Medical Marijuana Update: Kariana debuts as Lifestyle Delivery Systems (C.LDS)

The weed deal that has caused more broker/client turmoil than any other in the public markets this year finally debuted Wednesday as Kariana Resources flipped to LIFESTYLE DELIVERY SYSTEMS (CSE:C.LDS, Stock Forum) and resumed trading at a 400% premium to the financing price, touching $0.60 before settling back to $0.47 for much of the day.

Volume was light, considering the pounding on the door that was going on by those looking for a way into the $500k private placement round. That round closed at over $750k but the book was filled with subscription forms totalling some ten times that.

Limiting trading was the fact that the company changed names and ticker symbol on the morning it resumed trading, which really shouldn’t cause issues in this day and age but inevitably leaves online traders flailing as large brokerages fail to update their systems to accommodate the new data. Early reports suggest TD account holders were needing to phone in orders to get their shares, a situation that happens every time a symbol change meets a market debut.

Also not helping: the name change. While the street was crawling with Kariana talk and discussions about Cannastrips over the last several months, leading the stock to placement on many people’s watchlists, nobody had ever heard of Lifestyle Delivery Systems until today.

That said, nobody will complain about an instant four-bagger (even if it has since rolled back to a three-bagger), and LDS management says they don’t foresee any need for future financings as they expect revenue coming out of the gate. So you would expect, if the promises turn out to be true, that these will soon be considered the cheapie days.

In line with that thinking, and my belief that value-added cannabis plays are going to be sprinters in the following year, I picked some up this morning.

Value-added weed products play NUTRITIONAL HIGH (CSE:C.NHL, Stock Forum) listed on the OTCQB last week, opening up the investor base to a far wider market after taking the Canadian junior scene by storm last month.

The ticker symbol? SPLIF… Amazing. But the volume didn’t match expectations upon US debut, with the share price hovering pretty close to where it had spent the last week.

C.NHL blew the lid off in terms of volume when it IPOed on the CSE, leading all Canadian junior stocks with its business concept of moving into the Colorado edibles market with an automated, consistent, high quality, mainstream-branded product line.

CEO David Posner admitted to me last week that a lot of the wheel spinning of the stock in the early days was down to founder stage investors cashing in their profits.

“Oh sure, they doubled their money,” he said. “Daytraders too, they were all over it. The sort of volume we saw in the first few days of trading, you almost don’t want that. But we’re not obsessing over the share price right now. You could almost sell the company off for parts for more than the current market cap. Nobody in my circles is even thinking about selling. If it got to $0.15, we’re not selling.”

Posner tells me the company is aggressively working its way into other markets, with an Illinois dispensary on the way, an LOI with a New Mexico grower/value adder in the final stages of negotiation, and ongoing discussions with entities in Washington State, Nevada, Arizona and on the east coast.

While the company is known on Canadian markets for its Colorado edibles product and facility development, the majority of the one-hour discussion I had with Posner yesterday revolved around other value-add opportunities in areas such as extractions, delivery systems, and CannaPills, a product central to the New Mexico deal and which, once nailed down, would be a ready-to-go product in any state that C.NHL does business.

US investors may take a few weeks to catch on to the company, and it’s trading by appointment for a lot of potential investors at present. I get the impression the listing caught Nutritional High by surprise as they didn’t mention it to me when I talked to them a day earlier – but with weed analysts and Twitter touts such as The Wolf of Weed Street on side (the Wolf has been howling about the stock for days now), it should be a fast pick up.

Oh, and the process to lock down the Heisenberg Blue product name is progressing well, apparently, and not at all based on a certain TV series. At all.

Seriously.

I bought some stock in this company on the open market the day it landed and am planning on holding it until at least opening day on their Colorado factory. I’ll have more detail about C.NHL/SPLIF in the days to come as they expect a heavy news flow going forward, and I’ve also recorded a podcast with Posner that will debut any day now.

