They don’t have a permit to grow medical marijuana – as far as we know – and their business plan is pretty much secret, and Stockhouse Bullboarders don’t appear to be having much luck tracking down management for a chat… but Satori Resources (
TSX:V.BUD,
Stock Forum) is drawing heavy trading volume as speculators take a gamble that the ‘mining company’ will soon be growing weed in Flin Flon mineshafts.
Trading action on V.BUD was unusually heavy Thursday morning, after
Stockhouse pondered what was going on with the company in the wake of a shift to what Satori called “agri-mining and agri-pharmaceuticals.” The signing of a medical marijuana industry consultant, Scott Walters, on Tuesday has only added momentum to the rumours.
Shares climbed 62.5% to $0.13, with 6.9 million shares traded by 3pm Eastern.
That volume led the Venture Exchange by a significant margin.
Satori’s keeping its cards close to its chest, but it isn’t the only weed player on the TSX. LW Capital Pool (
TSX:V.LWI.H,
Stock Forum) is seeking to engage in a reverse merger with Tweed Inc., which has a license to provide medical marijuana, having spent six months doing paperwork, securing a former Hershey candy factory as a facility, and ensuring they measure up on the security and quality control fronts. LW stock is trade-halted while the merger process works through, but it currently shows a market cap of $36k.
Plans are to issue 136 million shares to Tweed for its business.
Tweed founders raised $5m privately to get the company started.
Getting permitted by the Canadian government may well have been what Satori has been up to for the last year, as it revealed scant information to investors other than it has a mine and is seeking to exploit it in new ways.
The government has reportedly received several hundred applications from companies for grow licenses, with only seven approved as of recently.
And many of those companies in the application process aren’t Canadian, but rather cashed up US firms who are already growing south of the border. Among those are names like Creative Edge Nutrition (
OTO:FITX,
Stock Forum), which has partnered with Endexx Coporation (
OTO:EDXC,
Stock Forum) and GrowLife (
OBB:PHOT,Stock Forum) to bring substantial money and background to the table
.
The government asks for a 15-page application. Creative Edge hit them with 900 pages, according to reports, and has subsequently obtained a ‘ready to build’ letter from Health Canada to allow them to start construction of a 58,000 sq. ft facility in Ontario.
Getting a license is worth the trouble; In the US, companies such as Medical Marijuana Inc. and Cannabis Science are both listed and showing crazy share price increases, and Tweed anticipates that it will generate revenue as high as $100m by its second year.
The stock charts for firms like GW Pharmaceuticals (
NASDAQ:GWPH,
Stock Forum), which is up 800% since September, and Hemp Inc (
OTO:HEMP,
Stock Forum), which is up 1200% since December, present a scenario that looks like a bubble, but companies such as Full Circle Capital (
NASDAQ:FULL,
Stock Forum) are investing heavily in the industry as a high performance yield option.
This shift has seen a lot of shell companies suddenly opt to be in the medical marijuana business, with the general strategy being to apply for a license or, if no such license should come, invest in companies that snag one.
Toronto-based PharmaCan Capital appears set to follow the latter strategy when it goes to IPO on April 1.
Whether Satori (or PharmaCan, or any number of subsequent competitors) is a legitimate weed player or would simply like to be is the big question. If it’s the former, their current share price will likely be a launchpad to much bigger things.
But if no government license comes? That could be ugly.
Clearly, a lot of investors are willing to take that chance.