SOL Global has a new name Bluma Wellness Inc., and a new focus to become profitable

SOL Global Investments Corp. (CSE: SOL) will be having a special meeting of common shareholders on October 15, 2019 where they will be asked to consider and approve the proposed change of business from an international cannabis investment company, to that of a U.S. multi-state cannabis operator (MSO) under the Life Sciences category of the Canadian Securities Exchange (CSE). In connection with the Company’s proposed change of business shareholders will also be asked to consider and approve a change of name of the Company to “Bluma Wellness Inc.”.

SOL Investment Group (SIG) will be spun out of SOL Global and operate completely independent of Bluma Wellness and HeavenlyRx. SOL Global intends to spin off all of SOL Global’s non-multi-state cannabis operator (MSO) assets not under the Bluma Wellness umbrella to SIG. Further details of the spin-off transaction will be provided in the coming weeks as the Company works to conclude its strategic review of its assets. The purpose is to fully reflect the value of the different assets. Andrew DeFrancesco will lead the newly formed SOL Investment Group (SIG) and step down from his roles as Chairman & CIO of SOL Global.

SOL Global to focus on the US states of Florida, Michigan and California and on being more profitable

Initial operations for SOL Global will include assets in three of the top ten cannabis revenue markets in the U.S; namely Florida, Michigan and California. The new Company strategy is also to be more profitable by keeping the capital and operating expenses low with an efficiency-driven model of integrating operations and streamlining.

The timing of the proposed change of business is strategic, as SOL Global CEO Brady Cobb commented: “One of the innate strengths of SOL Global’s management is knowing when to enter a market, as is evidenced with our early success in Canada and Florida. We have planned this transition and the market entrance of our MSO to coincide with the rapid growth of the legal U.S. cannabis marketplace amid a presumptive tail wind from federal policy reform initiatives related to cannabis.”

Bluma Wellness – Everyone to “bloom”

The Company’s proposed change of name to Bluma Wellness Inc. was selected to ensure that patients and consumers utilizing SOL Global’s plant-based products can enhance their daily lives, namely to bloom and thrive. Bluma is an ancient Hebrew word which means to flower, bloom or blossom.

Mr. Cobb adds: “We chose the name Bluma Wellness as an appropriate way to honor the true intent of each seed that we cultivate, harvest, and deliver as a product.”

SOL plans to complete previously announced acquisitions. This will include the licensed dispensaries operated by MCP Wellness in Michigan (April 24, 2019), California based acquisitions which include the famed Humboldt, cultivator “Northern Emeralds” and dispensary chain “One Plant USA” (May 16, 2019). The resulting products of the new combined company Bluma Wellness will be powered by Northern Emeralds’ genetics cultivation and processing techniques that will be anchored by the brands and products that SOL Global has invested in. The product will then be deployed by dispensaries that include One Plant’s robust retail arm across the states of Florida, Michigan, and California.

Some of the SOL Global’s portfolio of investments 

Note: Added to above is also PRØHBTD, which is a media platform built exclusively to create, develop and market cannabis brands to global audiences. Also a ~42% stake in Heavenly Rx Ltd, and an alliance with the University of Miami.

Despite market volatility, SOL Global is holding to its strategic direction and has continued to make additional investments in the cannabis, CBD and hemp sectors. The Company’s renewed focus is on the key US states of Michigan, California, and Florida. SOL is also investing in operational upgrades to efficiently scale up operations to expedite the path to profitability for the newly named Bluma Wellness, which they expect will ultimately deliver value to shareholders. SOL Global certainly has firm plans to bloom in a new name, and now a whole new structure.

SOL Global Investments Corp. is headquartered in Toronto Canada; and has a market cap of C$ 70 million.

FinCanna CEO on the largest cannabis market opportunity in North America

“We are a royalty financing company focused on the US, particularly California. We finance companies in exchange for a royalty which is a percentage of their topline revenue and in perpetuity…Our royalties average about 10% of topline revenue. As the companies grow and they scale, our revenue scales with them.” States Andriyko Herchak, CEO and Director of FinCanna Capital Corp. (CSE: CALI | OTCQB: FNNZF), in an interview with InvestorIntel’s Tracy Weslosky.

Andriyko went on to discuss that California is the largest cannabis market in North America and is about twice the size of all of the Canadian cannabis market put together. The California market is still in its early days and presents a good opportunity for investors who have missed the Canadian cannabis market boom.

To access the complete interview, click here

Disclaimer: FinCanna Capital Corp. is an advertorial member of InvestorIntel Corp.

