Next Gen Metals (CSE:C.N, Stock Forum), the creators of the Greenrush medical marijuana investors conference, have announced their second prong – the creation of Greenrush Laboratories. Harry Barr’s dot.bong company (which is a sometime advertiser with Stockhouse) is staging the aforementioned Greenrush conference in Vancouver Wednesday (which I will be presenting at – 9:30am for those awake at that time), and has long said his firm will be a green incubator - no pun intended.
The news release from this morning says the company will “provide analytical testing for the Legal Cannabis Industry in North America by delivering customized solutions and accurate analytical results to our clients.”
I’ll say only this: If you’re going to be a weed company, setting up a lab is a lot cheaper way to do it than looking to turn a barn into a pharmaceutical grade, high security grow op.
Will it be a billion dollar business? Unlikely, but as Next Gen fills out with more weed branches, it won’t hurt to have its own lab, trade show, etc etc…
The Greenrush conference is an exhibitor sell-out, with Anexco’s ‘BC Chronic’ brand as its platinum sponsor. Pacific North West Capital (another Barr co.), Lexaria, Bayhorse, Abattis, Naturally Splendid, Supreme Pharmaceuticals, Satori and Rango Energy will be there, among the companies we’re covering.
The event promises to be medical marijuana's 'coming out' party, where it shifts from flash in the pan to legitimate business sector. That's needed, as lately the trading volume in weed stocks has slowed, and though stock prices remain largely static, the boom times of miners jumping ship to weed every day and 'everyone gets a new caaaaaar' are pretty much over.
Thank Christ. Let's get down to business.
Naturally Splendid (TSX:V.NSP, Stock Forum) had two pieces of news this week; they’re applying for a listing on the OTCQB, which will help them find US investors, and they received non-GMO certification for their Natera hemp-based food products.
That certification puts the products in the $5b a year non-GMO food space, which is good, but it sounds like the process was a monumental pain in the ass.
"We are extremely pleased to reach this milestone in product quality as we have been working diligently with the Non GMO Project team over the past months to secure this status." says Bryan Carson, VP Operations at Naturally Splendid in a news release. "Not only did we have to provide extensive data on the ingredients in our products but we were also required to have every facility involved in the production of NATERA products certified by the Non GMO Project. This new standard differentiates our company and our products from all other suppliers who have not taken this important product trait and consumer movement seriously."
I’ve not given a lot of time and/or thought to the hemp food space, but I’m increasingly convinced that value-adding marijuana as a commodity is the way forward, as I’m fairly certain it’s going to hit an oversupply point quickly. This means growers will be fighting for every scrap of margin, and processors will be making bank.
In other words, why own the drill when you can own the mill? Why grow wheat for a buck a pound when you can sell cookies for a buck each?
Which leads me to a big question regarding the Canadian medical marijuana space… where are the bakers?
I’ll be talking to Naturally Splendid at GreenRush and will report back anything newsy.
I’m also going to be sitting down with the Satori Resources (TSX:V.BUD, Stock Forum) crowd at the conference to hear what they have planned for the future. I am all ears. Honest.
I’ve given Satori grief in the past (I don’t think the SadStori nickname will die any time soon) because for a long time I saw them as all ticker, no trousers, but I’m beginning to hear rumblings that something’s coming for the BUD brigade, so I’ll give them a fair hearing and report back.
Satori is looking for $800k in a private placement at $0.05 per, with an $0.08 warrant, just announced a few minutes ago.
Weststar Resources (TSX:V.WER, Stock Forum) got a 42% boost today on news it has an NDA in place with a private company with a 'seed to sale' business out of "located within a secured, fully serviced, industrial-zoned 18,000-square-foot facility in the Lower Mainland of British Columbia."
The industrial premise itself is composed of a 55,000-square-foot building situated on 3.5 acres. The facility contains the necessary infrastructure required to support Health Canada's MMPR commercial production requirements.
Will Rascan, president/chief executive officer of Weststar, stated in a news release, "The signing of the NDA prohibits Weststar at this time from divulging specifics of the business relating to the scope and breadth of Privco's reach within this new and exciting marijuana space; however, we are very enthusiastic for this potential opportunity for our shareholders and continue our detailed due diligence."
Will tells me he'll be at the conference, so I'll hit him up for more info as best I can.
Creative Edge (OTO:FITX, Stock Forum) had a nice big write-up in the New York Post today for what it called "the world's largest pot facility" that will "grow 1.3 million pounds of pot from 50,000 plants — an operation that could produce $5 billion in sales per year when it starts producing in a few weeks after it passes government inspections."
Let's be clear - it's an 'if' on the passing government inspections, not a 'when', and nobody's earning $5b a year in sales. Nope. Not going to happen. Fantasy. Health Canada estimates $5b would be the entire nation's annual pot sales so, unless FITX becomes the Google of ganja, that ain't going to be a thing.
Creatve Edge will be a big play, for sure. But pot is already in plentiful supply. You drop 50,000 more plants a year into the mix, you're looking at a very big oversupply. Added to which, you need a venue to sell them in large numbers and that's going to cost marketing dollars.
Which isn't to say FITX is to be avoided. They've invested $20m in their facility to date and, in all likelihood, they'll get their MMPR paperwork approved. But being a successful weed grower isn't just about the growing, and Creative Edge is going to have a lot of overhead to handle if the price of pot starts to fade.
Greenbank Capital (CSE:C.GBC, Stock Forum) jumped 80% Monday on the back of two tiny trades. I’m not going to suggest those trades were entirely intended to drive up the share price, but if they weren’t, whoever bought the shares lost a bundle because, today, they could have got them for half the price.