NATURALLY SPLENDID (TSX:V.NSP, Stock Forum) is crazy times of late. The company announced a partnership with POS Biosciences a few weeks back, which gave them access to a primo production plant that would allow them to scale their hemp omega production up quickly. They also got access to POSB’s vendor list, which is a who’s who in the food world.

Then they put out a purchase order that could see them selling $5m of product to Laguna Blends, which I wrote about a few days ago after I sampled their prototype products in their Vancouver offices.

Then NSP expanded their POSB partnership, actually purchasing the POSB facility, thereby locking it down good and proper and bringing on the ability to sell production capacity to others.

The stock? Not powering.

In fact, it’s been up and down in a fairly unpredictable way, though it has seemingly now settled in on a base of around $0.60 – down from the buck it touched recently, but way up from the $0.20 it lived at for the past two years. A nice launchpad for future moves?

Speaking of LAGUNA (trading as Grenadier - CSE:C.GAD, Stock Forum), they’ve been in touch regarding their upcoming products using the NSP technology and I expect news soon. They’re halted at the moment and will resume trading upon upcoming news.

Full disclosure: I’ve held NSP stock since it resumed trading a couple of months ago and went on its rip-roaring four-bagger run, and I’ve added on dips since.

GOLDEN LEAF (???:???, ???): Still waiting for this to land on an exchange. Unsure of whether they’re waiting for April revs to come in so they can show the 80% sales jump in March was no fluke, or if it’s just standard exchange paperwork delays. Another possibility: Oregon’s government is changing medical marijuana laws (some say for the worse) and they may impact how Golden Leaf does business.

That said, the first oil extractor on the market will be a big deal, and some big players are buying in. The listing has been on again off again since last year, but I hope to get some advance warning before it lands. Last I heard, it was opening with a $50m valuation, and some big investors have paid a premium on that figure to get in early.

SATORI RESOURCES (TSX:V.BUD, Stock Forum): For a moment last week Satori led the sector in percentage gains, climbing from half a cent to $0.015. Though it’s now back to a halfer, I was getting a lot of questions about whether ‘something was happening’ at Satori.

Here’s what I know: The company is going through an audit process this week. I know this because I have some options in the company from way back when and they needed a signature on something so they could complete the audit.

I do not know if that audit is preceding some big movement in some direction, like maybe the company gold project getting interest, or another weedco making a run at that ticker symbol through an RTO.

So, in short, I know nothing. But that’s more activity than the company has seen in a looong time..

TRUE LEAF (CSE:C.MJ, Stock Forum) is fighting through the jungle vines, working hard to establish their hemp-based pet nutrition product not just a reality, but one respected by the markets. And credit where it’s due, they’re putting pieces down to back their strategy.

Is that strategy working? Well, if you consider their share price was one long wiggly line moving down from $0.14 to $0.07 since they launched in February, and that over the last two weeks that line has kept wiggling but stopped dropping, then maybe so. Volume has picked up markedly and consistently.

The company announced it had secured manufacturing space last week.

CEO Darcy Bomford has 30 years of experience in the pet food biz and has taken products to market successfully before, and Chairman Mike Harcourt, the former premier of BC and mayor of Vancouver, has the tools to open doors.

The aforementioned manufacturing deal allows for True Leaf to get first right of refusal to take over the entire manufacturing facility at a later date, which may end up being a prudent piece of business.

Factor this in: The company has a large medical marijuana grow application in to Health Canada. Who knows where that will take them, but when that was all the company had, it was worth twice the market cap of today. Now the pet products plan is moving hard, you can pick it up at a 50% discount.

CANNIGISTICS AGRI-SOLUTIONS (TSX:V.CYX, Stock Forum) has been very quiet of late, but their stock price has been busy. A $0.02 stock just a month ago, it’s now trading at double that, and the balance sheet is a lot sweeter smelling than it has been previously. Still a tiny market cap, but someone knows something…

I’d love to have told you what it is they know, but I had to blow off a meeting with CYX President Roger Forde just now to get this piece posted. Hopefully will have news for you in a few days. Forde tells me they’ve been a little quiet of late due to exchange machinations, but that he’s ready to slip things into gear.