MI3 Market Alert: Low cost producer of Cannabis ingredients

Mario Drolet President of MI3 Communications Financières Inc. (MI3) released a technical note at market open today on EXMceuticals Inc. (CSE: EXM) for exclusive distribution on InvestorIntel. In this note, MI3 highlighted the following points on EXMceuticals Inc.

  • EXM is headquartered in Canada, with its cultivation operations located in several countries in Central/Southern Africa – Uganda, Malawi & the Democratic Republic of the Congo (DRC).
  • Emerging low-cost operator in the high growth CBD and cannabis extracted ingredients market with the potential to create the world’s largest cannabis ingredients supply chain solution
  • Only 39.2M shares outstanding
  • EXM brand new IPO … lookout for Sector and stock rebound!!!
  • Support: S2; $1.16   S1; $1.30   Resistance:   R1; $1.38     R2; $1.44 R3; $1.56

About EXMceuticals Inc.

EXM’s activities are focused on the sustainable cultivation of cannabis and hemp, and the production of high-grade ingredients for the pharmaceutical, therapeutical, nutraceutical and cosmetic industries. The Company proposes to sell the produced ingredients to international markets.

EXM, through its subsidiary, Prime Ranchers Limited, EXM is able to cultivate and process cannabis in Uganda at an industrial scale. The Uganda processing facilities are installed and will produce and export pharmaceutical, therapeutical, nutraceutical and cosmetic grade cannabis ingredients.

EXM owns a provisional license in Malawi enabling the cultivation of 50Ha of Cannabis and is in the process of obtaining a full license, in partnership with a large local agro producer.

EXM, through its subsidiary and in-country partner, holds the rights to a cannabis license in the Kuba Kingdom, Mweka, Kasai Province, Democratic Republic of Congo, and the rights to a land concession for the cultivation of cannabis and hemp, and processing and export of high-grade cannabis extracted ingredients.

EXM has also submitted applications and undertaken negotiations with local governments and partners in Ethiopia, Zambia, Eswatini and Burundi, in order to obtain licences to permit the cultivation of cannabis and hemp, as well as the processing, transformation and export of psychotropic and non-psychotropic cannabinoid ingredients. In Ethiopia, EXM is in its final stage of negotiation with the government for an agro-industrial park, of 4,000 hectares (9,880 acres) encompassing a free trade zone, for which EXM has already obtain land rights over 2,000 hectares (4,940 acres) in the Amhara region.


Disclaimer: This MI3 Technical Note produced by MI³ Communications Financières is neither an offer to sell, nor the solicitation of an offer to buy any of the securities discussed therein. The information contained is prepared by MI3, emanating from sources deemed to be reliable. MI3 Communications Financières makes no representations or warranties with respect to the accuracy, correctness or completeness of such information. MI³ Communications Financières accepts no liability whatsoever for any loss arising from the use of the information contained therein. Please take note that for compliance purposes, all directors, consultants or employees of MI3 Communications Financières are prohibited from trading the securities of the company and MI3 Communications Financières is a shareholder and do not intend to sell any shares during the distribution of this note.

FinCanna Capital well positioned with royalty business model in the heralded American cannabis industry

A key point to know for cannabis investors is that California is the largest legal marijuana market in the world. The sheer size and population of around 40 million is making California the epicenter of the United States cannabis market. The state has around 1 million medical cannabis users. California is also the largest state economy in the US and is the fifth largest economy in the world.

The cannabis market is forecast to grow very strongly

A 2019 report on the cannabis market stated: “Worldwide legal cannabis spending hits $12.2 billion in 2018, projected to grow 38% to $16.9 billion in 2019.” An earlier (2018) report by Arcview Market Research and BDS Analytics stated: “The (global) cannabis market could triple in size in the next four years. In fact, by 2022, the global cannabis market could be worth as much as $32 billion, a three-fold increase in just five years with the U.S. expected to fuel much of that growth with an expected market value of $23.3 billion. Much of the current growth we’re seeing comes from California’s cannabis market, which is expected to exceed $5.1 billion market value in the next year after legalizing its recreational use on January 1, 2018.”

Worldwide legal cannabis sales 2017

Worldwide legal cannabis sales 2017

FinCanna Capital Corp. (CSE: CALI | OTCQB: FNNZF) (“FinCanna”) is a royalty company that provides growth capital to rapidly emerging private companies operating in the licensed U.S cannabis industry. The Company earns its revenue from royalties paid by its investee companies that are calculated based on a percentage their total revenues

FinCanna’s mission and royalty business model

FinCanna’s mission is to combine extensive investment expertise and industry experience in providing growth capital to rapidly emerging private companies operating in the licensed U.S. cannabis industry with a focus on California.

FinCanna’s royalty financing offering is an alternative or complement to debt and equity financing. It provides the advantage of allowing investees to maintain financial flexibility and control of their business as opposed to entering into arrangements that may include restrictive debt structures or giving up an ownership stake.

FinCanna’s royalty portfolio

  • ezGreen Compliance offers a state-of-the-art enterprise compliance and point-of-sale software solution (ezGreen) for licensed medical cannabis dispensaries and cultivators. FinCanna earns a perpetual royalty equal to 10% of consolidated gross revenues of ezGreen, subject to certain buy-back options.
  • QVI Inc. is a cannabis infused product manufacturer located in Sonoma, 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. FinCanna will earn a perpetual royalty ranging from 15% to 6% of QVI’s annual revenues, subject to certain buy-back options.
  • Refined Resin Technologies Inc. is a cannabinoid research and refinery company that will provide B2B and B2C products and services to licensed dispensaries and distributors in the medical cannabis supply chain. Upon completion of funding, FinCanna will earn a perpetual royalty ranging from 16% to 7% of Refined Resin’s consolidated annual revenues, subject to certain buy-back options.
  • Cultivation Technologies Inc. (CTI) has growing/extraction/testing/educational facilities and plans to build a large-scale indoor medical cannabis facility in Southern California.

FinCanna’s deal pipeline for H2 2019

Not yet able to release exact details FinCanna has revealed a strong deal flow ahead, with new acquisition opportunities in the pipeline for H2 2019 .

FinCanna’s deal pipeline

FinCanna is focused on delivering high-impact returns to its shareholders by way of a strategically diversified investment portfolio with a focus on US medical cannabis companies. FinCanna maintains a very strong cash position within a diversified investment portfolio across the US medical cannabis sector.

Given the explosive growth forecast ahead for the US cannabis market, FinCanna is in the right place at the right time as the US cannabis industry looks set to take off. FinCanna Capital Corp. has a market cap of C$ 15.3 million.

Analysts predict Village Farms’ low cost, high-quality cannabis (and soon US hemp) producer may have a 143% upside

Under the new US federal law hemp is legal, as long as it contains no more than 0.3% tetrahydrocannabinol (THC). Many cannabis supporters believe that hemp legalization is an important first step in legalizing cannabis at a US federal level. Whilst hemp is now federally legal, the US states are still to catch up. The state of Texas looks likely to legalize hemp (<0.3% THC) before June 16, 2019.

Village Farms International Inc. (TSX: VFF | NASDAQ: VFF) is a leader in high tech, low cost, vertically integrated greenhouse growing. Village Farms has 100% owned greenhouses (Delta BC, West Texas), 50% owned cannabis JV greenhouses (Delta BC), and growing partners (Mexico, Ontario, BC). The various greenhouses grow vegetables as well as legal cannabis, and will soon potentially also grow hemp.

Village Farms greenhouses

Village Farms has a mission to lead the industry as the premier grower and marketer of branded, premium quality, greenhouse grown fresh produce in North America. Added to this is their goal to be Canada’s low cost, high-quality cannabis (and soon US hemp) producer.

Village Farms making moves with hemp in Texas

Subject to the June 16, 2019 deadline for the Governor to veto bills, House Bill 1325 (hemp legalization) will become law in Texas. In anticipation, Village Farms has begun the conversion of half of its 1.3 million square foot, ultra high tech Permian Basin greenhouse for both cultivations of high cannabidiol (CBD) hemp and CBD extraction. Licenses for both processes will be a requirement. The conversion of 635,000 square feet will incorporate all of the systems necessary for year-round hemp cultivation but can, if ready, commence immediate hemp cultivation using existing systems if it was licensed to do so. The Company expects the facility to be ready for production in the third quarter of 2019, with extraction operations also to be added in the existing facility in the same year. The Hemp plant is a very fast growing crop that can produce 250% more fiber than cotton and 600% more fiber than flax within the same land footprint. To be prepared for the passing of the hemp bill in Texas, Village Farms began the design and development of their site specific growing and technical systems following the passing of the federal Farm Bill in December 2018.

Village Farms sees large scale hemp potential

Note: Village Fields Hemp is 65% owned by Village Farms, and 35% owned by Nature Crisp.

Michael DeGiglio, CEO Village Farms International said: “With the potential for a hemp bill to be passed in Texas, we took the calculated risk of readying a portion of our Permian Basin facility, and, as a result, we will be a first mover in the Texas hemp industry.”

During the month of May, Village Farms International, Inc. also announced it has entered into an agreement with Arkansas Valley Hemp to form a joint venture for the outdoor cultivation of high cannabidiol (CBD) hemp and CBD extraction in Colorado. The joint venture, Arkansas Valley Green and Gold Hemp will be 60% owned by Village Farms, 35% owned by AV Hemp, and 5% owned by Village Fields Hemp.

