A year back, I was hitting the medical marijuana sector pretty hard in terms of coverage, writing regularly about everyone from the giants in the making to the companies run by execs who could barely spell marijuana.
I stopped late last year because, frankly, gong show. The big companies had made their mark and got their licenses and the little guys were flailing and laws were all over the place and nobody looked likely to get a new license any time soon.
Today, progress on decriminalization and potential recreational weed use going forward has the weed sector back on the front foot, so I figured it was time to crack the knuckles and look through the end of the business that doesn’t get much play… the small side.
These companies range from full on pump and dumps to interesting side bets to straight up value picks. Some of them I’ve come back into after some time away. Others I wouldn’t touch with Marc Emery’s prison shank.
In no particular order, let’s do this:
VERDE SCIENCE (VRCI): Begone, foul stock frauds.
Status: Pump and dump that never got through the pump stage.
What it claims to do: “Leading edge research for the isolation of highly effective formulations for the treatment of chronic medical disorders.”
What it actually does: Nothing.
Last I wrote about it: I said it was a steaming pile, helmed by a guy infamous for one of the bigger steaming piles in the mining game of the last decade. He took off once the spotlight hit him. Company was Avro Energy until 2012, then Rango Energy until 2014, then suddenly a cutting edge weedco. Not for long.
Where it’s at: Verde is currently boasting a market cap lower than the cost of a slightly used Honda Fit. Stock will cost you $0.0009 per share. Am considering selling oranges on the side of the highway for a few weeks and using the proceeds to launch a takeover, but the oranges might have higher upside.
Invest? Not a chance, son.
Affinor Growers (AFI.C): How you like me now?
Status: Settling debt and doing ‘cover the cost of the office electricity bill’ financing.
What it claims to do: “Affinor Growers offers patented agricultural technology and proprietary cultivation systems enabling food to be grown in natural soil without the use of pesticides, free from chemical contaminates.”
What it actually does: LOI factory.
Last I wrote about it: The stock was in freefall, from $0.50 down to it’s current $0.12. Had moments where rabid supporters would contact me crowing that it had jumped 20% here or there on last trade of the day blips, but this thing shredded paper like an Iron Mountain truck.
Where it’s at: Just did a $100k raise, then settled $130k of debt, stock is doing some weird stuff jumping 60% on no news as I write this, which is par for the course with this mob. A year ago, they were infamous for signing LOIs, then quietly abandoning them after the stock had jumped. Now they appear to actually be doing small deals with their grow tech, even if we’re still waiting for those $1000 per lb strawberries they once promised.
Satori Resources (BUD.V): Have you seen our gold mine?
Status: Weed? What are you talking about? Ain’t no weed here.
What it actually does: “Satori Resources Inc. is a mining exploration company that is evaluating the costs associated with the potential development or re-commissioning of the Tartan Lake Gold Mine project, a historic gold producer, located in Flin Flon, Manitoba.”
Last I wrote about it: Satori was all but dead. It was the pioneer of the mining-to-weed diaspora and had gained popularity based on its ticker symbol alone, but rarely had any cash, plans, or even enough board members to get by. I’d actually gone out to Ontario at one point to try to bring Satori back from the death throes in its marijuana plans, after beating on them for about a year, but there was no point trying to blast through a wall by hitting it repeatedly with one’s head.
Where it’s at: A potential saviour deal was scuppered at the zero hour when I pointed out the arriving CEO was a crazy conspiracy theory-blasting weirdo running an illegal business who was posting jokes about pooping all over social media. 10 to 1 rollback ensues. Company is now focused on raising enough scratch to explore its Flin Flon gold property which, based on its website, could use a hammer.
Invest? Lots of folks are still way under water here, so even if there were good news at some point, there’ll be insufferable churn all the way back. Nope.
Vapor Group (VPOR): Sometimes you eat the bear. Sometimes the bear eats you.
Status: Rollback city.
What it does: “Enhance the smoking habit using the eGo cigarette from the renowned e-cig company, Vapor Group and decline the tobacco wrapped conventional cigarette.”
Last I wrote about it: I think I used the words “shit fight” to describe the company and its CEO, Dror Svorai, who had captured a nice run of success early on with its front running e-cog business, only to get twisted into knots with a succession of bad accounting practices, sacked auditors (yes, plural), and restated financials.
The company share price was all the map, at one point being worth over $100 million, but the CEO kept making promises that the worst was over, so I took the ‘oversold’ approach and bought on the way down, a rookie mistake that I can’t believe I went for. I didn’t lose much more than the cost of a good sushi dinner, but still. Black eye, especially as it wasn’t hard to find information that pointed out what was coming.
Where it’s at: There has been signs of a long, slow climb. They’ve got a million in revs, up from just under a million in revs before that. But the stock is so badly beaten in the minds of the market, there’s no value to be had in expecting a big climb back.
Invest? Do you really think e-cigs are the killer app we’ve all been waiting for? Me either. Not even if marijuana went legal across all fifty states.
Cannabix Technologies (BLO.C): Turn your head and cough.
