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Activity within the Canadian cannabis industry has picked up over the last two weeks and we believe this is just beginning as the month of December has been highlighted by increased M&A activity, company funding agreements and new investment opportunities.
One of the most highly anticipated initial public offerings (IPO) will take place today as Emblem Corp is set to commence trading on the TSX Venture Exchange this morning under the symbol EMC.V.
Emblem is a licensed medical cannabis producer in Canada uniquely positioned within the rapidly growing medical and recreational cannabis industry.
An Attractive Cannabis and Biotech Investment
We are favorable on Emblem for the following reasons: 1) The company operates three distinct divisions which can create value for each other, 2) It recently completed a capital raise that was oversubscribed and the company has seen remarkably high interest from the marketplace, 3) Its Emblem Cannabis division started selling medical cannabis in August and we expect to see continued growth on a month-over-month basis, 4) It is led by a management team that has a proven track record of building successful multi-billion dollar companies, and 5) Its current valuation is attractive as we expect to see incremental growth on a year-over-year basis.
Emblem’s pharmaceutical efforts are led by President John Stewart who will lead the launch of cannabinoid-based medications in customary pharmaceutical dosage forms such as liquids, gel caps, oral sprays, and inhalers. Stewart has launched 11 new products, including OxyContin and was previously the CEO of Purdue Pharma, the largest privately held pharmaceutical company in the world.
By using a more natural cannabis extract, Stewart is trying to create safe standardized dosage medication in pill form. The development of a product like this would allow Emblem to compete in the global pain and sleep market, the largest pharmaceutical markets in the world.
An Attractive Management Team and Valuation
Emblem is led by its founders and a management team with a proven track record of success. Since inception, management has invested over $6 million and executed on its plan to build a state-of-the-art facility that produces world class products.
The company’s flawless execution and excellent capital structure (includes over 1,000 shareholders) makes Emblem incredibly attractive to the capital markets.
Its pre-IPO valuation is $63 million ($90 million on a fully diluted basis) which is very attractive as it is significantly lower than other licensed medical cannabis producers in Canada.
We expect Emblem to see rapid growth on account of its unique three-pronged approach: dedicated to the production of premium quality cannabis, patient and physician education creating easy access and a pharmaceutical approach that is second to none.
Canadian Broker-Dealer Releases Report on Emblem
PI Financial released a report on Emblem that provides insight to the business. The analyst, Jason Zandberg, issued the company a Buy rating and a $3.25 price target within the first 12 months.
Zandberg said, “Emblem has a number of things in its favor, including a strong management team, a state-of-the-art facility in Ontario, a solid patient onboarding strategy, and a pharmacy background, which he thinks will prove to be important because he expects pharmacies will ultimately act as distribution points for marijuana.”
This is a stocks to watch! Sign up for Technical420 to stay up-to-date with Emblem Corp…
Important Investor Disclosures
Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report
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