WORLDWIDE MARIJUANA (CSE:C.WWM, Stock Forum) is… I don’t know. I can’t get any information about what they’re doing right now. I had bought a chunk a few weeks back, but sold this morning to buy into LDS. I know Commander Bob has been all over hell’s half acre working on deals, and the stock has been inching upwards on fairly low volume. A news release would be a fine thing, even if I miss the resulting ride.

CHLORMET TECHNOLOGIES (CSE:C.PUF, Stock Forum) is the company I get asked most about. That’s possibly because it’s the company that has as much an appetite for news as it does ebola cookies. Last news came out in January.

KANEH BOSM (CSE:C.KBB, Stock Forum) has installed two weed vending machines with MedSmart Dispensary Incorporated. They’ll be taking a $2.50 transaction commission on each sale, which is nice, or at least will be after about 10,000 of those transactions brings the company back to what I assume will be break even on the cost of the machines.

So that sounds good. Digging a little, however, it starts to get cloudy. For instance, where is MedSmart Dispensary located? They don’t have a website nor any sort of online history, so I went through BC corporate records and found the company was only incorporated on April 2 of this year.

That was shortly before the city of Vancouver decided to get ornery with dispensaries.

Why’s that now? Well, dispensaries are considered criminal enterprises by the federal government and Health Canada, and the city of Vancouver has made clear (finally) that it plans to shut down the majority of them through new rules regarding proximity to schools, community centres, and other dispensaries, not to mention heavy permitting fees.

So, assuming Kaneh Bosm’s deal is with the above-mentioned outfit, you’re looking at there being every chance there will be no dispensary to do business with, if there’s even one today. The Kaneh Bosm press release announcing the deal was very shy of detail about where their machines will go so a cynic might even wonder aloud if MedSmart is an actual thing yet..

What I can’t figure out is how a public company can be trading on what is, by my analysis of it at least, an illegal activity. Sure, the law may change going forward but right now it’s pretty clear.

Either way, executives at the company tell me they’re convinced they’ll be receiving a deluge of free media publicity in the weeks ahead. I just wonder if it will be positive or negative..

A while back, one of the founders of MEDCANNACCESS, which is a (legal) medical marijuana patient referral network that was much anticipated to go public until it was snatched up by Peace Naturals recently, told me there are no immediate plans to venture into the Vancouver clinic space, due to the wild west nature of what’s doing business in the city now.

But in view of the moves to shut down the majority of the dispensaries, I checked back to see if any changes to that thinking were forthcoming.

“We’re keeping a close eye on things,” was the best I could get.

MedCannAccess’ business model provides, according to their website:

· Individualized support navigating Health Canada’s MMPR application process
· Referrals to complimentary supports as needed
· Demonstrations of vapourizers
· Sales of vapourizers to persons authorized under the MMAR or MMPR
· Customized presentations for patients, care providers, educators, social service agencies, and members of the medical field

For mine, the simplest thing for a dispensary to do to remain in business is to get the weed out of the window, focus on walking patients through the prescription process, refer them to the appropriate LP and that LP’s appropriate product, and exist off delivery system sales and commissions.

Sure, that’ll mean no more $5 vape hits for folks walking in off the street, and no more prescriptions performed by Skype doctors located in India, or ‘naturopaths’ that fight in local MMA events on weekends. And there’d sure be a lot of ‘patient growers’ out there stuck with trash bags full of ‘medicine’ that they suddenly can’t move. But it’d be legal, profitable (as MedCannAccess has shown), and the market could begin to finally find its feet.

Meanwhile, the CBC found some Vancouver dispensaries are run not just by people with criminal records, but criminal records for trafficking, including one with a cocaine dealing conviction and others with charges currently before the courts.

Five years ago, a study in Colorado found over half of all dispensaries were run by people with criminal records.

Tell me more about these high standards you have, dispensary folk.

