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Buzz on the Bullboards: Who is Ready for the Post-Pandemic Boom?

Stockhouse Editorial
5 Comments| March 18, 2021

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(Image via Empower Clinics Inc.)

“The obstacle in the path becomes the path. Never forget, within every obstacle is an opportunity to improve our condition.”

The text from the 2014 Ryan Holiday book, “The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph” almost reads like a how-to for those who find themselves needing to extract the potential out of an unavoidable crisis.

The COVID-19 pandemic has put the investment spotlight on companies stepping up to the plate, from health care to tech.

What was once brushed off as a looming and uncertain threat had quickly become the new norm. COVID-19 has upended lives, businesses, and the entire world, and we’ll continue to deal with it, likely for years to come. However, even has our daily lives have been turned on its ear, some companies have factored into that change and been able to shine. From healthcare and technology innovations to industrials shakeups, the investors on the Stockhouse Bullboards have been digging through them all.

This week, we highlight three companies from three sectors that investors should be watching right now.

First up is Empower Clinics Inc. (CSE: CBDT, Forum), an integrated healthcare company serves patients through medical centres, telemedicine platforms and a high complexity medical diagnostics laboratory, that processes thousands of COVID-19 specimens.

It is the vision of CBDT Chief Executive Officer Steve McCauley to transform the Company into a integrated healthcare business that serves the Canadian and US markets.

Upon achieving $100 million revenues run rate within the next 24 months, investor attention has spiked to new levels. In his recent presentation at Wall Street Reporter’s “Next Super Stock” livestream, he explained that, in addition to its booming COVID lab testing business, Empower is launching a number of strategic growth initiatives which are expected to yield significant revenues over the next few years.

Through a partnership with a major pharmacy chain with more than 300 locations across Canada, Empower Clinics plans to roll out its healthcare clinics strategically located inside, or next to these pharmacies. Each of its clinics at these locations are expected to generate on average $3 million annually. The company has recently signed leases for the first three of these locations in Ontario, and new locations are expected to be opened at an increasing space over the coming months.

Moncton NB-based licensed cannabis producer Organigram Holdings Inc. (TSX: OGI, Forum) made some major news this week as British American Tobacco (NYSE: BTI) is set to acquire a near 20% stake in the company for roughly $221 million (CAD). The move comes less than a month after the company’s Chief Marketing Officer Kingsley Wheaton called CBD “an exciting growth area” for the company’s “business for the future.”

A BAT subsidiary has subscribed for approximately 58.3 million common shares of OGI, which represents a 19.9% equity interest on a post-transaction basis for total proceeds of approximately C$221 million at a price per share of C$3.792, based on a five-day volume weighted average price on the TSX ending March 9, 2021.

Greg Engel, Chief Executive Officer of Organigram, had this to say about the transaction:

“This is a tremendous milestone in the evolution of Organigram. It is instrumental in advancing our commitment to offering consumers innovative cannabis products and to furthering our long-term international strategy. We have been extremely selective about aligning with a strategic partner and, in BAT, we’ve found a leading consumer goods business with sophisticated management, innovative product platforms, an impressive dedication to research and development, deep consumer insights, regulatory expertise and a commitment to responsible stewardship and consumer safety among many other enviable attributes. This collaboration is the culmination of extensive discussions and workshops and in-depth due diligence.”

Investors have been keeping an eye on HEXO Corp. (TSX: HEXO, Forum) after the canna business won a complete dismissal of a US federal shareholder class action lawsuit. HEXO and certain of its current and former officers and directors were named in shareholder class action lawsuits filed in the Southern District of New York, the New York State Supreme Court, and the Province of Quebec.

The suits alleged that HEXO made material misstatements and omitted material information in prior disclosures to investors regarding various issues. These include estimated sales revenues during Q4 2019 and fiscal year 2020, its supply agreement with the Société Québécoise du Cannabis, and the facilities acquired from Newstrike.

In a 60-page opinion dated March 8, 2021, the Southern District of New York granted HEXO’s motion to dismiss “in its entirety.”

In other legal news, Xebec Adsorption Inc. (TSX-V: XBC, Forum) responded this week to being named in a class action lawsuit.
The lawsuit targets the clean energy solutions company, certain current directors and officers, and the underwriters of Xebec’s December 2020 bought deal public offering of subscription receipts by way of a short-form prospectus.

