To all new IMH shareholders - READ HERE FOR UPDATED TIMELINE Warrants are currently being exercised and holding the price around the 1.75 to 2.35 range. However, this will increase Invictus MD's capacity to 67,000 kg earlier (2019 to 2020) leading to a valuation of 12.00 based on a conservative $1.125/gram net profit and a P/E of 20. This estimated future share price can be even higher if you take into account oil sales due to higher margins. I posted this 4 weeks ago, and I was right about warrants being exercised. They now have an additional $9 - 10 million in the bank for expansion as of Jan 15, 2018.
Why am I long?
Timeline and catalysts for invictus:
2018 January : Finish building 5000 kg production capacity in acreage pharms, possibly receive sales licenses for both AB labs & Acreage Pharms. Announce revenue from wholesale agreement with Canopy Growth Corporation (TSX : WEED). (WE ARE HERE AND ON TRACK FOR END OF JANUARY. AB Labs sales license is now secured, Revenue secured from canopy growth at AB labs. Expansion of facility is near complete. We are waiting on acreage pharms sales license to give us 25 million in revenues yearly. Oils strategy announced is a welcomed addition)
2018 February - 2018 March: Almost 100% positive we receive acreage pharm sales license by this time [ BIGGEST CATALYST ]. Oil production license applied for. Receive production license / buildout for AB Ventures.
2018 April to 2018 June : Finish capacity expansion for AB Labs, receive AB Ventures production license. This will secure an additional ~ 2000 kg in production capacity.
2018 July - 2018 September (RECREATIONAL WEED IS LEGALIZED) - Invictus MD will have 3000+ kg ready to sell in the rec market (15 mil in revenues immediately). Expansion of Acreage Pharms will be finished as well, and oils license received. End result at September 2018 is 22,000 kg annual production capacity across all 3 of their licensed producers. In CY2019 they will be set to make 22,000 kg translating to 110 million in revenue. I strongly believe an acquisition will come after completion of Acreage Pharms expansions.
Here's the big kicker: Why is IMH only at 200 million market cap with 22,000 kg ready for recreational? My big theory is that fund holders are manipulating the price in order to make it more attractive for a buy out. This feels like a Mettrum situation with CGC back in the day, where the valuation just didn't make sense so it got acquired. Either way, it has a LOT to gain in share price from here. Minimum price target imo should be $4 (fully diluted), based on a conservative net income of $1.125 per gram after taxes and a P/E of 20. If all expansions come to fruition we can be looking at $12.
I am very excited for IMH's future, GLTA!
Disclosure : I hold IMH shares and no WEED shares.
This post will be updated, revised and reposted after any notable catalysts are announced.
Last updated January 31, 2018.