WILDFLOWER MARIJUANA (CSE:C.SUN, Stock Forum) released news that it has struck an LOI to license a new US-produced vaporizer product that, it says, is comparable in price to made in China alternatives, with no need for hands on labour and potential harmful products and systems.

The news didn’t supercharge the share price, possibly because its limited to Washington State, but it does demonstrate the C.SUN shop is becoming a bit of a news and licensing factory.

President and CEO William MacLean insists this is the most advanced vape product out there (and one he’s not averse to busting out at any and every opportunity), but the vape space if pretty darn competitive, so investors will want to see the numbers associated with the deal before they start doubling down.

That said, Wildflower stock is more than four times the price it was in February, when I was pounding the table telling y’all that $0.06 was a ridiculously low price for what was coming.

CREATIVE EDGE NUTRITION (OTO:FITX, Stock Forum): Still under investigation, still a pump and dump, still trading under a penny, and yet still churningout bullshitpress releases.

INMED PHARMACEUTICALS (CSE:C.IN, Stock Forum) keeps banging outthe news, and the most recent piece to go out was a barnburner.

InMed, which has been increasingly mentioned in rumours involving the prospect of GW Pharma (NASDAQ:GWPH, Stock Forum) coming in to acquire them of late, has convinced former GW investor, director and financier Peter Mountford to come on as a strategic advisor.

Mountford was a big part of the 2001 GW IPO, and that company has since grown to a $2.1 billion market cap.

To compare the two companies, if you equalized the relative shares outstanding totals, for the $108.79 per share GW costs right now, InMed would cost $0.50. And GW just closed a $179.2m raise.

I’m not saying there’s a deal here. I’m just saying, if a deal were to be done, these things would all likely happen ahead of time. And that’s why I’m not selling my C.IN stock.

Also holding INVICTUS MD STRATEGIES (CSE:C.IMH, Stock Forum), and their newsflow over the last week is a big part of why.

The company has rejigged the old Cannabis Health Journal print brand, releasing a new website to support it.

It has also upped its stake in Future Harvest, an established and revenue earning retail subsidiary that serves the grow industry, to 33.75%, with a view to increasing that to 75% by October of this year based on EBITDA goals. CEO Dan Kriznic revealed today that Future Harvest has been hitting ‘revenue and profit records’ since Invictus came in to streamline the operation.

That’d be plenty of happenings to sate most investors, but the company has also announced that its affiliate Edison Vape has filed for and received confirmation of a U.S. provisional patent for the invention ‘Vaporizer Apparatus, Device and Methods.’

Invictus owns 40% of Edison Vape, which expects to have prototypes of their proprietary devices ready by the summer, and has an option to take out the remaining 60% at a later date.

Refreshingly, Invictus is very quickly establishing its legitimacy, having delivered on a lot of promises just in the last month, and having moved several of their affiliates in a forward direction in quick time. My view on the company is that it’s becoming the antithesis of a marijuana company, delivering strong results based on real business acumen, and as they continue to demonstrate the power of their team, other potential partners will come looking for them.

I had a long chat with Kriznik last week and, frankly, he’s like a Formula One driver on the Autobahn, trapped behind church traffic. Once he gets a glimpse of open road, you won’t see Kriznik for the wall of tire screeching smoke he leaves behind him.

Finally, I’m hearing on the grapevine one company has big news regarding an MMPR license approval, which isn’t just good for that company, but also indicates Health Canada is back in the license approval business. Praise Allah and keep your powder dry.

--Chris Parry

https://www.twitter.com/chrisparry

FULL DISCLOSURE: The following companies mentioned in this article are marketing clients of Stockhouse Publishing: Nutritional High, Naturally Splendid, True Leaf, Cannigistics, Worldwide Marijuana, Wildflower Marijuana, Inmed Pharmaceuticals, Invictus MD.
The author has invested or consulted for the following companies: Lifestyle Delivery Systems, Nutritional High, Naturally Splendid, Worldwide Marijuana, InMed, Invictus MD.