Watchlist Week of September 24th, 2018
The month of September is seeing gains and share price volatility, that is reminding us of the December-January run. International Cannabrands Inc (CNSX:JUJU), FSD Pharma Inc (CNSX:HUGE), and KOIOS BEVERAGE (CNSX:KBEV) have seen over 200% gains month to date, and are leading the way to what is an exciting path to legalization. This week we’ve seen 84 companies finish green and 72 companies saw their share price decline. With more than half of the sector up, the cannabis sector had an average increase in share price of 5.33%, which is more interest than most savings accounts accrue yearly.
The beginning of the week, Tilray (TLRY) experienced an unexplainable increase in share price and rumours of Coca-Cola partnering up with a large-cap company, created a volume frenzy which significantly increased market capitalizations for some. By mid-week, Tilray had reached over 300$ and started to receive global media attention. Even the popular American radio stations were talking about how its time to invest in the Canadian Cannabis Market. Every second word they said was Tilray, and the main theme was “Finding the Next Tilray”. Unfortunately not even 24 hours later that “bubble popped”. What is now known as the “Tilray effect”, caused a significant drop in market capitalization in the large-cap companies. As profits were being taken, money finally started rolling into the nano and micro-cap companies. As Tilray lost more than half of its market cap, close to 20 under 1$ companies saw their share price increase by over 20%. Crop Infrastructure Corp (CNSX:CROP), Aurora Health Inc (CNSX:BUZZ), Tree of Knowledge (CNSX:TOKI), and Trueclaim Exploration (CVE:TRM) increased over 25% in share price on Friday. The quick significant increase definitely left some investors feeling disappointed that they “sold to early” or “didn’t buy enough shares!”.
Australis Capital Inc (CNSX:AUSA), Canopy Rivers Inc (CVE:RIV), North Bud Farms Inc (CNSX:NBUD), started trading this week which added to the rollercoaster of volatility. All three companies have few similarities. Both Australis and Canopy Rivers are used as separate entities, by Aurora Cannabis and Canopy Growth, to acquire American assets. Once cannabis is federally legal in the United States, Aurora will acquire Australis and Canopy will acquire Rivers with the approval of the TSX, adding significant shareholder value. This strategy has been used by Aphria creating Liberty Health Sciences (CNSX:LHS) and Cronos’ CEO Paul Rosen creating Tidal Royalty Corp (CNSX:RLTY.U), where their main focus is to acquire US assets. North Bud recently acquired Tetra Bio-Pharma’s Canadian late stage applicant to cultivate recreational marijuana, in return TBP received around 41% of NBUD’s outstanding share. Tetra has since spun-out those shares to their shareholders, just like Aurora shareholders received free Australis shares.
With less than a month until Canada’s Legalization of Recreational Marijuana and investor portfolios finally recovering from the winter months, it is now time to build your watchlist, consequently, once you take profits from a company you feel has reached its full potential, you can easily add new money making opportunities to your portfolio. The much anticipated quarterly financials of Aurora are being released next week (which are supposed to include Medreleaf’s and Cannimed’s revenue) and Namaste Technologies finally receiving their license to sell, we expect another monumental week. Here are 10 companies to add to your watchlist this week
1) Aurora Cannabis (TSE:ACB): Their financials will be released, and if significantly higher than Canopy’s we will see a significant increase in volume. Canopy announced their new Constellation deal after they announced their financials, hopefully, Aurora will copy this trend. Lastly, October will also be a historical month for Aurora, with a potential Nasdaq uplisting, expect an increase in momentum
2) Namaste Technologies (CVE:N): with their newly approved and one of a kind license to sell, and the Canadian government changing regulations in their favour, look for a slew of news this week which will continue the Namaste mania. Yes, Namaste hasn’t had the best start to the month, but with the approval of this license, we can now say that management has delivered and shareholders can now regain confidence.
