The new big daddy of the Canadian weed scene,
Organigram (
TSX:V.OGI,
Stock Forum), is pushing hard into the US investor audience this week, which is likely to see the stock wiggle a little. OGI’s recent arrival on the Canadian public markets was a distinctly successful one, with insiders managing to see their $0.85 private placement stock turn into $2+ on the markets on opening day, with a $100m market cap shoving the company right up alongside
Tweed (
TSX:V.TWD,
Stock Forum) at the top of the tree.
The fact that Organigram has managed to list on the TSX rather than take the more popular and hurdle-free route to the CSE (which Americans have trouble buying into) keeps the US door very much open for southern investors, and the OTC ticker OGRMF adds to the availability.
There's significant interest on the southern side of the parallel for the company, with pundits such as Alan Brochstein and Twitter mover/shaker The Wolf of Weed Street taking long hard looks at the stock. Both of those have a significant audience, and with US media and marketing planned, it wouldn’t take much for those elements to start driving returns for shareholders in the weeks ahead.
For Americans annoyed at Tweed's failure to launch and still looking to get a foothold in the Canadian market, Organigram is a solid way in. For Canadians, it's just another burst of activity that should help keep the stock price around $1.80 to $2 as the company rolls out its growth plan.
I have to be careful what I say because I’m privy to some insider info, but I can confirm the company is active behind the scenes right now. All that fat private placement money buys a lot of growth possibilities and, with the first crop selling out quickly, I would expect news from the company soon on that front.
If you’re a fan of Organigram but figure the three-bagger potential buying moment has passed,
Thunderbird Biomedical (
TSX:V.TPI,
Stock Forum) is listing tomorrow morning, and is likely to jack pretty hard upward.
The one-liner summary is the company is MMPR licensed for a
small BC grow, it's focus is definitely on pharmaceutical grade medical marijuana, sold to patients with a definite medical need who won't mind paying a premium for consistent, quality product. Their monthly expenses are minimal, their financial team at Hamza Thindal Capital are a very experienced outfit with a pharmaceutical focus, and to me this is a grown-up play with minimal downside, sensible upside, and a tightly wound share structure (under $20m market cap as things stand) built for upward mobility.
If you like Organigram, it’s important to note that these guys have more licensed growing space than OGI and Bedrocan right now (both those companies are planning larger buildouts but right now are tight on grow space), and they’re kicking the tires on expansion possibilities later in the year. Their
website isn't yet up, but that'll change soon.
What’s the differentiator? Thunderbird is establishing a fat scientific advisory board and ultimately will be looking to work more with health care providers with a view to supplying large contracts. They’ll be pushing out their B2C business as well, but one hospital turned into a client could be a really big deal, and this is an outfit geared to dealing with that market.
I’m told the company has cash in hand to be aggressive in growth, and has enough dough to bring its second facility online. This is key, especially with the share count as small as it is now.
I think V.TPI is undervalued at the IPO stage, but it has been a little under the radar so I’m not expecting a $100m market cap at launch. That said, insiders tell me the book is stacked with folks who couldn't get into the last $3m raise, put together by GMP, which was exactly the same environment that saw Organigam run the board on its debut.
NOTE: The V.TPI ticker symbol used to belong to Tenth Power Technologies, which went private in mid-2013. Different company.
At the other end of the respectability spectrum, a large scale social media pump is happening for
Medican (
OTO:MDCN,
Stock Forum) right now, using a network of online 'bot' accounts, all following each other, all with odd names, all set to do nothing but repeat an endless loop of phrases in support of a small number of tickers.
These are retweeted (and presumably owned by) a Twitter user who calls himself The Dumper and runs an account named 'Houston Group'.
That these accounts are fake isn't hard to work out. Just searching for a simple phrase from one of them brings up dozens of others using the same phrasing with slight variations for other tickers in the scheme, usually at the same time as one another, like midnight on a Sunday.
@dugeqalyqyd: Technical indicators on $HALBare primed for a continued friday run, get ready!
@wolyhiwokojoTechnical indicators on $MDCN are primed for a continued friday, get ready!
@raxosilydegiTechnical indicators on $NSCT are primed for a continued run, get ready!
