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The cannabis stock market has once again come into the limelight after Constellation Brands (STZ) announced a $245 million investment in Canopy Growth (WEED.TO), a Canadian licensed marijuana producer.
The legal cannabis industry provides investors with a once-in-a-lifetime opportunity to invest in a sector that is barely in the first inning of a multi-decade growth cycle. We are bullish on the legal cannabis industry and expect to create more millionaires than the tech boom in the 90s.
Today, we have highlighted nine cannabis companies that we believe investors should have their eye on.
CannTrust: Increases Size of its Bought Deal
Yesterday, CannTrust Holdings Inc. (TRST.CN) edged lower after the Canadian marijuana producer announced a $15 million bought deal at $5 a share. After the market closed, CannTrust increased the size of the bought deal to $17.5 million and if the underwriters decide to exercise their over-allotment option in full, this private placement would generate $20 million in aggregate gross proceeds.
CannTrust plans to use the net proceeds to fund the Phase 2 build out of the recently licensed Niagara Greenhouse Facility and for general corporate and working capital purposes. CannTrust expects the first harvest from its Niagara Facility in early November, with full utilization from Phase 1 expected in December. The planned Phase 2 expansion is expected to be completed and in cultivation towards the middle of 2018. Phase 1 and 2 should conservatively provide an additional 40,000 kilograms of annual growing capacity.
CannTrust also arranged for a $15 million mortgage on the Niagara Greenhouse Facility. The mortgage financing and the bought deal would fully fund CannTrust through Phase 2 expansion at the Niagara Greenhouse Facility.
Lexaria: Surges After It Strengthens its IP Portfolio
Lexaria Bioscience Corp. (LXRP) (LXX.CN) surged higher after the company received a new Notice of Allowance from the United States Patent and Trademark Office (USPTO) for the use of its technology as a delivery platform for all cannabinoids including THC; fat soluble vitamins; non-steroidal anti-inflammatory pain medications; and nicotine.
This Notice of Allowance applies to the delivery of all active pharmacological ingredients Lexaria had been seeking. Lexaria expects formal patent issuance within three to four months which is expected to provide protection until at least 2035.
Lexaria’s patented DehydraTECH technology is focused on improved delivery methodologies of many commonly used substances. The technology provides an additional layer of effectiveness that is designed to harmonize with the intellectual property of third parties. Lexaria’s long term strategy is to partner with leading firms as they deliver products to their existing large consumer groups.
CNRP Mining: Valuation is Attractive Despite the Recent Rally
Over the last week, CNRP Mining (CRPGF) has rallied more than 80% and we are monitoring the shares as we believe that this rally still has significant room to run. The company was featured in an exclusive report published by MarijuanaStocks.com called Connect the Dots.
This report highlights CNRP’s value proposition and provides insight into recent company developments and potential catalysts. CNRP recently completed a $3 million non-brokered private placement, signed a definitive agreement to acquire X-Sprays, and we think that the company is just entering a new growth cycle.
Although the shares are up a considerable amount over the last week, we find the valuation to still be attractive. From sleep to energy, the company is focused on areas that have a huge addressable market. CNRP is also levered to a trend toward smokeless marijuana products and we expect this product to resonate with people who do not want to smoke marijuana.
Isodiol: Expands Reach Within the U.S.
Yesterday, Isodiol International Inc. (ISOL.CN) (ISOLF) made a significant announcement after it entered an agreement with Nutritional High (EAT.CN) (SPLIF) to distribute the Pot-O-Coffee, Pot-O-Tea, and Pot-O-Coco product lines.
The agreement will focus on specific markets in Colorado, Oregon, Washington and Illinois, in cooperation with Nutritional High’s partner companies. As a part of this agreement, Nutritional High will complete the final stage of manufacturing by infusing its cannabis into the product and will provide a royalty to Isodiol.
In addition to the licensing agreement, Isodiol announced that it has acquired Culinary Coffee Roasters, LLC, a leading roaster and purveyor of fine coffee, tea and blended formulations, based in Stuart, Florida. Through this acquisition, Isodiol will be poised to launch specialty blends that will be roasted in their own facility and will be available to the retail outlets that are currently being served by Culinary.
