The hype spike is well and truly over for the medical marijuana sector these days, with companies increasingly needing to actually be real companies and generate actual real news in order to avoid red days.
And for those that don’t, double digit drops await.
Organigram (
TSX:V.OGI,
Stock Forum) put out a
big boy news piece today that announced the company has received organic certification for its products.
Not a big deal, you say? Well, it is. Saying you’re organic is easy, and everyone knows it. I’ve yet to talk to an LP yet that didn’t shrug at Organigram’s organics claim and say ‘ours is organic too, if you think about it.’
But getting yourself ECOCERT certified is a far bigger deal.
I’m told that Organigram is the only marijuana grower in the world that has the certification, and that ECOCERT had to do some extensive research into the weed growing industry to even come up with standards that they later certified Organigram adheres to. What it comes down to is, they’d never actually given any thought to the ganja business before V.OGI CEO Denis Arsenault asked them to.
Which leaves the next question, is ECOCERT even legit, or is it the organics equivalent of a University of Phoenix parapsychology degree?
Actually, ECOCERT is beyond legit. It’s USDA accredited for the National Organic Programme. If you’re in the agriculture game and you want access to organic farming markets, ECOCERT is who you need to talk to.
What the accreditation points to is validation of the entire production chain, from initial ingredients to production methods to prep procedures, with no chemicals, no pesticides, no irradiation, no cold pasteurization, and no synthetic nutrients.
And that’s where Organigram splits from the competition.
Why is that a big deal? Because we’re talking medicine.
People pretty much want their medicine clean of chemicals and pesticides. Of course, many won’t even think about it, but many will and for those people it will be a big deal to have clean weed. And though it will certainly cost Organigram more to grow each gram, if market cap is any indicator, a lot of people seem to agree that it’ll be a market advantage.
The company is aggressively expanding at the moment, utilising some of the $7.4m they raised in their recent financing. They’re expecting a 500% increase in production by year’s end.
Also on the green charts is Supreme Pharmaceuticals (
CSE:C.SL,
Stock Forum), which continues to build share price as it comes closer to the big MMPR approval. I’ll be touching base with company management this week for an update on where things are with Health Canada, but last I heard, the company is receiving a lot of plaudits for doing things the right way so far. Operations man John Fowler is killing it, both at the facility and in boardrooms.
Every call I have with Supreme starts with the same question; “Fowler still there?”, because, for mine, the $30-50m of market cap that should be on that stock emanates entirely from Fowler’s Terminator-like ability to walk through walls to get the job done.
Fowler is the T-1000 of weed companies. If Supreme locks him down for permanents, reallocate your RRSP.
Supreme is up to $0.44, from $0.26 two months back – nearly a double, people.
Creative Edge Nutrition (
OTO:FITX,
Stock Forum) is headed in the other direction. I’ve been warning investors for months that CEN is cutting corners and making promises that have no basis in reality, and for my troubles I got boatloads of hatemail, angry tweets, Facebook ridicule and even the occasional threat from anonymous sources that reeeeeally closely resembled communications I’ve had with CEO Bill Chabaan, who has been dumping his own personal shares for months now.
In fact, I’m told Chabaan had filed to dump another 18m shares in the past week.
The company said it had an MMPR in the bag months ago and it appears they don’t. They said they had zoning and approval from the town of Lakeshore Ontario to go ahead and build their dream grow op, but the town is telling them to stop work, and sending mail to Health Canada asking it to halt the application. And in a bizarre twist, Chabaan has engaged a Ukrainian law firm as it seeks to shove back against the town.
Stock price is cratering (it was $0.10 when I first started writing about it – it’s in the $0.03 range today) but, frankly, it’s hard to feel sorry for any bagholders right now. Even a cursory look at what has been written about the company should have warned this day was coming, and a half critical examination of the company communications over the last several months outlines so many missed milestones and failed promises that I just can’t figure out how anyone could have still been in it to see yesterday’s 20%+ plummet.
Fans of the company call me a ‘paid basher’ and claim I short the stock. I wish I’d shorted the stock, but that’s not how the code of conduct works at Stockhouse. For the record, I’ve never shorted any stock, ever. FITX is just bullshit, is all, and I’m paid to point out companies that are bullshit.
If anyone has a certificate for one single share in FITX, please send it to me. I’d like to frame it for the office wall while they still exist.
Inexco Mining (
CSE:C.IMC,
Stock Forum) is developing its business model.
