July 16th Cannabis Daily Recap
The day had a substantial amount of news releases and even 3 companies were halted pending news, which normally in this sector creates buzz and a lot of volume, unfortunately, today didn’t follow that trend. With lack of volume the sector is continuing to experience 52 week lows. The Marijuana ETF TSX: HMMJ experienced almost a 5% drop in share price and Canopy Crop (TSX: WEED) fell more than 4% which shows there is a lack of new money coming in the sector.
Aurora Cannabis Inc (TSX: ACB) who is continuing to push hard to be one of the top licenced producers had 2 news releases. First Aurora announced today that it has reached an agreement with Shopify Inc., where Shopify would revamp Aurora’s current e-commerce platform for their current medical and future global recreational cannabis distribution. Definitely working with a Goliath like Shopify who clearly has a working system, will give Aurora an advantage in online sales versus other LPs that have an outdated e-commerce platform. Second High Hampton (CSE: HC) has engaged with globally leading hybrid greenhouse engineering and design consultancy Aurora Larssen Projects Inc. (“ALPS”), a wholly owned subsidiary of Aurora, for the design of its cannabis cultivation facility at CoachellaGro, near Palm Springs, California. This will definitely benefit both Companies, as per High Hampton’s Ceo David Argudo “By engaging and integrating the work of ALPS with Infrastructure Engineers Ltd and general contractor Vertical Construction Inc. we will be able to finetune our design plans ensuring the construction of highly-efficient cultivation facilities, resulting in high-quality, low-cost production.” As for Aurora subsidiary being hired by High Hampton it adds another client to their portfolio and gives a higher probability of Larssen being designer of choice for future Canadian and American greenhouses. For current and future Aurora investors, Acb has 3 supply agreements one in Quebec, Alberta and now BC. For those not familiar with Aurora here is an intercorporate relationship diagram, it was recently shared on Twitter by MMJinvesting and it truly re-assures investors why ACB currently has over 4.5billion dollar market cap.
Gtec Holdings (TSXV: GTEC) which started the morning halted received their Dealers Licence. Gtec who has over 23million sq feet of expansion capacity and 7 potential facilities (6 for cultivating cannabis + Zen lab), only took 17 days after Health Canada’s inspection to get their licence. With this news Gtec is definitely heading in the right direction, they now have a cultivation licence and a dealers licence, which shows investors that their management team have the experience to eventually become one of the biggest licenced producers in the country.
Namaste Technologies (TSXV: N) who gave notice to the TSX Venture of the share buyback on Friday was approved this morning. A total 25,308,136 common shares will be repurchased for cancellation from its own capital through the facilities of the TSX Venture Exchange. Namaste also announced that CEO Sean Dollinger will be presenting at GritCAMP’s upcoming cannabis and crypto conference on July 25th-27th, 2018. Hopefully, this exposure will bring in new shareholders to push through recent resistance.
The last news release we will take a look is from C21 Investments Inc (CSE: CXXI) this is a fairly new company trading on the CSE, but it just announced one of the largest investment transactions into the USA cannabis industry by any Canadian public company to date. The acquisition and investment of expansion capital into Silver State Relief LLC and Silver State Cultivation LLC which will cost them 50million dollars USD in assets(part of which will be shares at 3.50$), they will get in return 155k sq feet facility with 8k sq feet dispensary. The company that they are acquiring had $28.5 million dollars of revenue in the last 12 month. If we take a look at how much Canopy spent to purchase HIKU and how much Aurora spent to buy CMED and plan to buy Medreleaf, this looks like a good investment. CXXI share price reacted well to the news and clearly, investors understand the magnitude of this deal and finished at 2.30$ Cad. The only thing we would caution investors is on July 27th they have 1$ convertible debentures that will be free trading which may cause selling pressure. As per the CXXI news release they have approximitely 10m to continue making deals.