Canadian marijuana stock THC BioMed Intl Ltd. (CSE:THC) is reported to be Canada’s largest supplier of legal Cannabis Genetics
SmallCapPower | June 22, 2018: THC BioMed Intl Ltd. (CSE:THC), a Canadian marijuana stock, is a medical cannabis producer and seller under ACMPR. The Company conducts leading scientific research and development and is reported to be Canada’s largest supplier of legal Cannabis Genetics. Currently, THC BioMed occupies 20,000 sq. ft. owned and rented facilities in Kelowna, British Columbia. Most recently, on June 12, 2018, the Company announced plans to purchase two additional strata lots for production in the industrial complex in Kelowna as part of its expansion plan for $650,000. The strata lots are expected to produce quality cannabis products to secure supply agreements with various provincial governments.
Popular “THC INDICA” Landrace Strain
Source: Company Website
Acquiring Australian Cannabis Wholesaler
THC BioMed is actively seeking expansion opportunities to penetrate into the global cannabis market. In April 2018, the Company entered into a definitive agreement to acquire 51% of Burleigh Heads Cannabis Pty Ltd, a private licensed importer and wholesaler of medical marijuana in Australia. As a government-authorized supplier of medical cannabis, BHC is eligible to import medical cannabis and sell it to approved purchasers within Australia. Upon completion of the acquisition, THC BioMed will become the majority shareholder and parent company of BHC, and the Company expects that this vertical integration will broaden its international distribution channels.
Strategic Packaging Subsidiary
THC BioMed has a wholly-controlled packaging subsidiary, Clone Shipper LLC, in the U.S. This strategic subsidiary provides THC BioMed with packaging products to securely transport live plants to the U.S. cannabis market. Therefore, Clone Shipper is expected to give THC BioMed access to U.S. growth led by the increased legalization of medical marijuana. Clone Shipper products are available on Amazon. For reference, the built-in LED light source promotes plant growth during transit with no leakage or soil displacement issues. The price for a typical dome-covered container is US$19.99, with discounts available depending on the size of the order.
Clone Shipper for Live Plants
Source: Amazon
Balance Sheet and Valuation
As of January 31, 2018, the Company had $4.4M in cash and $0.8M in debt.
With a market cap of $141.9M, THC BioMed is currently trading at $1.20, relatively flat YTD. Generally, the Company’s stock price followed a similar pattern as most cannabis equities, falling as much as 52.3% from a peak of $2.80 in January to a bottom of $1.32 in early February, with less significant fluctuation since then. Importantly, we note that the top six cannabis companies in terms of market cap have behaved differently and (WEED, ACB, LEAF, APH, CRON, TGOD) are up 6% YTD, Regardless, THC outperformed its benchmark, the Horizons Marijuana Life Sciences Index ETC (HMMJ), which was down 2.9% over the same period. The Company has no analyst coverage.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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