3) Khiron Life Science (CVE:KHRN): a recent Canaccord analysis gave Khiron a $3.00 target price. Led by an experienced management team and recently closed a private placement, up 11% on Friday we’ll definitely keep an eye on Khiron to see if the uptrend continues
4) Benchmark Botanics Inc (CNSX:BBT): with a 12k sq. ft facility fully licensed, Benchmark has currently the 5th lowest market cap amongst the companies with a license to sell. They recently closed a private placement with $0.75 shares. Currently trading under 60 cents, it seems like the shares are discounted
5) Speakeasy Cannabis (CNSX:EASY): with approximately 40m outstanding shares and over 120 years of growing experience, we’ve seen Easy boast huge gains this summer, but unfortunately seeing the share price go back down. Easy currently has a 10k sq. ft facility awaiting license to cultivate and currently building an 80k sq. ft extension. In the future Easy hopes to have a 2.6m sq feet facility and export to Germany, Latin American, and Israel. Their last two raises were 70 cents shares.
6) Mpx Bioceutical Corp (CNSX:MPX): Mpx recently released an impressive quarterly financials, with 14m$ revenue. Currently 6th overall in the quarterly revenue category, ahead of Tilray and behind GTII (which are both billion dollar companies) and 11th least overvalued company based on revenue/market cap, MPX looks like its just getting started and has more to deliver. They currently have a license to cultivate and should receive their license to sell shortly, all while trying to expand their American operations into California, the largest cannabis market. Once these two catalysts materializes expect a huge increase in market capitalization. At a 1 billion dollar market cap and their current number of outstanding shares, that would be approximately $2.60 a share.
7) Canada House Wellness Group (CNSX:CHV): With a current market cap of $23m, they are the least valued company compared to any licensed producer, and has a 20m$ spread behind the 2nd lowest market cap company. Chv with its 3 subsidiaries is one of the few cultivation only companies bringing in revenues and is the 10th least overvalued company in the sector making it for an attractive company to add on your watch list.
8) Crop Infrastructure Corp (CNSX:CROP): Crop’s long-term investors saw an increase in share price of 61% this week alone and over 100% month to date. With bullish volume and uptrend momentum, this workhorse has investors feeling confident that management is doing the right moves to increase shareholder value. Crop has definitely caught the eye of new investors with their weekly news releases that range from global expansions and brand acquisitions. With crops currently growing and getting positive test results, long-term shareholders are eager to see revenues pouring in, which would be the last hurdle needed to make the chart go parabolic.
9) TIDAL ROYALTY ORD (CNSX:RLTY.U): With one of the most experienced management teams led by Ceo Paul Rosen (also Ceo of Cronos Group which has almost a $3 billion market cap), Tidal seems fairly undervalued. Tidal’s current decline in share price was caused by a halt issued on their US trading symbol. The halt was issued because the shell company used to go public did not file their financials correctly. Which in turn is an error caused by the shell company and not Tidal themselves. Management is working hard to rectify this issue, they have a few pending deals lined up and their last raise was over 30 cents. Tidal is definitely one to keep on your watchlist if the share price continues to go down, we know that once the halt gets removed news will follow and Tidal will regain shareholder confidence.
10) Alliance Growers Crop (CNSX:ACG): With their 4 pillar strategy, deals in BC, Ontario, and Quebec, and an attractive share price, it’s only a matter of time before we see positive momentum. As the years go by the trends usually repeat, the large-caps run and then once investors feel that some companies are overvalued, there are profits that are then invested in the under 50cent companies. ACG is currently completing a private placement, which they will use the funds to start some of their projects. With important milestones that will be completed within the next year and a market cap of $12m, it wont take much to increase share prices.
Please add in the comments which Companies you will add to your watchlist and why and we will gather the data and share on our FB page
Week of September 17th Percentage Gains
Disclaimer: These are not buy or sell recommendation, we are also not financial advisors, the market can be very volatile and without proper research, you can lose a lot of money. No compensation was given to write this article, here at RYG we are invested in multiple companies in the sector.