Just to remind folks, Greenbank’s plan is to make https://www. marijuanaforcanada.ca the premier Canadian medical marijuana website.
IN BRIEF:
Meridex Software (V.MSC.H, Stock Forum) closes a $690,000 private placement. Proceeds to settle debt and to be used as working capital. If they are going MMJ, I sure hope they do soon, as the last news I have from them involved the company buying the rights to a Flo Rida fitness DVD series.
Tweed (TSX:V.TWD, Stock Forum) has shipped its first orders. I bought a little Tweed a few weeks back because I think it’s worth around $4 a share realistically, but ditched it today as the Americans have other shiny things to look at, so I can’t see it moving up significantly for a while. Which means it’ll be a three-bagger by week’s end, if history is any guide.
Victory Ventures (TSX:V.VVN, Stock Forum) has acquired a mineral property for the annual wage of a Sunway sandwich artist. They’ve got the PDL property in the Keremeos-Olalla region of B.C. for $2500 cash and 500k shares worth $0.03 each. One might suspect they could clear cut the property, sell the wood, and triple their money. The things companies will do to try to prove to regulators that they really, truly, honestly are a mining company still…
Jourdan Resources (TSX:V.JOR, Stock Forum) got some decent grab samples from their Cache phosphate project. If you’re into all that rocks and holes kind of thing. Bayhorse Silver (TSX:V.BHS, Stock Forum) is also doing the mining thing.
Growlife (OTT:PHOT, Stock Forum) is collecting more class action lawsuit press releases. Because money.
NEW PLAYERS:
Thanks to commenter Boug1234 for pointing out the Ross Rebagliati company Ross' Gold is planning an RTO with Green and Hill Enterprises (OTO:GHIL, Stock Forum), a former OTC frack services company.
Ross' Gold is an existing medical marijuana brand that the new company is going to look to hype through Rebagliati's name, making this the first celebrity endorsed Canadian weed play. Rebagliati lost an Olympic gold medal after he was found to have tested positive for marijuana use, though he won it back on appeal.
His company plans to play off the Olympic story by releasing Ross' Gold, Ross' Silver and Ross' Bronze brands of weed, which the company is planning to have grown by other producers. Worryingly, the company is already comparing its products to pharmaceutical brands with sales in the billions - EVEN THOUGH THE PRODUCT DOESN'T APPEAR TO EXIST YET.
And, oh yeah, they're shopping a TV series proposal. Because that's what you want when you're building a business - TV cameras following you to the john.
From the news release (key phrases bolded by me for emphasis), "Ross's Gold is poised to be the first super premium BRANDED medical marijuana, launched in tandem with the Canadian government's changes in legislation. Think about it: Advil, Tylenol, Grey Goose etc- brands are all around us, and provide the consumer with confidence. The Company is positioning Ross' Gold to shift, and ultimately dominatethe pain management market that is about to erupt with legitimized medicinal marijuana."
Oh brother.
In January, the company plan was to open two weed coffee houses in Whistler, until Health Canada straighten Ross out on that being illegal and all.
A word of warning: If what I'm seeing in our system as a $177m market cap is correct, this company is about as blown out as you can get, and with some of the claims on its first news release, and the fact that all they sell right now is lip balm and t-shirts, I don't have a lot of confidence in this being a well steered long term play. Putting Ross Rebagliati's name on the side of a weed dispensary jar is NOT worth $177m. I doubt anyone under the age of forty knows him, and anyone over the age of forty gives a crap about him.
The company lost $180k last year doing barely any business, according to OTC Filings, and in January appeared to have almost no money in the bank.
In an interview with BC Business magazine, Rebagliati boasted of his future success, saying, "
Let’s say that all of our producers get their licence on the same day: we’re going to be handling 1,000-plus kilos a year per producer. With a dozen producers, that’s 1,000 kilos of product a month that we’ll be selling."
Oh really, Ross? Will you be selling 1,000 kilos of product a month? That's great, because I'm going to be selling a million kilos a month from my office. Oh, I don't have a license to do so and I've never done so before, but I'm really for surely f'reals certain that I'll sell out without a problem.
From the company website, a warning: "ROSS’ GOLD (“GHIL”) STOCK IS A HIGH RISK INVESTMENT. ROSS’ GOLD IS AN EARLY STAGE COMPANY AND IS HIGHLY VULNERABLE TO KNOWN AND UNFORESEEN RISKS, INCLUDING BUT NOT LIMITED TO INABILITY TO EARN REVENUE AND CONTINUE OPERATIONS."
Take a look at the stock chart on this outfit, which has gone from $0.25 in early March to over $4.50 soon after, and is now back down to $1.75, and tell me I'm wrong. This listing strikes me as something that looks like it might already be past the pump stage and halfway through the dump period.
Too harsh? Bullshit. If a pizza restaurant opened up with the owner saying, "My pizza makers can make 20 pizzas per hour, and we'll be open ten hours a day, and there's five pizza makers so we're going to sell 1000 pizzas a day!", you'd take that man's keys away from him and open a laundromat in its place.
If you're looking for a celebrity endorsed play, I hear there's a better one, with global recognition, coming soon. No legacy losses to contend with, no assumptions of genius inherent. No Advil comparisons.
UPDATE ON THE UPDATE:
Sorry, there was no update Monday due to my needing to spend time on my presentation at the Greenrush show tomorrow.
Sneak preview in 50 words or less: If you're not a Hell's Angel and you think you're going to build a business growing weed, you are three months from an education. Nobody got rich growing hops after the end of prohibition. Value-added is where it's at.
THE MOVERS: