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Cannabis stocks surged higher on Friday and this comes after President Donald Trump promised to support states’ rights, especially when it comes to legal marijuana.
This is a major catalyst for the United States legal marijuana industry and we are very excited by this show of support. Cannabis stocks traded higher on strong volume and this is a trend that investors need to keep an eye on.
The United States legal marijuana industry has shown new signs of life and we have highlighted three companies capitalizing on this opportunity.
MPX: A Leading United States Marijuana Company
MPX Bioceutical (MPX.CN) (MPXEF) jumped more than 20% higher on Friday and we remain bullish on MPX and continue to see upside to current levels as the company continues to execute flawlessly on growth initiatives.
Earlier this month, MPX opened another Health for Life medical marijuana dispensary in Phoenix. This opening increased the number of dispensaries under MPX management in Arizona’s Sun Valley to four.
MPX also has significant leverage to the burgeoning recreational and medical marijuana market in Nevada and we are bullish on their position within this market. Nevada has been one of the hottest markets since the state legalized recreational marijuana and we expect MPX to report very strong numbers going forward.
MPX also owns assets in Massachusetts supporting cultivation, production and up to three dispensaries, and with the closing of this recent transaction, MPX manages three full service dispensaries and one producer in Maryland. The company also leases a property in Owen Sound, Ontario, for which an application to Health Canada has been made for a cannabis production and sales license. This is a company that is ready to rally if Donald Trump stands by his promise to support states’ rights.
Sunniva: An Attractive Operating Structure
Sunniva (SNN.CN) (SNNVF) received a favorable response to recent developments and the shares rallied more than 20% on Friday. Sunniva is a vertically integrated medical cannabis company levered to the burgeoning medical marijuana markets in Canada and California. The company is comprised of three distinct divisions which can create value for each other as well as improve the value proposition of the entire company.
Sunniva’s three divisions are focused on cannabis production through Sunniva Current Good Manufacturing Practice standards (cGMP) Greenhouse (Canada and California), patient education through Natural Health Services (Canada), and best-in-class therapeutic delivery devices through Vapor Connoisseur (North America).
In October, Sunniva recorded a milestone and was granted a Conditional Use Permit for its California facility. The following month, the company broke ground on the California designed cGMP Campus which will have a dispensary on-site and is expected to be operational by the third quarter of 2018. This facility is going to be massive and will be completed in two phases. Phase One includes the construction of a 325,000 sq. ft. facility, comprised of eight 22,000 sq. ft. flower rooms. Phase two will be 165,000 sq. ft. facility, comprised of eight 10,000 sq. ft. flower rooms.
Sunniva has taken a very strategic and profitable approach to the California facility. The company expects 50% of the facility cultivation to be initially manufactured into higher margin extracted products. The company is currently negotiating letters of intent with distribution networks and are negotiating long-term supply contracts with brands for private label services.
Sunniva is one of the only companies levered to both the California and Canadian marijuana market and we are very excited by this leverage. We will keep an eye on how the shares continue to trade and investors want to keep this company on their radar.
FinCanna: Improves its California Cannabis Portfolio
Over the last few months, we have highlighted FinCanna Capital Corp. (CSE: CALI) (FNNZF) as an attractive company levered to the California licensed medical cannabis market. The company is focused on executing its “royalty model” business plan and is building a portfolio of investments in scalable best-in-class projects.
FinCanna’s flagship investment is in Cultivation Technologies Inc.'s (CTI) which plans to construct an indoor medical cannabis facility to be developed on a six-acre site in Coachella, California. The Coachella Campus is designed to be a 111,500 sq. ft. state-of-the-art facility that will include cultivation, extraction, manufacturing, testing and distribution.
Last month, FinCanna signed a binding term sheet with Gram Co Holdings, a cannabinoid research and refinement facility focused on providing products and services to licensed medical dispensaries, infused product manufacturers and other California cannabis businesses.
Gram Co plans to be a premier producer of bulk quantities of THC distillate and various concentrates produced via hydrocarbon-based solvent extraction. Gram Co also plans to provide white labeling services to licensed brand and infused product manufacturers who do not have direct access to compliant production facilities.
Gram Co has leased a facility in Oakland, California in which they are retrofitting a large, state-of-the-art medical cannabis extraction laboratory, which is expected to be operating by the end of the third quarter of 2018.
FinCanna surged higher on Friday and the shares rallied well off its recent lows. We are favorable on this move higher and continue to keep a close eye on the shares. This is a stock that is very underappreciated, and one investors need to watch.