Status: We’ve got a machine that’s almost as small as your desk that can detect marijuana on your breath!
What it does: “Cannabix is developing tools for law enforcement and the workplace to detect THC in breath.”
Last I wrote about it: I was mentioning how awesome it was that their tech went from ‘size of a room’ to ‘size of a desk’. But the promise was it would be the size of a handheld breathtesting device, and that’s a long way off, especially with well-funded, better-networked competition on their tail.
Where it’s at: Nobody has been better than Cannabix at getting press, and the front page of their website is festooned with it. What’s missing are details of the actual tech, and why they think they’ll commercialize it before the competition, which is already planning clinical trials and roadside tests with police.
Invest? Nope. Cannabix has long been decidedly pumpy, and though some have made money riding its rollercoaster, it’s a complete dice roll to me, with a business plan that bets the farm on big promises.
THC BIomed (THC.C): Didn’t see that coming.
Status: While it waits for permission to sell what it grows, this company is getting busy with marijuana services and science.
What it does: “THC BioMed is an organization strategically located in beautiful Kelowna, BC that is devoted to Research & Development, plant innovation and life sciences, with the emphasis on Medical Cannabis.” Translated: Marijuana support services.
Last I wrote about it: There was really nothing to write about. The company had then been doing business as Thelon Capital and was one of those ‘we’d like to grow it but until we get a license, hey, invest in us?’ companies that were more prone to rumour than news.
Where it’s at: Gotta say, I’m impressed with how the company unfolded. Everything that an unlicensed weed company could do to make a dollar, these guys were doing, from QA training to simulated inspections to strain sales to product testing to R&D, and even a home-based cultivator that looks like an iphone.. But the kicker came in February when they were approved to grow.
And they just acquired a US company, Clone Shipper, that sends seedlings by mail in a package that includes an LED grow light to keep them from fading during transit.
The CEO said recently, “Purchasing Clone Shipper allows THC to penetrate the US and international cannabis market, while remaining in line with the US and international laws, by not dealing directly with cannabis in countries where cannabis remains federally illegal.
And that bong is just a vase, officer.
A deal with Affinor Growers to use their vertical farming tech gives me pause, because Affinor is terrible, but it doesn’t appear the deal is going to cost much, if anything.
Invest? As much as I can dig the activity and the value of an actual grow license, a $73 million market cap right now is nuts for a company that, still, has no license to sell. The expectation that will change is already wired into the share price, so I don’t see value here. That said, weed investors are not adhering to ‘fundamentals first’ thinking right now, rather they’re all in on the Greater Fool idea. Me too. Acquired.
True Leaf Medicine (MJ.C): Sticking to your knitting 101
Status: Doing exactly what they set out to do, developing and selling hemp-based pet products, waiting for weed approval, doing deals.
What they do: “True Leaf Medicine is entering the $104.9 billion global pet care industry with a line of hemp-focused pet chews and supplements marketed through natural pet health and veterinary channels in Canada and the US. The company has also filed an application under Health Canada’s MMPR program to become a Canadian licensed producer.”
Last I wrote about it: Earlier this year, I noted that True Leaf had pushed hard in a space many try and fail in, making good use of CEO Darcy Bromford’s pet industry connections, to take a solid side bet in that space while waiting for their weed license.
Where it’s at: Frankly, if that license never comes, this company is still doing great. Sales are going forward, it’s now got deals in Europe, it has expanded its lines to include not just dog chews, but ‘chewable sticks’ and oils, and the inclusions of elements such as salmon for omega 3, coconut oil, and more shows they’re not just cramming weed into a mold and hoping for the best.
Invest? I am, and here’s why: In early September, with private placement stock becoming free trading, a bunch of guys took their profits and drove the stock down, plunging it from $0.26 to $0.17. Trends over the last handful of trading days show it climbing back, so I’m in on that.
Tinley Beverage Company (TNY.C): Oh, that’s a news release.
Status: Rubber hitting road.
What it does: “Hemplify is a line of fruit-flavored, sugar-free, vegan, drinkable supplements that contain hemp stalk extract. This extract contains terpenes and other phytoconstituents, 9x-12x the potassium electrolyte content of major sports drinks, 200mg of Omega 3 and excellent sources of vitamins A through E. Hemplify is produced with patented technology that elevates absorption into the bloodstream, ensures shelf stability and masks the hemp oil’s taste to deliver delicious, refreshing flavours in Nevada and California.”
Last I wrote about it: Man, this was a shaky little seedling of an idea, built by a former broker who was determined to do it by himself, taking a weed based beverage to dispensaries.
Where it’s at: There have been hiccups, specifically with shelf life, and Tinley is certainly doing it on the smell of an oily rag (literally oily), but a recent announcement that they’re moving to de-alcoholized alcohol drinks, with added weed, moved some serious paper. Company stock went from perennial $0.055 up to $0.09 in two days with volume remaining strong.
Invest? Tempting… I’d be surprised if a financing doesn’t come soon at this price. Might wait for that.