@pozexojucunTechnical indicators on $GPIW are primed for a continued run this week, get ready!
If you want hundreds more, you'll find them right here: LINK
This is the kind of stuff that gets the SEC halting a stock, and though there's no evidence that Medican management have paid to be part of this scheme, that often doesn't matter. That someone, somewhere, did, and that it might affect the markets, is of paramount importance.
Green and Hill Industries (
OTO:GHIL,
Stock Forum) was recently halted by the SEC for having been part of a promotional campaign (that there’s no evidence, again, management was part of or knew about), and it didn’t help their stock at all.
Quite often these Twitter bots are part of schemes whereby you can buy tens of thousands of followers for as little as $5. The bot accounts will follow yours en masse, and as Twitter identifies them and removes them, you eventually fall back to where you were. This mass bot stock touting scheme is a new twist on that, but also a clumsy and easily identified one. The lesson for investors is, if you see someone loving a stock on Twitter, look to see who that person is before taking their word for anything.
Personally, I've long thought Medican is pump city. It's a company that, from the outset, has made outrageous claims of being the 'best in the business' before it's ever grown a weed plant, the growers are vegetable growers from Surrey, the company structure is a maze of
companies owning companies that own the companies that own them, and the head honcho was literally working in IT just before he bought out the shell, dubbed himself a CEO, and started flying around in helicopters playing Joe Weed Baron.
Whether management is part of this pump activity or not, it's definitely happening, and it looks terrible for the company. I would avoid MDCN in general, but definitely steer clear while the stock is tanking (it’s down 8% today) and this kind of douchey promotion is happening.
When I tweeted at The Dumper to quit pumping with robots, he replied sarcastically, “I'm the Dumper” and, “A
re you saying @gokydiladuduis not a real person?”
I'm sure Goky is a hell of a guy. Him and his 30 followers.
In other 'penny hack' news, Randy Hamdan, one of the bigger investors in Creative Edge Nutrition (OTO:FITX, Stock Forum) and who picked up much of his stock for the price of $0.001 as an insider, has abandoned his legal action against a Seeking Alpha critic of the company, coincidentally just a day before over 100m of his shares become free trading.
Oh yeah – he's also got to contend with the SEC case against him for a 2013 pump and dump scheme. The SEC is seeking to have Hamdan barred from the penny stock caper, permanent injunctions, remuneration of 'ill-gotten gains', penalties and interest.
Nice company you're keeping out there in Michigan, FITX CEO Bill Chabaan. Expect those 100m plus shares to be quickly bounced out the door. 12m shares have changed hands so far today, with the stock down.
In other ‘dumb lawsuit threat’ news, Matt Finston, the Seeking Alpha critic in the middle of the FITX flap above, tells me
Easton Pharmaceuticals (
OTO:EAPH,
Stock Forum) has not made a peep to him after telling the world in a press release they would be launching a lawsuit against him for being mean to them.
Finston’s reporting noted a large amount of money being paid by Easton to fly-by-night stock promotion companies like Blue Horseshoe Stocks, HotPennyPicks, AwesomeStockPick and PennyAuthority.com, and also featured screenshots of alleged emails from company management in which they decry that he “even tweet negative crap [sic] about us like its a game to you.”
An early July news release stated, “Easton believes it will soon join with other companies who have either sued Mr. Finston as a response to similar attacks or are in the process of launching lawsuits.”
In the newspaper industry, press releases like this never get any coverage because saying you’re ‘going to’ sue someone requires no buy in. Until you actually do sue them, and a court date is set, it’s a bullshit promise that rarely comes to fruition. I’ve been subject to dozens of companies claiming they were ‘going to’ sue me, but only once have I had to lay down a retainer with a lawyer, and as soon as discovery neared, that guy opted to run for the hills. In fact, I counter-sued and forced him to settle with me in order to be allowed to quit the action.
Which is all a roundabout way of saying, Easton Pharmaceuticals is a dumb company that you should avoid investing in of you have any sort of affinity with keeping your money. And I look forward to them suing me for saying so.
