I saw this on reddit and thought i would share. my brother sent to me when i was sad about luff going down.
Hi Canadapennystocks team! Good start off to Monday - good to see a lot of the market back in green. It's been nearly 2 weeks of losses due to these damn bond yields, and frankly I'm ready for the bulls to return. I'm playing/following/creeping 3 major pennystock stocks right now - LUFF Brands, High Tide, and NUMI. All these are rockets in my opinion Will send DD on the others shortly.
My position in LUFF Brands - full disclosure:
I'm always open and honest - so I bought about $5700 of this stock, with my average price of around 0.022. It started to run (or so I thought) and I got caught up in fomo and bought another $3300 at $0.04, and another $1200 at 0.045. So I'm in for about $10k, but it's becoming increasingly hard to get shares as there's not a lot of volume traded. Please do your own research on LUFF Brands but from what I see - this stock is going to rip.
Backstory:
LUFF started as Ascent Industries Corporation back in 2017, which was solely a cannabis company in Canada. They were worth about $380M at the time, but then had "issues" with Health Canada. It's hard to say exactly what, but my bet is that they we're either growing somehow illegally, or had some infractions in their growing process, and were flagged by Health Canada. There's a lot of different theories, but long story short they lost their license. There's some details on the CBC here:
https://www.cbc.ca/news/business/ascent-pot-creditor-protection-1.5042155
In any event - Health Canada cuts their license, the stock tanks, shareholders get pissed and force the company into bankruptcy protection. As part of that, they sell off all their Canadian assets to a company called BZAM and restructure the company to focus in the USA market. They have some major facilities in Vegas and Portland, and are going after the CBD market in the USA, but still listed on the CSE here in Canada and have offices in BC.
Details on the sale here:
https://mjbizdaily.com/ascent-sell-canadian-cannabis-assets-undisclosed-cash/#:~:text=Ascent%20to%20sell%20Canadian%20cannabis%20assets%20for%20CA%2441%20million&text=The%20deal%20is%20expected%20to%20close%20around%20April%203.&text=The%20British%20Columbia%2Dbased%20company,assets%20comprising%20the%20Canadian%20business.
So when I look at the industry, there was a huge run in 2018/early 2019, then the cannabis market crashes in Canada. All the companies in the industry went down like 50-80% from their peak. Over the past couple years, the reason everyone says there was issues was because of over supply in the market. What it looks like is that the Canada weed market is a bad market, for a lot of different reasons.
Anyway, why I'm saying this is that these guys actually gave up/forced out of Canada into the USA, but that was actually a saving grace for them. USA market is where you would want to be, and they aren't bloated with massive greenhouses in Canada anymore.
In the past 4-5 months, a lot of the main players (Canopy, Aurora etc) have actually come back. Their stocks are not at highs, but they're getting very high again because of the USA market opportunity with Biden. None of that has been priced into LUFF at all yet. Plus they haven't even released any financials so nobody knows about these guys yet.
Here's what I'm seeing:
They launched their shop site. I signed up and got an email with a discount code, so they're already selling products (although haven't declared sales yet):
https://webfiles.thecse.com/sedar_filings/00045751/2101141236347390.pdf
I took a look at their Twitter posts, they're producing in pretty heavy quantities and are putting out a lot of new content to drive sales. They're using a lot of different ingredients, some are very good for sleep, and others are very good for pain management. They're heavily investing into their blogs to educate:
https://shop.luffbrands.com/what-is-cbn/
They produce internally, so their margins are going to be good and capacity looks very strong:
https://webfiles.thecse.com/sedar_filings/00045751/2009291448307976.pdf
Here is the big one. Look at page 16 of their financial report:
https://webfiles.thecse.com/sedar_filings/00045751/2011231320244131.pdf
They have 88 MILLION warrants at an exercise price of 0.05 expiring on June 24. The stock just hit 0.05 today, and I'm telling you people are going to buy in again and run it up. Normally I'd be concerned about dilution, but there's already so many shares out its not really an issue for me.
Then I look at the latest SEDI filings, and it seems all their insiders got shares at 0.015c and 2c, and options starting at 0.05c. This again tells me that everyone is incentivized to make this thing go at least above 8-10, likely 15-20c.
Their management team looks like they're making it happen. The reappointed the CEO who previously got them to $380M, so from my opinion it all points to a go here.
I creep these guys on Twitter like crazy and I'm seeing good things. They haven't released sales, but it's definitely positive momentum from what I can see.
Like I said, I do own this stock, but trying to provide my rationale. Hope it helps, good luck to all!