Abattis Bioceuticals (ATT.C): The clown car rolls ever onward.
Status: Who the fuck even knows.
What they do: “Abattis Bioceuticals Corp is a biotechnology company with capabilities, through its wholly owned subsidiaries, of producing, licensing and marketing proprietary ingredients and formulas.” Translated: We gots a good deal on company registration fees and we’re gonna use it.
Last I wrote about it: I couldn’t have spit hard enough. Having gone in and spent hours of my life being walked through every subsidiary and technology and OMGITSGONNABEHUGE, agreeing a marketing contract with them, and then having them kill the contract after it was signed because, “we’re not sure that we can control what you say,” (you’re damned right), I started looking deeper into Maserati Mike Withrow’s companies and did not like what I was finding. And I was not alone.
Where it’s at: One of those subsidiaries, Northern Vine Labs, got a controlled substance license. I do not know how this happened. It’s like hearing Kim Kardashian received a Master’s Degree in Engineering. It makes no sense. Everything I’ve come to know about this world is wrong.
Still, nobody is getting Scarface wealthy testing weed for growers who have already got their testing facilities squared away.
Invest? Hell no. $1.5 million in losses over the last year, as of the last financials filed. How many bags of weed do you need to test to make break even on that?
Maple Leaf Green World (MGW.V): They harvested what now?
Status: There’s actual weed coming out of an actual weed facility that Maple Leaf Green World actually has something to do with!
What they do: From a recent press release:
Maple Leaf is a Canadian company that focuses in the agricultural/environmental industry with four main areas of activity:
- Canadian MMPR – It pursues opportunities within the medical cannabis industry
- California Project – It is currently in a joint venture with a California non-profit collective
- Eco-Agriculture – In China, it is focused on growing value-added tree seedlings and nursery products that assist with anti- desertification.
Last I wrote about it: I didn’t say much because this company is so bass ackward in its news releases that I honestly couldn’t tell what their actual plan was. Some of it involved trees in China. Or strawberries. Kumquats?
Where it’s at: What the shit? There are crops coming out. This is big! Or is it?
So the actual facts of it all are these: MLGW provided cash for a California collective to build its marijuana grow. They’re not harvesting and selling that grow, which is great, and they’re repaying MLGW as ‘rent and consulting’ because, under California laws, a foreign company can’t take part in the weed business. This is known as a ‘leaseback’ operation, and Vodis Pharma (VP.C) is doing something similar in Washington State.
Here’s the thing: Setting up a business through a loophole that could be closed at any time is risky.
Here’s the other thing: It ain’t exactly a high tech operation.
I’ve seen college dorm rooms with better equipment. That said, this is the standard in the US, and why Canadian grows have such high valuations.
Invest? Nope. It’s nice that they’re actually operating, but at a $45.7 million market cap, the value is long sucked out of this one.
Wildflower Marijuana (SUN.C): Enthusiastically testing their own products since 2015
Status: Perpetual search for Doritos and investors.
What it does: “Wildflower Marijuana Inc is a marijuana company engaged in developing and designing branded products in the marijuana sector.”
Last I wrote about it: The company was doing a weird deke from its stated intention of building a bad ass marijuana grow operation.. or two.. or three, and bringing in some cloning tech that could make big money before they even got started, to selling vapes to dispensaries in Washington State. I politely pushed back from the table at that point.
Where it’s at: If you look up the last financials on Sedar, what you’ll find is a company that has no cash, shows no sales, and shows a pattern of small raises every quarter to cover the $100k or so loss that it racks up every quarter.
Look, I like the guys behind the play, as folks I can happily enjoy a beer with. But towards the end it seemed the beers were being replaced by weed vapes and the company ran off the rails in slow motion.
In February, we were told the company was ‘in revenue’ from its vape deal, but the revenue didn’t show up on the May 30 financials, and there’s been no news release since indicating those vape products are buying anyone a condo in Boca.
The big grow facility that caused such stress for NIMBYs on Vancouver Island a few years back? No sign. All the side projects? No sign. I don’t know exactly what people are still buying into their raises for, but it appears maybe good money tossed after bad in the hope that the doors stay open long enough for something to happen. When you see a quarterly loss matched by a quarterly financing, it’s best to move on.
Invest? Not on your life, mate. Show me something, William. And I hope it doesn’t rhyme with ‘schmape pens.’
Lifestyle Delivery Systems: Until you hit the ground, technically you’re flying.
Status: “I hear they’re actually getting their shit together.”
What they do: “Lifestyle Delivery Systems Inc is engaged in the development and licensing of the technologies that produce oral delivery systems used for energy elixirs, herbal remedies and a smokeless alternative option to medical and recreational users of cannabis.” Translated: Weed breath strips.
Last I wrote about them: That’d be about a week ago, when I noted the thing was on a hellacious run, but that the crew behind it have a track record of terrible business, missed promises, broken pledges to not run raises, and the single worst listing open I can remember. Bodies floated down river as investors got turned out. Brokers got their reps sullied after swearing ‘everyone wants in on this’, only for nobody to be interested in buying it on open. A mess in every way.
