Verde Science Inc VRCI

Peer Comparisons NOT very challenging....

[GUNSS]

Having, "inherited" a medical marijuana play in the form of Rango Energy (soon to be called Verde Science), I've spent the past several weeks studying the industry in Canada and the U.S. Yes, there's lots of hype and yes, many, many of the companies trying to ride this wave will be wiped out.

At first blush, Rango's sudden move into the "hot" sector looks like a gimmick or an act of desperation. To be sure, it's still early in the game and difficult to know if Rango/Verde will succeed. However, I'm confident of two things....1) the bar is not set very high among so-called medical marijuana peers and 2) there's truly positive momentum in the acceptance of medical marijuana in North America. In the U.S., the sale and consumption of medical marijuana is allowed in 21 states. In addition, two states allow both medical and recreational marijuana-- Colorado & Washington. Acceptance has come a long way in the past 12-24 months.

Peer Valuations- Bar NOT set very high...

Canadian company, Tweed Marijuana Inc. [TWD.v] & [TWMJF] has a US$ 120 million market cap and zero sales. The company's first order of medical marijuana will be shipped this week. The company has the legal authority to grow and sell 15,000 kg per year. That's 33k pounds. Investors appear to be treating the company as if reaching sales of 33k pounds per year is a foregone conclusion.

Creative Edge Nutrition [FITX] has about $4 million of trailing annual revenue as a nutritional supplement player. It's moving into the Canadian medical marijuana space where it will do almost exactly what Tweed is preparing to do. Tweed has a license and an actual crop in progress. Creative Edge does not have a license, but expects one within weeks. After that, It takes about 12 weeks to grow a crop. FITX has a market cap of US$ 294 million.

I'm not merely cherry picking emerging companies with the largest market caps to make Rango look cheap... Tweed and FITX are proposing to do in Canada what Rango is looking into doing in California, namely growing medical marijuana. To recap, Tweed no sales, US $120 million mcap, FITX $4 million sales and a $294 million mcap. Rango Energy, no sales and a $9 million mcap.

Tweed's stock (combined U.S & Canadian tickers) traded in excess of US$ 10 million today alone. That's over 3 million shares at a price above $3/share. Rango's trading volume today? About US$ 30k.

Am I saying that Tweed and FITX are buys at current levels? Not sure, I don't know enough about them or the Canadian medical marijuana market. But, IF I WANTED to play the medical marijuana sector I would much rather own a $9 million market cap company that hasn't already spiked, then a Tweed or a FITX.

I'm hoping to see further news from the Rango/Verde Science in coming weeks. If I don't see some tangible, actionable developments this Spring, all bets are off.