Mr. DeGiglio added: “Village Farms is uniquely positioned for the significant opportunity in hemp-derived CBD. We are moving quickly to scale outdoor cultivation to complement our existing, state-of-the-art greenhouse operations in Texas.”

Village Farms offers investors exposure to cannabis production in Canada, future exposure to cannabis and hemp in the US and globally, as well as an established food produce business.

Financials are solid with net profit forecast to rise 2.5 fold from 2019 to 2020, and a 2020 PE of 26.9. Analyst’s consensus price target is C$43 (US$32) representing 143% upside.

Village Farms International Inc. has a market cap of C$ 871 million and is headquartered in British Columbia, Canada.

Is the grass greener on the other side?

When Canada became the first industrialized nation and the second country in the world after Uruguay, to legalize and regulate recreational cannabis in October 2018, it became the world’s benchmark on how to enable a commercial cannabis market. Countries around the world are closely observing Canada and exploring whether they should make similar adjustments to their narcotics laws. Legal US and Canadian weed companies are seeing soaring revenues from their recreational and medicinal cannabis investments. Many governments are noting the plant’s lucrative potential for commercialism and hence tax revenue.

The chart below forecasts steady growth in the US cannabis industry revenue. Should the legalization of cannabis continue to spread across the US, as is widely expected, then revenues are likely to grow even quicker.

Source: Statista

Cannabis legalization is the new trend

In the US support for cannabis legalization, this year hit an all-time high with nearly two-thirds of Americans favoring broad recreational legalization. Eight years ago, medical cannabis was legal in only 17 states and the District of Columbia, while at the same time recreational marijuana wasn’t legal at all. Today, medical marijuana programs are on the books in 33 states, and now 10 states allow some recreational use to some degree. Cannabis edibles legalization adds to this potential. The take-home point is that the cannabis industry is quickly being legalized, and this should allow well-established cannabis companies to rapidly grow their businesses.

Three billion dollar cannabis companies to consider

Aurora Cannabis Inc. (TSX: ACB | NYSE: ACB) is a Canadian based medical cannabis company that has a current production capacity of 150,000 kilograms annually and is expected to reach 625,000 kilograms on an annual basis by December 31, 2020. Aurora Cannabis is not yet profitable but revenue is forecast to rise 4.9 fold from an estimated C$273 million in 2019 to C$1,337 million by 2021, leading to a forecast C$183 million operating profit by 2021 (C$163 million net profit). Aurora Cannabis Inc. has an analyst’s consensus price target of C$14.67 (25% upside) and has a market cap of C$ 11.9 billion. Aurora is certainly not cheap, but they are in a dominant market leading position.

Aphria Inc. (TSX: APHA | NYSE: APHA) produces and sells medical cannabis in Canada and internationally. The Company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. The Company serves patients and health professionals, as well as selling their products online. Aphria is not yet profitable but revenue is forecast to rise over 5 fold from an estimated C$226 million in 2019 to C$1,179 million by 2021, leading to a forecast C$138 million operating profit by 2021. Aphria Inc. has an analyst’s consensus price target of C$16.78 (82% upside) and a market cap of C$ 2.3 billion.

The Green Organic Dutchman Holdings Ltd. (TSX: TGOD | OTCQX: TGODF) produces organic cannabis products, including organic dried cannabis, cannabis oils and edibles, fresh cannabis, and seeds for medical applications in Canada. For the quarter ended March 31, 2019, the Company reported revenues primarily from HemPoland of $2.4 million, a 28% increase over the prior quarter. The Company is about producing organic certified cannabis, using different biological systems more complex than traditional growing methods. The Green Organic Dutchman has a market cap of C$ 1.07 billion.

As shown below, the worldwide use of cannabis is very extensive and not likely to slow down any time soon.

Worldwide prevalence of cannabis use (Source: Wikipedia)

The good news for investors is that many politicians worldwide are beginning to see the tax windfalls enjoyed by trailblazers such as Canada and the legal US States. This is most likely causing a global attitude shift towards legalization of cannabis by many governments. This can only help benefit the industry.

The bad news for newer investors is that the sector has been a star performer the past year and prices and valuations have run up significantly. For example, Aurora Cannabis is up a massive 73% year to date and 48% in the past year. The potential is there to run further as the sector continues to grow, but some caution will be needed as sharp pullbacks can occur if growth stalls.

It is definitely an exciting time for the cannabis sector and investors; however looking ahead investors will need to study the fundamentals carefully and not just rely on “potluck”.