Buuut.. that stock price tho.
Where it’s at: Funny thing: I hate this stock like poison, but I bought some. Associates have been swearing to me that ‘the old guys are being moved out’ and ‘I hear they’ve actually got their shit together,’ and though I don’t really believe that, a stock on a charge is a stock on a charge.
So I bought back in, partly to make back some of the money the company owes me, partly because I actually do like the product, if they can ever actually sell any.
$0.26 on September 13, $0.70 today. Frankly, I feel like this is akin to buying Bre-X for $1, knowing full well that it’s going to crash and burn, but also knowing that it has some ways to run before that happens.
Invest? I wouldn’t call it investing. I’m riding a skateboard in the wake of a flaming semi trailer filled with military mortar shells, on a road dotted with potholes. What’s the worst that could happen?
InMed Pharmaceuticals (IN.C): No respect, but none needed
Status: They’re saving butterfly kids, man!
What it does: “InMed Pharmaceuticals Inc is a clinical stage biopharmaceutical company. It develops cannabis-based therapies through the research and development into the pharmacology of cannabinoids coupled with drug delivery systems.” Translated: That approved drug shares some molecular structure with something in cannabis, so we can add the cannabis element, go to approval and rocket through the process quickly. Kind of.
Last I wrote about them: I’ve been hinting at this for a while, and have a larger piece in the works, but when I sat down with the new CEO a few weeks back, these guys blew my hair back. Way back in the day, I had said they were a roster of pointy headed all stars just a little time from being able to prove their worth. They’ve gone through a year plus of yawny time since then, but the new guy is ramping shit up.
Where it’s at: Butterfly kids. That is, kids who have no connective tissue between their outer layer of skin and the skin underneath. Painful, horrible, incurable. Only one drug claims to soothe it. InMed thinks they’ve got something that might go a step further. And they’ve filed a patent. And the competitor on this medication recently got acquired for hundreds of millions of dollars. And it will be a novel orphan drug application, which means it goes through quickly.
Dr. Sazzad Hossain, Chief Scientific Officer of InMed, stated in a news release, “There are different sub-types of EBS caused by mutations of various keratin genes such as keratin 5, keratin 14 or keratin 15 etc. By modulating the expression of various keratin genes that are responsible for cytoskeleton intermediate filaments and/or wound healing using INM-750, we hoped to alleviate the EBS symptoms. Our preliminary results clearly validate this approach since INM-750 displayed modulation of expression of various keratin genes.”
Also worth noting: This is just one tech they’ve discovered using Hossain’s platform. They’re working on eye diseases, obstructive pulmonary disease, orofacial pain, and they’ve got a biosynthesis tech that can produce cannabinoids in a microbial host, thereby avoiding the impurities and expense of extraction, which could bring in some serious licensing fees.
Invest? I did, and I’m up 61% in a week. It was up 41% just today, so I’ll be holding for a while.
Green and Hill Industries (GHIL): Just Ross’ latest business failure
Status: Gone dark.
What it does: “Green and Hill Industries Inc license its brand in Canada for medical cannabis strains called Ross’s Platinum, Ross’s Gold, Ross’s Silver and Ross’s Bronze with specific THC/CBD levels for specific ailments.”
Last I wrote about it: Boy, I had some fun with this bucket of bullshit. Ross Rebagliati, Olympic gold medalist who smoked weed and got in trouble for it, figured people who smoke would really like pipes with his name on them. Coming into his RTO with financials that consisted of t-shirt sales the preceding year that amounted to $8,000 in revenue, he backed into GHIL which had so much stock out that it had done a 750:1 rollback prior, and had so much stock thereafter that the market cap of the company was listed at $250 million in some places.
Rebagliati claimed his weed and pipes would be the Greygoose of cannabis. He also set out to film a reality TV show about his adventures, and offered a ‘win lunch with Ross’ contest.
From June 11 2014, almost every month until January 2015, the company took out $25,000 promissory notes to keep the lights on. That eventually turned into ‘advances from unknown parties’ and the occasional private placement before they just stopped filing.
Where it’s at: In mid-April of 2015, the company put out a news release that bragged, “Overall the Company has been solidifying its brand and has made great progress in the past 12 months,” and said it had ‘earned media’ in the realm of millions of dollars worth of TV coverage which would lead to revenue. It was never heard from again.
OTC says there are 100 million shares out, for a market cap of $20,228.
Worldwide Marijuana (WWM.C): And just like that – poof! – they were gone.
Status: Halted. MIA.
What it does: Well, nothing now. But it was planning to help Canadian growers to navigate the Health Canada licensing system.
Last I wrote about it: I was asking where the hell the CEO was. Canadian naval Commander Bob Marsh was basically the company, but went missing in action (no pun intended) for months, not answering calls, not filing documents, and not keeping up the company transfer agent, which IIROC eventually killed trading of the stock for. I’m not entirely sure if he’s alive or not.
