeedMD’s Board of Directors, local government, business leaders, investors, media representatives and employees.

Keith Merker, CEO of WeedMD said: “We’re proud to have been able to share this important milestone with our community, stakeholders, employees and industry. The first harvest was completed in early September and resulted in an impressive yield from our first 10,000 square foot grow room.”

I am guessing it must have been a great party, and I hope to get an invitation to the next one as this WeedMD is having great success both in Canada and soon in Australia.

Scythian Biosciences Corp. (CSE: SCYB | OTC – Nasdaq Intl: SCCYF), $173.9M Market Cap: Scythian Biosciences Corp. is an international cannabis company with a focus on the burgeoning U.S. medical cannabis marketplace. Its strategic investments and partnerships across cultivation, distribution and retail complement the company’s R&D program with the University of Miami. It is this comprehensive approach that is positioning Scythian as a future frontrunner in the United States’ medical cannabis industry.

Scythian has initiated its international expansion by launching additional cannabis related activities across the globe. The Company is evaluating several strategic initiatives and pursuing partnerships with local cultivators, pharmaceutical import and distribution entities and universities in North America, South America, Caribbean and beyond.

Just as any area of the body begins to swell after impact and injury due to inflammation, brain tissue itself does as well. Unfortunately, because the brain is confined inside the skull, the inflammation naturally triggered ends up causing even more damage as the process continually pushes already-injured brain tissue against bone. For contact sports players, repeated concussions can have devastating effects later in life. Cannabinoids are an effective treatment for mild brain trauma (concussions). This is going to be great news for professional sports organizations involved in contact sports and should hopefully lead to wide spread adoption for Scythian’s therapy and products.

Viridium Pacific Group Ltd. (TSXV: VIR), $44.82M Market Cap: Viridium Pacific Group Ltd. is a Canadian producer of medical cannabis products. It is proceeding to meet the health Canada requirements to amend its current producer license to include a license to sell. The Company is involved in consumer wellness and biotech innovation, with interests spanning across agricultural production, property development, and financial services.

Viridium Pacific is positioned to develop and expand into new markets across multiple platforms. Earlier this year, a subsidiary of Viridium, Experion Bio-technologies acquired 25 new cannabis strains from a renowned Dutch supplier, increasing the number of strains available from 2 to 27. The new cannabis strains acquired by Experion are proprietary strains developed in one of the most sophisticated breeding programs in the world.

Viridium has signed a Letter of Intent (September 13, 2018) with Montreal Medical Cannabis Inc. (“MMCI”) to establish a partnership in Pointe Claire, Quebec. With only 9 of 116 Canadian license producers headquartered in the province, Quebec represents a significant opportunity for Viridium to establish licensed cannabis cultivation and distribution. Viridium Pacific will provide expertise to help prepare the MMCI facility for Health Canada inspections, and expedite the application process under its licensed subsidiary, Experion Biotechnologies Inc. The facility currently under renovation is 76,000 square feet with an anticipated output of cannabis over 10,000 kg per year. On October 17, 2018, Canada is to become the third nation in the world to formally legalize cannabis for recreational use and become the first G7 nation to do so. Viridium are in a perfect position in a fast-growing industry with new legislation ready to take effect.

NanoSphere Health Sciences Inc. (CSE: NSHS) Market Cap $37.66M: NanoSphere Health Sciences Inc.’s Evolve Formulas product is the provider of the world’s first and only scientifically proven nano particle delivery system for cannabis. For those that can remember the original Star Trek series, the Evolve product administers directly into the system in a similar way to the Doctor on the Enterprise administered medicine. They called it a hypo-spray. This cutting edge technology eliminates the need for inhalation or ingestion of cannabis, offering users a safer and more effective method of consumption.

The onset time of cannabinoids delivered by the NanoSphere Delivery System™ is just 10 minutes, thereby relieving the user from pain and anxiety in an extremely short period of time. NanoSphere was recognized as Company of the Year for Nano Biotechnology and Innovative, Company of the Year for Healthcare, and three 2018 Global Awards from ACQ5, a premier global corporate magazine. NanoSphere has partnered with Delta 9 Cannabis INC to bring products from its cannabis brand, Evolve Formulas, into the Canadian market, under an agreement, that will see a 50/50 net revenue share from sale of Evolve Formulas products.

The NanoSphere Delivery System could be an ideal way to deliver vitamins, minerals, super-nutrients into the system as well as eliminate the use for needles to deliver medicines. That’s got to make parents and kids very happy.

Global Cannabis Applications Corp. (CSE: APP | OTCQB: FUAPF), $20.22M Market Cap: Global Cannabis Applications Corp.  (“GCAC”) goal is to build a technology-enabled community to improve the health and wellness of medical patients and users alike. The Company has created the Citizen Green Community, a database that uses a mobile app platform for subscribers to interact with other medicinal cannabis users to share benefits, knowledge and personal experiences from their use.

Their Prescriptii app is designed to help patients find the appropriate products for their medical condition. It allows patients to easily rate the cannabis products they have been prescribed, learn about products that have helped other patients, and provide feedback about the effectiveness.

The Company’s CannaLife app was designed to create conversation, share ideas, and promote education on a single social platform (the Cannabis Facebook?). Real conversations will take place showing users what is trending, who to follow, tag, subscribe, and communities to join. Users can also lead the conversation by creating their own communities or sharing information by taking a snapshot from a web page.

