At first glance, there's nothing to tell about the Inexco Mining (CSE:C.IMC, Stock Forum) story, at least not from the medical marijuana side.
Inexco is one of those companies that, on the outside at least, is still very much a miner. Officially, it's merely 'exploring options' in the weed business, like 60 other weed-interested Canadian companies before it.
Unofficially however, the warhead is loaded, locked, and ready for launch.
Central to what may be Inexco's grand plan is another company called Worldwide Marijuana.
Worldwide isn't misnamed; the company has plans to be a major player in Canada, but also potentially in the USA, and beyond. It's got high hopes, if you'll excuse the pun, and is positioning itself to open the show as a politically-connected player.
WMI has locked in the right to purchase a 46k sq. ft. building suitable for the growth of medical marijuana in Trail, B.C. with approval for a 28k sq. ft. expansion, which is currently the basis of a Health Canada MMPR application process.
Should that MMPR hit, Worldwide gets to take over a building that cost well north of $7m to build originally, and was recently appraised as being worth $6.4m... for $2.2m.
But unlike most players in the space, WMI isn't about to sit around and wait to be told it can do business, so it's out there in the marketplace making moves with existing licensed producers, looking to acquire a going concern.
Now, talk to any weedco that has one of those elusive MMRP approvals and they'll tell you the going rate to buy them out is $50m+. But that's ridicu-talk, and just about every company out there knows it.
Let's be serious – there's some amazing value on the markets right now for blue ribbon LPs. Bedrocan's (TSX:V.BED, Stock Forum) market cap right now is just $45m, a bargain at twice the price considering the exclusive import license it has. T-Bird Pharma (TSX:V.TPI, Stock Forum) sits at just $25m, far below what many early investors expected for the premium brand play. Tweed (TSX:V.TWD, Stock Forum) is holding at an $80m market cap, but has slid fairly consistently for six months now. Mettrum (TSX:V.MT, Stock Forum) opened at around $55m a week ago, without much fanfare. Supreme (CSE:C.SL, Stock Forum) doesn't have its MMPR yet, but is considered to be at the finish line, and an utter steal at a $24m market cap.
Only Organigram (TSX:V.OGI, Stock Forum) seems to have a valuation right now that would keep it out of the line of acquisition talk.
Realistically, however, those caps are just propping up the next tier of LP in the market, your Whistler's and Peace Naturals', both of which have struggled to maintain their grows over the last year amid quality concerns and, you know, finding someone to buy their stuff. If anyone was looking to grab an LP on the cheap, those are two of several options that may be happy to take the money and walk away.
And Worldwide has a little money. More than that, Inexco itself has a rolodex that, according to President and CEO Craig Engelsman, it's having no trouble exploiting to build not just a deep investor base for what's to come, but an even deeper board.
As I'm writing this, I'm looking over materials that outline Worldwide's board of directors – so far – and it's relatively bad ass.
Leading the show is Director and President Robert Marsh, a retired Canadian naval commander who led the crew of the HMCS Huron ans was special liaison to NATO. Now ask yourself, do you think a guy who was responsible for operation readiness of the west coast fleet can run a grow house? If your answer is yes, move to the next paragraph. If it's no, you might also want to know that Marsh was a liaison and planning stakeholder for Health Canada when it was setting up its MMAR program.
Yes, Worldwide's head honcho helped Health Canada roll out the old licensing system.
The corporate secretary is Gordon Fretwell, who has been a securities lawyer for the past 25 years and has basically served as a director on just about every public company with a vowel in its name.
Let's talk about agriculture: Worldwide boasts Vic Bruce as a director of the company. Don't know who Vic Bruce is? Then you're not a farmer. He was previously a director on the $6.1b Canadian mega-grain handler, Viterra, not to mention a director of the Saskatchewan Wheat Pool for over ten years.
Detective Sergeant Dave Stephens, who enjoyed a 28 year career in operational policing, is a member of the advisory board. Think this crew might get through a background check?
Jon Dizdar is another advisor, and a veteran of the old MMAR system under which he set up several gardens, and was recently a consultant on a $3m facility in B.C. He's been doing research on the use of cannabis for chronic conditions for the past six years, working with labs and hospitals in doing so. On that front, Dr Bill Code serves as a director. A retired anesthesiologist, he's been studying auto-immune diseases since 1997.
This is a bad ass board for any medical marijuana player, but what Engelsman brings, with the backing of his Private Heron management fund, is a murderers row of big money players to tap when it's time to make a big purchase.
That's kind of Engelsman's thing. He's been in the venture capital game since 1998, and he's had plenty of wins. He co-founded Canaco Resources, which became Orca Gold (TSX:V.ORG, Stock Forum), and before that he founded Norsemont Mining. He was also into Harmony Gold, which didn't go his way but not for lack of trying.
His game is pretty simple, and it appears to work: Stack the board with major players, get them in a nice tight vehicle, let them do what they do best and have the powder dry for when a big money move is needed.
In Inexco, he's still at stage one. While the Worldwide board is hefty, it's not done yet. There are rumblings of political allies. There's an eye cast internationally to export options. When Jamaica and Uruguay start growing great rolling fields of ganj', expect to see Worldwide nearby.
Engelsman knows how to sell the deal. He's a Don Draper reincarnation, from the suit to the game to the pitch. When he's telling me about Inexco's hopes and dreams, I find myself wanting it all to be real, today, because if what he's looking to put together actually comes together, it will elevate the entire industry. His targets are nutty, but so too are the people he's already got to sign on the dotted line.
Inexco, and Worldwide by extension, have watched the first phase of the weed business roll out and opted to steer clear as companies made huge promises and massive build-outs and big commitments of cash and time and treasure and reputation. Now the time has come where it's about to make its presence felt by doing deals with those that have thus far unreached potential.
The board announcement, which probably landed as this story did, is the first shot across the bow of everyone else. When the Canadian military forces have to salute your company President as he passes, you know you've got some clout.
Inexco wants to be a juggernaut – not just a big player but a big nasty eater of all things profitable and weedy. Whether it can be or not will be determined by many factors, not the least of which is Engelsman's ability to deliver on his promise, and his ability to close the acquisition of Worldwide.
So far, so good.
Inexco, which is still a mining company (duly noted, CSE), has a $5.5m market cap and a ridiculously tight 10m shares outstanding which would make it a good deal even if the prospect of mining was all you had to look forward to.
The company is a Stockhouse client – but then, so is just about everyone with any clout these days (including all the weed companies mentioned above with the exception of Tweed and Mettrum).
Get it on your watchlist and see if it hits its milestones. If it does, look out above.
--Chris Parry
https://www.twitter.com/chrisparry