Where it’s at: Other directors tried to right the ship (no pun intended) and take over the deal, but it looks like they’ve failed. I hear there’s been an offer for the shell, so maybe there’s light at the end of the tunnel for those who still hold stock. Either way, if Commander Bob is alive, he has a duty to shareholders to get out of bed and get this company alive again. Like, now, Bob.
Don’t be a dink.
Invest? You’re having a laugh.
Veritas Pharmaceuticals (VRT.C): The long game personified
What it does: “Our mission is to develop the most effective proprietary cannabis strains for specific disease conditions, and to provide doctors and patients with conclusive scientific evidence to recommend and use medical marijuana with confidence.”
Last I wrote about them: Veritas is a site sponsor, so I’ve written about them often, but when last we checked in the issue I was having with the company was a lack of insider investment as one large investor elected to dump his stock. Faced with a ‘we’re going to wait until he’s done, not give him our money in thanks,’ from insiders, it made it tough to suggest that anyone else should jump in either. The stock price has hurt as a result.
Where it’s at: Halfway from where it used to be. If you held through that rough ride, hey, I can’t help you. I did not shield readers from the reality that Veritas was taking some heat, and that said heat may take a while to calm down. I bailed mid-drop, preferring to get back in when the dust had settled, and it appears we may be at that time. Stock has been up and down hard, but seems to be forming a base around $0.30.
From here, you have to know that what Veritas is planning is a long term strategy that, at any point, can be proved out with a news release. You can sit back and wait, and it may well slide again. Or the company may do as it did in August and jump right back up to the $0.48 level on minimal buying.
This is a tough stock to read, but at these prices, I’m tempted to get right back in there.
Invest? The company is doing work that will benefit every single weed company out there once completed, and they believe they’ll be able to take a cut out of everyone’s deal as a result. Look at the stock as a biotech play, one that might drift and drift but you keep it because when the big news comes out, it’ll be too far up to buy back into. That’s my strategy.
Beleave (BE.C): Progressing nicely
Status: Awaiting pre-license inspection
What they do: “At Beleave, we strive to produce the highest quality
medicinal marijuana products on the market.” Translated: We hope to produce those once we get our license, which we haven’t yet, so chill.
Last I wrote about it: I haven’t really covered Beleave, mostly because when I first met these amiable guys, they were early stage with no real movement on their license application. Credit where it’s due, the pushed forward, spent the money, and played it like they expected to win it.
Where it’s at: They’re dealing with Health Canada, who have told them what they need to get shifted in order to get a pre-licensing inspection happening. This is not a guarantee of a license by any stretch, but it’s enough to draw a crowd.
There are side bets in other areas of weed that have no doubt been tossed out to keep the home fires burning while the license moves forward, and there are plenty of website claims of awesomeness that are easily ignored.
“We’ve married our business and financial acumen with the experience of an expert grower to develop a premium, commercially viable product that no other producer on the market can match.” – ‘kay, bud. Let’s take about 20% off ‘er over there, eh?
Invest? Those that have, have basically doubled their money so far, with a big climb in the last few weeks based on the Health Canada news. You know what? With a reasonable $13.6 million market cap, I don’t hate it. There’s still a lot of value here, assuming there isn’t a massive wait between now and that license. I don’t like to buy at the top of a recent spike, but I’ll watch it for a few days and see if things settle.
Abba Medix (ABA.C): Shaken, not stirred
Status: Restructured and looking better for it.
What it is: “A purveyor of fine Canadian medical marijuana, accessories, events, and news.” Except, no license yet, no events, no accessories, not much news.
Last I wrote about it: Abba Medix was a mess. Back in late 2015, they were backing out of a deal to acquire Blow Vapor, which was a bullshit deal intended to distract from long waits for a license, and it also lost out on a deal to take over RedeCan Pharm, which was less bullshitty.
They had said, shortly prior, “With the pending acquisition of RedeCan Pharm and its fully secured, 15,000 square-foot Niagara, Ont. greenhouse, Abba will become one of 17 companies that are active Health Canada-licensed producers and distributors of medical marijuana.” Only, that never happened.
Really, this was a company that had lost its way. It had “received notification from Health Canada that its MMPR license application has advanced to the final review stage, the last step before pre-license inspection,” (the stage Beleave is at right now) as far back as October of 2015, and then it all went to crap.
Where it’s at: CEO Ray Rasouli lost confidence of the board and was moved on recently, and things are starting to shift about in a way that appears confident. The company has raised $6 million to buy Marijuana for Trauma and The Longevity Project, which work with veterans on using cannabis to help with PTSD (a use which is actually covered by insurance). You might recall Organigram (OGI.V) once making a run at this market, before getting tangled in lawsuits with MFT, who claimed OGI ran off with their business plan after the two groups had negotiated a deal
Either way, the play here is to get the PTSD centres, refer patients to a grower (which Abba hopes it will be soon enough), and profit on tasty insurables. While there’s still a long way to go to get there, Abba Medix is closer today than it was five months ago.
