RYG DAILY RECAP GTEC EDITION
With Bill C-45 receiving Royal Assent today, the cannabis sector experienced another day of gains and high volume. Both the Marijuana Index and Hmmj broke key resistance levels and finally seeing new support. There was also a lot of global expansion news today in the sector which is amazing for shareholder value. Tomorrow we’ll hope that the gains continue and we will have GTEC Holdings (GTEC) start trading on the TSX Venture.
Five reasons why we like Gtec:
1. Management: Definitely is one of the most important pieces for a strong company. GTEC’s management covers every aspect that you will need for a good team to lead a future industry leader. Just in their CEO-founder Norton Singhavon and Co-Founder and Vice President Michael Blady, the duo both helped start Invictus MD (TSXV: GENE) and worked with and are still working with a few other late stage applicants/ companies in the cannabis sector. Their previous and current experience definitely gives them the upper hand when dealing with Health Canada and overall making deals in the sector. They also already have a Chief Science Officer, Director of Plant Sciences, and Director of Security which some companies with higher market caps don’t even have.
2. Share Structure: One of the advantages of doing raises when you are a private company, is you somewhat have the possibility of controlling your share structure. Unlike some recent companies like HUGE and MMEN who decided to have an extremely high amount of outstanding shares and who over-evaluated their company, Gtec kept it conservative and fully diluted will have 107,750,711 shares. At this stage in the sector 107 million shares is fairly low, and if they can keep their share price over 1$ any future raise will not really hurt their float.
3. Going BIG + 100% owned: Right out of the gates Gtec will have 5 late stage applicants, also 1 facility trying to get their dealers licence, and were 1 of the 51 to get their retail cannabis permits in the province of Saskatchewan. Not only is this impressive, but their facilities which will be 100% owned could reach over 23 million sq feet of expansion capabilities and by 2020 could potentially be 50,000 kilos per year in production capacity. Those numbers are definitely worthy of being an industry leader.
4. Vertical Integration: They recently were selected to apply for a cannabis retail permit which brings them one step closer to be a fully vertically integrated company. This means they will own every aspect of their supply chain, they will sell cannabis grown from their facilities, they will be able to test/extract their own product, package and then sell online and in their own dispensaries once approved. This definitely will help keep profit margins higher and allowing them to be one of the lowest cost producers if fully integrated.
5. Doventi Capital/Insiders: Doventi Capital Inc. is a private equity firm specializing in investments in legal cannabis industry in the North America. It invests in the early stage companies, and Norton(CEO of GTEC) currently serves as the Founder and Executive Chairman of Doventi Capital G.P. and Doventi Capital Fund II L.P. With Gtec partnering up with Doventi, this means that Gtec should not have a problem finding funds to fill any future private placements and with Doventi investing in Gtec most of the shares will be locked in by insiders that will definitely work hard to make sure the share price increases. As per Gtec investors’ presentation management has invested over $6 million of their own capital into current assets and Doventi Capital / GTEC management, directors, advisors and employees have invested $8.0 million of the $16.24 million raised in seed financing, so a lot of the float is insider owned.
Top news of the day:
1. High Hampton (CSE: HC) +2.88% HIGH HAMPTON ACQUIRES CANNABIS DISTRIBUTION HUB IN THE CITY OF CUDAHY THROUGH 420 REALTY, LLC this is definitely long-awaited news, And we think Christian says it best:
Christian Scovenna, High Hampton’s Sr. VP Corporate Finance, commented:“This transaction further expands High Hampton’s strategic cannabis distributionnetwork in California and will ultimately allow us to bring more products and qualitybrands online as we advance this and our other assets. With the previously announcedacquisitions of CaliGold (see press release April 18, 2018) and Bravo Distro (see pressrelease May 2, 2018) expected to close soon, High Hampton will be well positioned withdistribution hubs, product and cultivation opportunities across California.”
2. Lgc capital (CVE: LG) +48.00% Jamaican Medical Cannabis Company, Global Canna Labs, Receives Cultivator’s License from Jamaican Authorities over the past couple months, with their Africa deal not going through, LG’s share price definitely felt like it hit rock bottom, but with their Jamaican deal looking pretty solid it looks like investors have now regained a bit of trust. Unfortunately, LG had done too many private placements with low share prices in a short amount of time so the selling pressure might still be there. Let’s hope we get more news soon
3. Aphria/Bliss/and Beleave all had news on the global level, BE decided to expand to Colombia, Bliss signed Letter of Intent to sell 720 kilos of dried cannabis flower to a German biomedical and distribution company, and Aph’s Malta-based subsidiary, ASG Pharma, receives first import license for cannabis issued by the Malta Medicines Authority. All three nrs shows a key example that these companies need to not only focus in Canada but take advantage globally, to make sure Canadian Companies are leaders in the Cannabis sector.
Here are the top gainers of the day:
|1||CVE:LG||LGC Capital Inc||0.190||0.060||48.00%||11,423,807.00|
|2||BLO||Cannabix Technologies Inc.||2.200||0.410||22.91%||4,066,225.00|
|3||CNSX:HUGE||FSD Pharma Inc||0.180||0.030||20.00%||53,065,142.00|
|4||CNSX:HIKU||Hiku Brands Company Ltd||1.570||0.260||19.85%||1,961,514.00|
|6||CVE:XLY||AUXLY CANNABIS GROUP INC||1.330||0.200||17.70%||7,599,952.00|
|7||KBB||Kaneh Bosm Biot||0.600||0.090||17.65%||166,125.00|
|8||SCU||The Second Cup Ltd||3.200||0.450||16.36%||503,275.00|
|9||CVE:CYX||Calyx Bio-Ventures, Inc.||0.080||0.010||15.38%||360,741.00|
|10||TSE:IN||InMed Pharmaceuticals, Inc.||0.880||0.100||12.82%||1,295,251.00|
|12||CNSX:EASY||SpeakEasy Cannabis Club Ltd||1.040||0.100||10.64%||342,425.00|
Definitely LG investors loved their news today. BLO went up because bill C-46 also passed which will concentrate on impaired driving which is what BLO is specializing in cannabis breathalizers. HIKU and WMD which will hopefully hopefully be merging soon had a strong day, and Second Cup had another strong day today.
|1||CNSX:HUGE||FSD Pharma Inc||0.180||0.030||20.00%||53,065,142.00|
|2||TSE:ACB||AURORA CANNABIS INC||10.470||0.480||4.80%||22,472,824.00|
|3||WEED||Canopy Growth Corporation||47.760||2.400||5.29%||12,579,748.00|
|4||CVE:LG||LGC Capital Inc||0.190||0.060||48.00%||11,423,807.00|
|6||CVE:XLY||AUXLY CANNABIS GROUP INC||1.330||0.200||17.70%||7,599,952.00|
|7||CVE:KALY||Kalytera Therapeutics Inc.||0.190||0.000||2.78%||6,863,096.00|
|9||BLO||Cannabix Technologies Inc.||2.200||0.410||22.91%||4,066,225.00|
|10||TSE:NEPT||Neptune Technologies & Bioressources Inc||4.960||-0.980||-16.50%||3,936,057.00|
If the volume stays we might start seeing the start of a bull run. There are a few investors that are suggesting to wait a couple more days to see if the sector consolidates after this weeks high.
Now tomorrow is licence Friday lets hope we see a good day for GTEC and get a few licences. Lastly, if you think that the sector is done expanding there are a few private companies that will become public and also I’m sure more companies from other sectors will be jumping on the cannabis train.
Once again this is not a buy or sell recommendation and for full disclaimer please view here