Medical marijuana update: Satori strife, Affinor firms, Supreme on a run

Updated at close:

Those watching the fortunes of the Canadian medical marijuana market have long asked why, with no hard plan, Satori Resources (TSX:V.BUD, Stock Forum) is the sector bellwether. When the industry is doing well on the market, V.BUD is up. And when it’s getting pounded, as it has the last few days, V.BUD is down.

The answer to that has been it doesn’t do anything to swing away from the mean. With three directors, no news, and no business plan publicly disclosed, the only thing that can influence it is what everyone else is doing. It’s a ‘me too’ stock.

That changed today when one of Satori’s directors quit. That puts them under the three director minimum imposed by the TSX for listed companies.

According to Stockhouse’s Gaalen Engen, “Ms. Pamela Strand has handed in her post to pursue a new career path and with the understanding that the company may be considering an alternative transaction.”

In other words, she’s not down with this whole weed thing. Which is weird since she was director of a company named after a weed strain, with the ticker symbol V.BUD. It can’t exactly have been a surprise.

Satori’s stock price is unchanged at the time of writing, but it’s also been trade halted for most of the day…

Supreme Pharmaceuticals (TSX:V.SL, Stock Forum) is the hero of the sector in early trading, rising 37.5% on no news but increasing buzz (no pun intended). 12m volume on the day.

Affinor Resources (CSE:C.AFI, Stock Forum) has also catapulted, up 34.7, having put out a news release that looks damn close to an actual business concept. The company has confirmed it is in the marijuana space, and says it is looking to consolidate the loose collective of licensed (for now) growers out there, in the effort of getting one of the much vaunted, much desired, new grow licenses.

The company says, “Affinor's plans to partner with and provide financing for Medical Marijuana and Industrial Hemp companies will provide Affinor with an equity share in each business and/or royalty on sales. This will allow Affinor to not only share in the growth and cash flow from these explosive industries but also diversify its operations in more than just one single location, further de-risking its new business plan. Affinor is also reviewing opportunities in the United States where legislation permits, and will look to expand operations throughout North America with the forward looking concept that more American States will adopt this new pro Marijuana legislation.”

I like that a lot. If there’s a dip in the coming days, that’ll be a good buying opportunity because, right now, it’s a hockey stick, up from $0.04 on the 21st of the month to $0.31 today, a 700%+ spike.

At the other end of the play, Enertopia (CSE:C.TOP, Stock Forum) is getting creamed. Down consistently over the last five days from highs over a dollar to under $0.55 today, it’s lost 22.8% on the day. Perhaps less a case of Enertopia and more a case of Entropy, with that being defined as " loosely associated with the amount of order, disorder, and/or chaos in a thermodynamic system."

The hard-to-trade Terra Firma Resources (TSX:V.TFR, Stock Forum) is also getting worked. With a lot of shares in play and a low share price, any move to sell is requiring an acceptance of the market price, which is seeing a half cent shift down amounting to a 20% loss. If TFR can find actual news to promote, it could spring up, but it has been very ‘Zodiac-like’ to date.

Cavan Ventures (TSX:V.CVN, Stock Forum) shed 22.2% of its share price on 2m+ volume. No news.

NEWS UPDATE:

The $250m market cap Medical Marijuana Inc. (OTO:MJNA, Stock Forum) has announced a joint venture with LiveWire Ergogenics under the name HempWire, to distribute hemp-based retail products through LiveWire’s distribution chain to stores. Shares were down a nudge.

Crailar Technologies (TSX:V.CL, Stock Forum) was suggested by a reader today as a company we should be covering. Fair enough. They just happened to release results today and oooh…

“CRAiLAR Technologies Inc, which produces and markets CRAiLAR® Flax fiber The Friendliest Fiber On The Planet™, today reported sales of $400k and a net lossof $3.2 million or $0.07 per share for the fourth quarter ended December 28, 2013.”

Q2 of 2013 showed another $3.2 million lost on sales of $200k. In Q4 2012, the company had no sales at all, and lost $3.1 million. At this rate, if the last year has been any guide, it will take 28 quarters for sales to reach the level of the regular $3.2m quarterly losses.

The company just closed a private placement five days ago for the same amount of money they lost this quarter, and they borrowed $3.2m from IKEA last quarter, and raised another $2m through a PP by way of Adidas, which insisted they raise another $3m this quarter, presumably to stay afloat... July 2013? Another $3.2m in financing. Which means, unless something crazy happens, they'll need another PP next quarter, and another the next. How this stock keeps going up, I have no idea.

On the legislative front, uber-Conservative Utah has signed a new law that allows children with certain conditions to be prescribed cannabis-based medications, while Maryland has officially okayed medical marijuana for patients.

Locally, Hamilton Ontario municipal officials have moved from arguing against marijuana use to arguing over how far from the road grow operations should be set.

Finally, researchers at the University of Texas at Dallas have released stats that show legalizing medical marijuana has not increased crime in any US jurisdiction.

They're clearly missing the increase in days late for work due to sleeping in, or convenience store profits from increased late night microwave hamburger sales but I'm sure that research will follow.

NEW PLAYERS:

UPDATE! Been watching WestStar Resources (TSX:V.WER, Stock Forum) for a while, as a few days ago it released a cryptic 'new opportunities' release that, oddly, isn't found on their website. Nor is this one, found on Sedar.

"Weststar Resources Corp. is pleased to announce that it has engaged Mr. Doug Macdonell as a consultant to the Company. Mr. Macdonell is a retired RCMP officer and recognized expert in the field of cannabis and cannabis cultivation. He initiated and supervised RCMP marijuana grow facilities in Vancouver and Edmonton for the purpose of training RCMP and City Police personnel to become experts in this field. In addition to training police in the field of cannabis production, Mr. Macdonell has also lectured extensively to other agencies such as the Drug Enforcement Agency in the U.S. and Department of Justice Personnel in Canada. He has been recognized as an expert witness in cannabis, cannabis production and distribution at all levels of the Canadian court system."

Stock price is unchanged on the news, because getting a guy who knows about weed to agree to be buddies is something almost all of these companies has done by now, but it at least warrants coverage going forward.

UPDATE! Chlormet Technologies (formerly Newton Gold Corp) (TSX:V.CMT, Stock Forum) has done a deal with a grower, paying $120,000 and gaining 16.5% equity interest in PrivCo, with an option to take a 100% stake should it get an MMPR license. PrivCo has a secure Ontario location and an existing license application in play.

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