Invest? Mmmm.. not yet. Let’s see more Health Canada movement first.
Arcturus Growthstar Technologies (AGS.C) : Marching ever forward
Status: Climbing hard
What it does: “Arcturus provides scalable, indoor CEA systems that utilize minimal land, water and energy regardless of climate, location or time of year and are customized to grow an abundance of crops close to consumers, therefore minimizing food miles and its impact to the environment.” Translated: Vertical farming, with an LED lighting sideline
Last I wrote about it: Only a week ago, I was crowing that it had jumped markedly, basically a double in the last few weeks. Arcturus is in the early stages of permitting US urban vertical farms to grow leafy greens in areas that have poor food security, with the assistance of government incentive programs that encourage such ventures. Using TerraSphere grow tech and lights they’ve developed, they aim to keep things low cost and high return.
Where it’s at: The company just signed off on the purchase of a handful of revenue generating apps in the weed space, to compliment its renewed focus on using its grow tech and lights to help licensed weed growers improve yield. The stock price is positively humming.
Invest? I did, and continue to add. This thing shows no signs of slumping, and is quickly eating through outstanding warrants, which is the only downward pressure on the stock price right now.
Nutritional High (EAT.C): I love it when a plan comes together
Status: Killing it
What it does: “Focused on developing, acquiring and designing products and brands in the marijuana-infused edible products and oil extracts sectors for medical and adult recreational use.”
Last I wrote about it: I hadn’t really covered the stock for over a year while it was hunkered down, building out its edibles production facility, but came back in last week when it became clear the stock was moving. It has moved a lot since.
Where it’s at: Last week it moved from $0.04 to $0.07. This week it’s moved to $0.13. Why? Because that Colorado-based facility isn’t just preparing to produce hash cookies, it will be extracting oils starting this month, and is working on how to best make use of their Jimi Hendrix licensing agreement going forward.
Invest? If you missed the triple last week, there’s no reason to think there won’t be more upward moves in the week ahead. Careful of profit-taking slips, but I like that anyone I helped get into this stock back in the day, before the ‘no news’ drift, is now whole and moving on up.
Golden Leaf Holdings (GLH.C): Are they finally through the short seller blitz?
Status: Climbing consistently, which is a nice change
What it does: “The Company prides itself on supplying patients with high quality medical marijuana, and is committed to becoming the leading consumer-driven brand, delivering an array of superior products addressing all consumer needs, in both medical and adult use markets.” Translated: Oils.
Last I wrote about it: I’ve written about this company so many times since it showed up on the scene, and a lot of that time has been frustrating. For a company that quickly made a heck of a lot of revenue, and seemed only to be hemmed in by the bottleneck of being able to acquire new extraction machines, some dud moves on the market turned this little nugget of cash creation into a freefalling conundrum. Management blew through too much money, missed financials (both in terms of hitting their numbers and actually filing them by the deadline), local legislators accidentally made their industry illegal for a spell, but mostly what’s hurt GLH has been a concerted and ongoing campaign of stock manipulation that has cast it as a bumbling fool factory, rather than a cannabis oil extraction business.
Where it’s at: I hesitate to suggest the worst is over, because it’s seemed that way so many times in the past, but I think maybe the worst is over. To get to the greener pastures, the company is taking on some debenture debt at 10% interest, which isn’t happy times, and it has lowered the conversion price of its existing $9m in debt to keep earlier investors happy. That amounts to a potential dilution down the line that won’t be pretty – BUT – it will also bring in $8 million right now that will clean the books, pay for needed growth, get Washington State moving alongside the existing Oregon business, and renew the companys branding focus which, I think, will be money well spent when more states open up and branding really matters.
Invest? Gun-shy, but it’s come back from $0.25 to $0.43 in recent weeks, so fortune favours the brave. I managed to average down to $0.35 over the last month, so I like where things are moving. Cautiously optimistic.
Vodis Pharmaceuticals (VP.C): Bouncing along the bottom, looking for a spring
Status: Blasting off, but why?
What they do: “Vodis is one of North Americas foremost brand names in the medical and recreational marijuana business with operations in both the US and Canada.” Translated: None of that is true.
Last I wrote about it: The company had finalized its leaseback arrangement with a Bellingham-based grower, paying for their facility to be built out in return for rent and consulting fees that maybe, probably, likely would end up being similar in amount to 90% of sales. There was some early activity and some money in the door, but Vodis had a big problem – it’s then CEO, who was not so much a loose cannon as a loud cannon, aimed the wrong way.
Where it’s at: That CEO was let go, replaced with another who lasted two months. Now, Ivan Millovski, then COO and director and founder, is also the CEO. Which is probably for the best, as the company owes him stacks of doughbucks, and a lot more now that he and others have financed the company’s debt repayment with debentures earning 8% per year.
No sign of any more sales, though. It’s been nine months..
Invest? Well, the stock is definitely jumping, but should it be? A look through the last few news releases shows a lot of debt settling and some stock options handed out, but no actual business being done. Is the tenant still growing? Did they run out of cash and crash that deal? Don’t be fooled by the jumping share price, something’s not well in V-town, especially at the current valuation.