In the first quarter of 2018, Isodiol will launch its own line of handcrafted Ready to Drink (RTD) beverages. These products will include an RTD cold brew Pot-O-Coffee line as well as a cold brew Pot-O-Coffee line, all enriched with BioActive Phytoceuticals. Other offerings will include infused coffee and tea shots.
Canopy Growth: Adds Strategic Advisor
Canopy Growth Corporation (WEED.TO) (TWMJF) continues to trade higher and yesterday, the company welcomed the founder of Stampede Management, Ted Chung, as a Strategic Advisor for Content Strategy. Chung will strengthen and leverage responsible brand opportunities for Tweed and other cannabis brands in the lead-up to the legal adult-use market in Canada.
Ted's joining builds upon the recent hiring of Dave Bigioni as the Chief Marketing Officer for all Canopy Growth brands. In August, Bigioni joined Canopy from an executive role at Molson Coors Brewing Company where he spent nine years in sales and marketing functions building one of Canada's iconic beer brands.
Canopy Growth continues to be a top-performer after Constellation Brands (STZ) announced a $245 million investment in the marijuana producer. We continue to remain bullish on Canopy and recommend keeping the stock near the top of your radar.
Vitality Biopharma: Continues to Deliver
Over the last month, Vitality Biopharma (VBIO) has been a top performer and the shares continued to outperform after the company completed pivotal manufacturing agreements that enable the production of clinical-grade cannabinoid pharmaceuticals at its California facilities.
Vitality has implemented these protocols for initial production of cannabosides, the company's cannabinoid prodrugs that are designed to target the gastrointestinal tract and thereby avoid the intoxicating side effects of THC. The biotech firm recently entered a services agreement with a specialist analytical chemistry firm to provide independent verification of the company's analytical procedures and batch release testing, in compliance with FDA and international regulatory standards.
Over the past several years, Vitality Biopharma has developed and optimized a novel biosynthesis process that is now being used to produce cannabinoid pharmaceuticals. The company repurposed its R&D and manufacturing operations to enable pharmaceutical-grade production of cannabosides.
Cannabis Wheaton: Closes Acquisition of RockGarden
Yesterday, Cannabis Wheaton Income Corp. (CBW.V) (KWFLF) signed a definitive share purchase agreement and closed the acquisition of RockGarden Medicinals, which was granted a cultivation license from Health Canada in late August.
The acquisition provides Cannabis Wheaton with additional resources and regulatory tools to help accelerate the pathway to licensing under the ACMPR. RockGarden will act as a strategic tool to help the comapny with on-going partnerships and opportunities. Most importantly, RockGarden will help with the development and execution of its existing and prospective streaming relationships.
Future Farm: Acquiring a 120-Acre Industrial Hemp Farm
Future Farm Technologies Inc. (FFT.CN) (FFRMF) edged lower after the company announced plans to acquire a 120-acre industrial hemp farm in Amity, Maine. Derek Ross the farm operator and Future Farm partner has already harvested the farm's first crop of 5,000 hemp plants and is now currently drying and preparing for CBD oil extraction.
2018 will be a big year for Future Farm. During this time, Future Farm plans to perform extraction onsite by creating a vertically-intergraded, highly efficient large-scale CBD oil production business.
In 2018, Future Farm expects to see a massive increase in the amount of revenue from CBD oil. Next year, the company also expects to grow hemp on at least 120-acres of land, harvesting 1,700 plants per acre, which translates into approximately 10-kilos of CBD distillate per acre.
Golden Leaf: Laser Focused on the Nevada Market
Golden Leaf Holdings (GLH.CN) has been trading mixed after the company was granted a business license to sell cannabis-infused products to dispensaries in Las Vegas. While this announcement was significant, the market did not respond like many people expected.
Golden Leaf is laser focused on the marijuana market in Nevada. Earlier this year, the company acquired a state-wide cultivation and extraction license. Over the last quarter, Golden Leaf was granted business licenses in Spraks, Henderson and Washoe County.
In July, the company replaced its CEO and we continue to monitor how the company executes from here. Golden Leaf has been trending lower and we are monitoring the shares for a bottom.