See more here.
Matica Enterprises (
CSE:C.GRF,
Stock Forum) announced a ready to build on the
Nova Scotia facility it has signed a definitive agreement to acquire. The company REALLY wants me to come listen to what they have planned, so I’ll likely to do that Thursday and report back. To say management is excited would be an understatement. Imagine Rob Ford being given the keys to the Twinkie factory and being told to look after it over the long weekend… THAT excited. Stock currently halted.
Affinor Growers (
CSE:C.AFI,
Stock Forum) is doing an extensive round of LOIs with companies that may be interested in testing its vertical grow technology. I know of at least four companies that have either announced or are considering (or, in the case of one, have rejected) deals thus far. The big test will be whether any of them move to definitive agreements, as right now the LOIs aren’t moving the needle on stock price.
I’ve been critical of AFI over the last few months and think they have some hurdles to clear in order to really get value on the vert-tech, but credit where it’s due (and despite Chairman Brusatore’s recent/latest email to my boss whining about my coverage), they appear to be very focused on doing just that.
Got a deep dive on GeoNovus (
CSE:C.GNM,
Stock Forum) rumbling around the spellchecker at the moment, poised to be posted in the next 24 hours. I’ve been at the table through a lot of that company’s recent moves in the weed space, so it’ll be more revealing than many of my pieces. I’ve seen their draft revenue projections and their real struggle right now is they appear too good to be true.
Full disclosure: The company is a client of the consultancy I’m a partner in but, as always, I’ll not dodge their shortcomings in telling you its story.
Satori Resources (
TSX:V.BUD,
Stock Forum): Remember them? I told you a while back there were things in the works and I confirmed today that’s still the case. It’s been quiet times for them while they’ve been negotiating and doing DD on a few business options, but I’m told we may be a week away from some interesting ‘future directions’ news.
Company still holds a gold mine asset and is working through its fertilizer product development plan, but there’s more on the table. With the current share price at just $0.02, down from $0.07 when I last worked with them, it’s well and truly in gamblers’ territory.
Full disclosure: I own some V.BUD options.I think.
Pretty sure.Assume I do.
Easton Pharmaceuticals (
OTO:EAPH,
Stock Forum) put out a
letter to shareholders that, really, should have been vetted by someone familiar with punctuation. I counted the commas: In 1344 words, just 27 appear. Still waiting for them to follow through on their promise to
sue online critics for slander and libel. Apparently the company is preparing to go into business in every single possible related industry to the marijuana sector. If you’re looking to invest in a company that makes toothpicks for joints, little sponges for downpipes and Britta filters for bong water, this may be your target.
I get more messages from people who are ‘certain’ Umbral (
TSX:V.UMB,
Stock Forum) has big news coming than I do from all other companies put together. The 21,000 follower Twitter tout @WolfOfWeedStreet sent out today, “
$UMB it's almost time... let the countdown begin.” I have no inside info to share, just noting there’s a big promo push.
CRAiLAR Technologies (
TSX:V.CL,
Stock Forum): down nearly 80% in three months, with a 21.2% drop today.
Remember last week when I said Wildflower’s (
CSE:C.SUN,
Stock Forum) issues with some NIMBY neighbours was over? Fair call; I was premature.
Seems the Regional District of Nanaimo fired off a protest letter to Health Canada, asking that it reject Wildflower’s application for a grow facility, despite
receiving a letter from Wildflower’s lawyer pointing out there will be damages to be had should the district go ahead with plans to obstruct the company and damage its business potential.
One of the reasons the company is considering legal action is that the district explicitly told Wildflower it was free to set up shop on the property months before a band of local oldies decided reefer madness would kill them all, leading the district to change its mind after Wildflower had already set up shop.
I hear from Wildflower’s management team that it considers the reasoning for the protests to be ridiculous, with all the claims based on misinformation and fearmongering, and with full answers to all fears easily given.
Indeed, Tilray, one of Canada’s most successful medical marijuana companies, is just 8km away and having its second job fair. So far, Tilray has somehow managed to avoid destroying ecosystems and turning the area into a gangland hellhole.
Currently, Wildflower is going ahead with its plans happily, but should the district damage their reputation, business plans and ability to attract investors in any way, the company is prepared to seek damages and, frankly, I can’t see how they could lose.
FULL DISCLOSURE: Supreme, Organigram, GeoNovus, Wildflower and Inexco are Stockhouse Publishing clients.