Endexx Corporation (EDXC): The little battlers
Status: It exists.
What it does: “Endexx, with its collaborative partners and consultants, develops and distributes consumable product lines derived from industrial hemp that is GMO and pesticides free and naturally rich in phytocannabinoids. The company has two technology products and services that launched in 2014 — the M3hub cannabis management software, and Autospense dispensing machines.”
Last I wrote about it: It was a long time ago, and Endexx was coming at the weed industry with two products. One being grow management software, which is a competitive business that others were leading, and the other being dispensing machines for dispensaries, which isn’t a terrible idea, only you need an employee to supervise them.
Where it’s at: Since then, the company has added a couple of hemp-based product lines, including a pet chews deal, but the company suffers, as it always has, from a case of doing too much with too little. True Leaf is doing pet chews, and it’s all they’re doing, so they’re killing it. Others do seed to sale management software, but it’s all they do, so they’re able to do well.
Endexx? It’s making $42k in revenue for the last quarter, which is down from $59k the year before. It’s a cottage industry. Or, rather, three cottage industries. Maybe four.
Invest? Nope. This one has never been a good investment opportunity, and that ain’t changing.
Calyx BioVentures (CYX.V): The mystery triple
Status: Constant, daily stock rampage, but nobody knows why
What it does: “Cannigistics’ Application Management Service and tools bring efficiency, control, and optics to any business. Our framework and services allow any businesses to become more agile and efficient by providing access to all key applications in a single simple view.” Translated: Software that gets all your other software talking to each other.
Last I wrote about it: Calyx used to be a green energy play, turning carinata seed oil into jet fuel. But they were in business with Business Development Canada, which means everything went tits up, so then it retooled as a cannabis software outfit, but its first client was Vodis and… well… So they’ve been retooling again, announcing they’d turned the software industry agnostic, and it was being used by a commercial real estate developer.
Where it’s at: All of the above managed to turn the thing into a $0.015 stock for most of the last year. CEO Roger Forde avoided rolling it back, instead choosing to tell investors to stay the course because something bigger was coming.
That something is sounding like it’ll emerge in the next week or two. I know it’s software based. I know it’s probably not weed-related, but maybe still applies. I don’t know. I only know the stock has gone from $0.015 to $0.06 in a week. Something’s up.
Invest? I haven’t. I wish I had, but this jump is so strange it’s tough to ride.
Creative Edge Nutrition (FITX): The scammiest shit circus the weed industry has ever produced
Status: Dumpster fire
What it does: Promises to build the world’s largest marijuana grow, without permits, a license, water, town support, and manages to lie about the minister responsible, leading to it being discussed in Parliament, denied a license, and then demoted to the grey sheets.Last I wrote about it: The CEO was in hiding, threatening Health Canada with lawsuits, and shady insiders were burning through as much paper as they could before the whole thing came undone. I wrote about this company repeatedly, with my reporting being caught on to by journalists at the Toronto Star, Globe and Mail, and National Post. The CEO was faking signatures, telling people to hold while he was pumping out personal stock, there were press releases from staff that didn’t exist.. literally, this was a shit show.
Where it’s at: After promising to take the world by storm with an energy drink, once its fake weed grow got shut down, it’s recently reemerged in new form, with the same dark scammers. Such is the penny stock world.
Invest? Just take $500, set it on fire, pee on it, throw bricks at your own head, and roll about in the muck for a few days. Same experience.
Invictus MD Strategies (IMH.C): A mess, but an undervalued mess
Status: A mathematical anomaly
What it does: “Invictus MD works in partnership with management teams to increase shareholder value through business planning and process integration, developing and executing growth strategies, leveraging our experience and relationships, and structuring and deploying the proper capital to support long-term growth.”
Last I wrote about it: Invictus snapped up a bunch of weed-related properties in fast time, for not a lot of money, and set about fine-tuning them ll. That sounded like a good arrangement initially.
But only one of those verticals appeared money-worthy, so the others got killed, shipped, ignored, eaten by fire ants. That one that appeared profitable, however, Future Harvest, a hydroponics supply store out of Alberta, had some potential.
Where it’s at: IMH has slowly bought up almost all of Future Harvest, then sold off its Sunblaster product line for over $4 million. The market cap of IMH currently? $2.4 million. Arbitrage time.
Invest? Look, everything weed related is flying right now, except IMH. I’d keep it as a back pocket thing, if you can’t find other horses to ride. There’s going to be an event at some point that re-calibrates this company’s share price, I just don’t know why it hasn’t happened yet.
Lexaria (LXX.C): If you think Jamaicans are about to be licensed to sell in the USA.. sure
Status: Absolute bullshit level achieved – LEVEL UP
What it does: “Lexaria Bioscience Corp. is a food sciences company focused on the delivery of active compounds that can behave as superfoods through its proprietary infusion technologies. Lexaria’s technology enables higher bioavailability rates for CBD; THC; NSAIDs; nicotine and other molecules than is possible without lipophilic enhancement technology.” Translated: We don’t know what a comma is.