In happier news, I'm hearing a lot of online talk that
Abattis Bioceuticals (
CSE:C.ATT,
Stock Forum) has a license announcement coming soon. You sometimes here this kind of talk and it can quickly take a life of its own online, where rumour is enough to get some in a buying state of mind. But I have to say I've heard from people who are connected to the company that their gears are well and truly turning right now. I don’t know specifics, but I know management is very smiley right now.
UPDATE: Abattis’ Phytalab unit just announced it has lab certification in Washington State to provide cannabis analysis laboratory services to the industry. Stock up 5.5%.
Abattis CEO Mike Withrow said in a news release, "This is one more milestone the team has achieved in building our overall plan. In addition to revenue, having a licensed lab will serve as a core competency in the Abattis group of companies that collects and stores a bank of tissue culture and logs invaluable data that can be repurposed within the Abattis group of companies and with strategic partners licensed to work with cannabis."
Abattis had the early run in the stage 1 weed explosion early this year, but drifted when it went through a period of quiet solidification while other companies started making grand promises of world domination.
If you look deeply at the extensive vertical integration lineup that Abattis has put together, it's a compelling story. Certainly still in my top 5. And this is a great demonstration of their plan in action.
Also compelling,
Prescient Mining (
CSE:C.PMC,
Stock Forum). I had a long talk with CEO Mark Levy last week and liked what I heard. Lots of big money coming into the firm, strong hands, really tight share structure, and an under the radar story that even now, as it rose 20% last Friday, is still very much hush hush.
Still a few pieces to come together, and I might share more later in the week, but there's at least some 'there' there. It's not just a crazily hectic stock price. Will be interesting to see if it can break the $1 resistance point.
Naturally Splendid (
TSX:V.NSP,
Stock Forum) had some big news out late last week, when its new hemp product showed
massive increases in omega 3 in chickens using it as a feed supplement. Like, MASSIVE, jumps. Game-changing jumps. Stupid jumps.
I've said many nice things about Naturally Splendid over the last so many months, as they've done a good job on rolling out their retail products. But retail isn't an investment play – it's hard work and an easy place to get quickly stomped by the majors whenever you think you've got a win. So I've always said NatSplen needs to get into the commercial food game.
In short, sell a mom some hemp seeds and she'll eat salad for a day. Sell a feed company hemp by-products and your chickens will eat forever and return 600% more Omega 3.
Well, last week's news was step one in getting some of those big food/feed contracts from the likes of a ConAgra or Kellogg's. Still a long way to go, but the company is slapping into third gear right now, looking to raise money quickly to expand the new hemp business aggressively. In fact, there may be some big money about to drop on the company from places that could have a real impact, if what I'm hearing on the grapevine is correct.
Do your own DD, but when you look where the share price is and where it has been, I think things are set for a run.
Also spoke to
Chlormet (
CSE:C.PUF,
Stock Forum) last week. They confirmed they got savagely made an example of by the exchange when they were ripped away from an industry-leading stock price spike and sidelined for a month on a change of business process earlier this year that, ultimately, saw them with no option but to leave the TSX Venture Exchange altogether.
It was a great interview that I'll enjoy bringing to you, but bottom line, this company is doing all the things I'd be doing if I ran the company. All of them. ALL of them.
Verde Science (
OTO:VRCI,
Stock Forum) continues its fall to the sort of level that questions whether it’s accurate to still refer to it as a company. Once promoted by Nancy Pelosi’s son and oft-noted California gubernatorial potential Paul Pelosi, and once helmed by infamous Douglas Lake promoter Harp Sangha (who, if memory serves, still owes Stockhouse money from that caper), VRCI went from big promises to total dumpage very quickly.
At Stockhouse, we made it clear we were uninterested in ‘marketing deals’ with the company when they started calling us up looking to convince us we shouldn’t be writing stories about Sangha’s past. He quickly thereafter quit the CEO role, though the company claimed it had nothing to do with us.
The stock, now, is sub $0.01.
THE MOVERS:
--Chris Parry
https://www.twitter.com/chrisparry
FULL DISCLOSURE: Chlormet and Organigram are Stockhouse Publishing clients, and the author holds stock in OGI. Please take this into consideration when considering a buy of any company stock and do your own due diligence.