With the Prescriptii and CannaLife apps, and the Citizen Green data platform, GCAC is establishing a leadership position by using science and advance technology to gain important insight into the medical cannabis industry. Because of legislation, data on cannabis use and its effects hasn’t really existed for obvious reasons (who wanted it known that you were a user). Now GCAC is giving medicinal users the chance to record and share experiences on the Company’s Citizen Green apps.

CO2 GRO Inc. (TSXV: GROW), $10.62M Market Cap: CO2 GRO Inc.’s (“GROW”) mission is to accelerate all outdoor and indoor plants naturally, safe and economically using its patented advanced CO2 foliar spray technologies. Recent trials are proof of this, with results on CO2 foliar spray versus CO2 gassing. Spraying dissolved CO2 to the top as well as the bottom of a lettuce leaf is more effective in stimulating dramatically faster plant growth and plant size/mass than CO2 gassing. This also proves why GROW’s CO2 Foliar Spray technology integrated into advanced irrigation boom trials are showing sharply faster and larger plant growth.

CEO John Archibald noted: “This additional St. Cloud State University discovery and success integrating our CO2 technology into irrigation spray booms provides further evidence of the commercial potential of our technology. Our revenue generation model is long term site technology licenses and lease of our integration equipment in both indoor and outdoor boom spray systems.”

In August, CO2 GRO conducted their second cannabis trial with a positive commercial indoor trial. The second trial was on a leafier indicia strain that yielded an estimated 60% increase in bud value whereas the first trial on a stringier sativa strain yielded an estimated 45% increase. CO2 GRO’s Indica cannabis trial bud weight increased 20%, was grown 20% faster and had 75% more THC than the control bud group.

It is kind of amazing when you think how this could possibly solve food shortage problems and create a stronger cannabis strain. More food is going to be needed globally each year, and CO2 GRO can play an important role.


Tracy Weslosky

Editor:

An accomplished entrepreneur Tracy Weslosky is the CEO for InvestorIntel Corp., a company that publishes InvestorIntel.com, a trusted source of online market information for investors ... <Read more about Tracy Weslosky>


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Comments

  • Posted by Publisher – the source has been asked to be kept Anonymous.

    PUBLISHER NOTE: The below are excerpts from an email received by us this AM. A request to the source to publish anonymously was agreed to. Please note that InvestorIntel does not provide Investment advice, we are a news source. — but we felt this commenter provided wisdom through experience.

    I was in the business during the Dot-Com era, was wild, saw people make loads and loose loads including jobs, houses, marriages.

    Although for you a long time ago, but that period had a distinctive different make-up in the way stocks traded. Back then, there was no Hi Frequency, not the number of multiple markets places, the down tick rule was in place and the NYSE still had Specialists and over a thousand traders on the Floor, people didn’t have direct access like they do now either.

    Even myself who was a XXXXXXXXXX in Toronto that were interlisted in New York had to phone my U.S. orders in and still got a fill.

    Now with technology, algo, hi frequency, co-lo and close to 45 different venues to trade in the U.S., the arbing, front running and momentum driven algo programs just push these stocks (in this case cannabis) however they want. Its technology, small floats and hype that are driving these stocks, not valuation, PE’s, fundamentals etc.

    You have to also remember that for the most part the speculative investors used to turn to gold, commodities and resources, especially in Canada and with the drought in that sector for several years (zero returns) they are back in the cannabis and crypto sectors. How good are those who bought Bitcoin at $20m feeling today.

    The thought of quick money, big returns will always entice greed, Rationale gets thrown out the window.

    Investors hate to be left out when headlines read XYZ rose 50, 75, 100% and their friends and talk at parties is “Oh, did you get in on XYZ, I made a fortune last month”. Human nature, people don’t like to be on side-lines whilst those around them are making supposedly easy money in the market, saw it in Dot-Com, people started trading small, became day traders, gave up their reg jobs, started trading larger on every dip, then BANG, no bounce, dot-com imploded, people lost house, job, retirement savings blew up, even marriages fell apart

    Today will be an important day to see how TLRY and a few other stocks react after yesterday’s action.

    Huge Premiums are being paid for shell companies and RTO’s. There are now hundreds of listed Cannabis/Marijuana companies in Canada and the larger ones are looking to interlist in U.S.

    The momentum and hype is still bullish, if you can get in on some of these deals then so be it. Demand far outnumbers offerings.

    To get in to participate on a lot of these new issues/deals you have to be a sizeable player or you get shut out as a lot are internalised.

    Retail all want in and these things are oversubscribed in most cases at moment, so as I’ve said to friends and clients, if you are not in that tight loop of deal makers, the only way to participate is to cut a decent size chq to get a piece or wait till listed and trade in open market.

    At the end of the day this sector will sort itself out, not all will survive, the market will become saturated, prices for the product will eventually fall due to competition.

    The thing that remains on the horizon is what trump and his admin decide re the sector, legalise or not, will there be issues as reported at the Canada-U.S. border.

    Will the Canadian Gov’t at any point again further delay implementation.

    A lot of unknown’s, but for now the sector is HOT and so you go with flow, but be alert for an abrupt reversal or possible implosion.” — end of email.

    September 20, 2018 - 7:57 AM

  • Viridium featured in InvestorIntel's "Move over Fantasy Football, the Cannabis Market just got very real." – Viridium Pacific
    October 2, 2018 - 8:47 AM

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