Last I wrote about it: I highlighted the inherent stupidity in putting out a news release, even as a ‘back door, nobody’s going to pay much attention to it’ kind of thing, that crows about a deal that will make you revenue if and when a Jamaican company is given permission to sell marijuana-related products in the US and Canada. Because that’s not going to happen before 2030. It’s less likely to happen than me being selected Miss Universe in 2017. And I look crap in a swimsuit.
Where they’re at: Far from slinking back into the shadows to think about other ways to write better bullshit news releases, Lexaria has doubled down, putting out a bigger news release about this non-deal that will not bring them any money, with a company that barely exists and is staffed by guys who I’m sure are working the swim-up bar at Sandals when they’re not pretending to be executives of a weed company.
Says Lexaria, “[The] Timeless business network that spans three countries can deliver meaningful value to its stakeholders. Timeless Herbal Care Limited is an international nutraceutical research and development company focused on high quality, pharmaceutical grade, medical marijuana products.”
Says Timeless, “Guinea Hen Weed Formula is a tonic and restorative pharmaceutical drug made from a blend of fruit wine and Guinea Hen Weed herb. Timeless continues to advance our research and development of guinea hen weed leading to clinical trials.”
Coming soon to a 7/11 near you.
Naturally Splendid (NSP.V): Does everything right, gets no respect
Status: Treading water
What it does: “Naturally Splendid Enterprises Ltd is a multifaceted bio-tech company. The Company provides food supplements packaged for distribution through grocery stores, health and nutrition stores, and other outlets where consumers purchase health-related products.”
Last I wrote about it: I’ve written about NSP for so long, it seems like we’re childhood friends. Once one of my ‘top 5’ weed-related plays (though definitely more hemp focused than weed focused), Naturally Splendid has achieved everything it promised, but the share price never stays up for long, which I boil down to struggles in getting their story out.
NSP owns a biomanufacture facility to create theirs and other company’s formulas for the hemp omega protein powders (sold in stores under the Natera brand), it sells formulated product to other companies (Laguna Blends, etc), it’s selling literally tonnes of hemp product to South Korea, where the stuff flies off shelves and through home shopping channels, and it has a pet treat line, an ecommerce deal.. it’s cray.
Where it’s at: Exactly where execs said they would be, way back when. They’ve delivered on every milestone, they’re making revenue, adding to their production capabilities, and proving their science. Yet, market forces keep beating down their stock, to the point where investors now expect that beatdown, which becomes a self fulfilling prophecy.
And yet, the money is jacking up. In December 2015 financials, revenue was shown as $0. The following quarter: $1 million. The most recent quarter? $4 million, with $2 million in gross profit and $1 million in EBITDA.
But hey, sure, let’s keep the share price at the level it was at two years ago, when all the company had was a hemp protein powder and a loose association to cannabis.
Invest? IMO, you’re mad if you don’t. Time for this one to run, and based on fundamentals more than sector wash.
— Chris Parry
FULL DISCLOSURE: I own some of these stocks, and am currently a consultant for Veritas Pharma. Please see the EquityGuru equity disclosure statement for current holdings and conflicts. No company has paid for inclusion in this piece.
I knew I’d missed someone:
New Age Farms (NF.C): Hey, remember us?
What they do: “We offer unique turnkey growing infrastructure and services for licensed growers and processors of luxury crops at our green campuses in Washington State and British Columbia.”
Last I wrote about it: This company was a stutter-starter back in early 2015. They’d planned to get an MMPR approval but that wasn’t looking so hot, so they switched gears and said they’d grow leafy greens in their growhouse instead, which had similar margins as weed. Then they decided they’d do the Washington State leaseback plan, where you finance a local licensed grower’s build-out, put their facility together, train their people, and then take your piece in rent and consulting fees which, miraculously, will end up being close to 90% of sales.
Then their money dried up. Then they stopped responding to emails. Then they disappeared for a bit. There may have been a Venezuelan arms deal and a kidnapping on a luxury cruise vessel off the Azores, I don’t know. Pretty sure they had to break out of a Turkish prison with shanks and guns made of toothbrushes, and smoke bombs were almost definitely deployed. But that’s all conjecture and gossip.
Where they’re at: Miraculously, this group appears to have got their shit together and actually built out some properties, with four licensees having agreed to take their spaces. Latest news releases report advancements in getting local approvals to grow, and deals in place that indicate they’re further along than the usual ‘we’ll get it going eventually, maybe’ you sometimes see in the Canada-to-Washington space.
If you’d asked me what I think of New Age Farms a year ago, I’d have used words that rhyme with ‘schmuckleheads’ and rolled my eyes pretty hard. Today? I can’t argue with their 137.5% jump today, nor the fact that they’ve got the ball rolling on actual business.
Invest? Man, I don’t know. I’d like to see some projections on those licensees and their expected sales, but the current $2.5 million market cap is LOW in this market. Use your spider sense.