The Story Turns Back to Pot Stocks (GRWG, CRON, MEDIF, NUGS)
The green machine is back. And we would expect the usual election hype to get started again ASAP. We are now closing in on the next moment when some percentage of the population will be focused more on whether or not their particular state is about to offer legal pot than on who’s the next president.
And that percentage is worth a mint to the industry and to investors who get in for the run into the election. In addition, this time around is super spicy because the polling numbers slant heavily in Biden’s favor and the Biden-Sanders “unity task force” put together a lengthy document of policy recommendations across a wide array of issues that is highly instructive on the pot stock election hype factor.
For example, among the issues that the task force considered was recreational cannabis legalization, calling for the decriminalization of marijuana using executive action. The task force also expressed support for the federal legalization of medical marijuana.
So, get your engines started folks. With that in mind, here’s a selection of some of the most active names in the space, including: GrowGeneration Corp (OTCMKTS:GRWG), Cronos Group Inc (NASDAQ:CRON), and Medipharm Labs Corp (OTCMKTS:MEDIF), and Cannabis Strategic Ventures (OTCMKTS:NUGS).
GrowGeneration Corp (OTCMKTS:GRWG) trumpets itself as a company that, through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. Currently, GrowGen has 27 stores, which include 5 locations in Colorado, 5 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida.
GrowGen also operates an online superstore for cultivators, located at https://growgen.pro/. GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers.
GrowGeneration Corp (OTCMKTS:GRWG) just announced the pricing of an underwritten public offering of 7,500,000 shares of its common stock at an offering price of $5.60 per share. GrowGen expects the gross proceeds from the Offering to be approximately $42.0 million, before deducting the underwriting discount and other estimated offering expenses.
The Offering was upsized from the previously announced offering size of $35.0 million of common stock. GrowGen has also granted the underwriters a 30-day option to purchase up to an additional 1,125,000 shares of common stock offered in the public market. The Company expects to close the Offering on or about July 2, 2020, subject to the satisfaction of customary closing conditions.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. GRWG shares have been moving higher over the past week overall, pushing about 7% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 10% in that time on strong overall action.
GrowGeneration Corp (OTCMKTS:GRWG) pulled in sales of $33M in its last reported quarterly financials, representing top line growth of 152%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($11.4M against $17.3M, respectively).
Cronos Group Inc (NASDAQ:CRON) casts itself as an investment firm in the biopharmaceutical space, with a strong emphasis on medical marijuana and cannabis-related research and products. In short, the company seeks to invest in other companies, either licensed or actively seeking a license, to produce medical marijuana pursuant to Canada’s Marijuana for Medical Purposes Regulations (MMPR).
The firm typically invests in companies based in Canada. The firm is primarily an equity investor, may also advance debt as appropriate. It seeks to make minority investments with appropriate governance and shareholder rights. The firm seeks board representation consistent with the size of the investment but does not need control.
Cronos Group Inc (NASDAQ:CRON) just announced that the shareholders have approved a special resolution authorizing the Company to make an application for the continuance of the Company from the laws of the Province of Ontario to the laws of the Province of British Columbia, as further described in the Proxy Statement.
The Company believes the greater flexibility afforded by the British Columbia corporate statute by virtue of the absence of a Canadian residency requirement for members of the board of directors of the Company will allow the Company to consider Board candidates from a larger pool of candidates to ensure the Board maintains the right composition, skills, expertise and diversity to drive long-term value. The completion of the Continuance remains subject to the satisfaction of the conditions described in the Proxy Statement.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CRON shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -5% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. CRON shares have been relatively flat over the past month of action, with very little net movement during that period.
Cronos Group Inc (NASDAQ:CRON) generated sales of $11.3M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 17.6% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.9B against $286.8M).
Medipharm Labs Corp (OTCMKTS:MEDIF) bills itself as a company that primarily focuses on producing pharma-grade cannabis oil and concentrates in Canada. It also focuses on providing cannabis contract processing services to licensed producers and growers; supplying cannabis oil to companies for sale under its brand; and supplying raw materials and processing for the creation of ready-to-sell cannabis products. The company was founded in 2015 and is headquartered in Barrie, Canada.
This expert focus on cannabis concentrates from our cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory, allows MediPharm Labs to produce purified, pharmaceutical-grade cannabis oil and concentrates for advanced derivative products. MediPharm Labs has invested in an expert, research-driven team, state-of-the-art technology, downstream extraction methodologies and purpose-built facilities to deliver pure, safe and precisely-dosed cannabis products to patients and consumers. MediPharm Labs’ private label program is a high margin business for the company, whereby it opportunistically procures dry cannabis flower and trim from its numerous product supply partners, to produce proprietary cannabis oil concentrate products for resale globally on a private label basis.
Medipharm Labs Corp (OTCMKTS:MEDIF) just announced that it has appointed James (Jim) Maloney as Chief Financial Officer, effective July 20, 2020.
In his role, Mr. Maloney will be responsible for leading the finance function including all aspects of financial planning and analysis, setting Medifast’s financial and capital allocation strategies, and managing investor relations. He will serve as a member of the company’s leadership team and report directly to Chief Executive Officer Dan Chard.
The stock has suffered a bit of late, with shares of MEDIF taking a hit in recent action, down about -7% over the past week.
Medipharm Labs Corp (OTCMKTS:MEDIF) generated sales of $11.1M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -65.8% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($21.4M against $25.1M, respectively).
Cannabis Strategic Ventures (OTCMKTS:NUGS) bills itself as one of the largest publicly traded marijuana cultivators in the United States. The Company is Los Angeles-based and incubates, develops, and partners with category leaders within the cannabis and ancillary sectors.
The Firm’s NUGS brand experience provides operational and financial strategic partnerships and a range of essential services to emerging and existing Cannabis consumer brands.
Cannabis Strategic Ventures (OTCMKTS:NUGS) recently announce topline performance data for the month of June, which featured over $1.3 million in sales, representing over 40% sequential monthly revenue growth. This performance demonstrates a dramatic acceleration in month-over-month growth.
“June set new records for the Company, with a massive acceleration in the pace of growth, which is so far continuing in July,” stated Simon Yu, CEO of Cannabis Strategic Ventures. “We have successfully repositioned ourselves in the ecosystem of the California cannabis marketplace, moving up the ladder and widening our distribution footprint. We will continue to focus on ramping production capacity and steadily driving gains in quality, efficiency, and volume. That has been our focus all year. Besides dramatic expansion in sales volume by weight, we have also been rewarded by the market with steady gains in pricing. That represents the ultimate positive reinforcement.”
Even in light of this news, NUGS has had a rough past week of trading action, with shares sinking something like -2% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Shares of the stock have powered higher over the past month, rallying roughly 53% in that time on strong overall action.
Cannabis Strategic Ventures (OTCMKTS:NUGS) generated sales of $1.4M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 91.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($222K against $13.1M, respectively).
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Published at Thu, 23 Jul 2020 03:35:01 +0000