The claim alleges that Xebec made misrepresentations in the prospectus as well as in its disclosure documents for Q3 2020 with respect to revenue accounting practices and Xebec’s internal controls over financial reporting. The claim also alleges violation of, among other things, sections 218, 221 and 225.8 of the Quebec Securities Act. The lawsuit was initiated in the Québec Superior Court (Class Actions Division) in the District of Montréal.

Xebec believes it has conducted itself in accordance with all relevant securities laws and that the complaint against it is without merit.

Cielo Waste Solutions (CSE: CMC, Forum) is a waste to renewable fuel company with a game changing technology engineered to help solve the world’s garbage crisis. CMC provided investors with an update on its project with its joint venture partner Renewable U Energy Inc. (RUEI) to build, and commission three waste to high-grade renewable fuel facilities in British Columbia, Manitoba, and the United States.

President and CEO of Cielo, Don Allan, stated that they will build and operate even more facilities converting waste to high-grade renewable fuels.

“Cielo may be an Alberta-based company, but it has always been our vision to solve the extreme garbage crisis in all provinces of our great nation! This is another monumental step forward for our Company and its ability to reduce landfills and eliminate other problematic waste.”

CMC followed this news up with an update this week on an increase to the amount of its convertible loan from $10 million to $14 million (CAD).

(Image via Air Canada Inc.)

The country’s top airline, Air Canada Inc. (TSX: AC, Forum) set ambitious climate targets to realize a goal of net-zero greenhouse gas emissions (GHG) throughout its global operations by 2050. To reach this, Air Canada has set absolute midterm GHG net reduction targets by 2030 in its air and ground operations compared to its 2019 baseline and has committed to investing $50 Million in Sustainable Aviation Fuel (SAF), and carbon reductions and removals. AC is investing $50 Million in Sustainable Aviation Fuel (SAF) and carbon reductions and removals.

What the "Buzz"

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HPQ Silicon Resources Inc. (TSX-V: HPQ, Forum) is now trading on the OTCQX Best Market under the ticker symbol HPQFF.

The OTCQX Best Market is the highest market tier of OTC Markets, which operates financial markets for 11,000 US and global securities. Trading on OTCQX will enhance the company's visibility and accessibility to US investors. HPQ common shares will continue to trade on the TSX Venture Exchange under the symbol HPQ, and on the Frankfurt Stock Exchange under the symbol UGE. Upgrading to the OTCQX Market is an important step as it provides transparent trading in our shares for our US investors.

Chairman and CEO of HPQ Silicon Resources Inc., Bernard Tourillon hailed qualifying to trade on the OTCQX Best Market as quite the milestone.

“This will make it easier for U.S. investors to discover and invest in HPQ Silicon Resources Inc, as we continue our research, development and commercialization of advanced nanoscale silicon materials, in order to remain at the forefront of innovative processes for the storage and delivery of clean renewable energy.”

Mineral exploration and development company Ivanhoe Mines Ltd. (TSX: IVN, Forum) announced that the initial purchasers in its $500 million (USD) private placement offering have fully exercised the over-allotment option. The offering is now totalling $575 million (USD), with net proceeds from the offering approximately $562 million (USD).

The notes are senior unsecured obligations of the company which will accrue interest payable semi-annually in arrears at a rate of 2.50% per annum and will mature on April 15, 2026.

The initial conversion rate of the notes is 134.5682 Class A common shares per $1,000 (USD) principal amount of notes or an initial conversion price of approximately $7.43 (USD, $9.31 CAD) per common share.

Finally, Gran Colombia Gold Corp. (TSX: GCM, Forum) announced that it remains on track to produce between 200,000 and 220,000 ounces of gold in 2021 from its high-grade Segovia Operations in Antioquia, Colombia. In February 2021, Gran Colombia produced 15,354 ounces of gold and 18,922 ounces of silver at Segovia bringing the total for the first two months of the year to 30,415 ounces of gold and 37,519 ounces of silver.

The mid-tier gold producer processed 42,345 tonnes in February 2021 at its Segovia Operations, up from 41,426 tonnes last month, despite February being a shorter month. This represented a daily processing rate of 1,512 tonnes per day (tpd) in February, up from 1,336 tpd the month prior.

To our Investor Pulse Poll this week, it was Academy Award winning actor Brie Larson who once said that we work better when we set goals. How do you feel about your investment goals right now (if you have any)?

(Click image to vote.)

Taking a look at our poll from last week, while nearly a split decision, most of you have let go of your “COVID play” stocks since the pandemic began last March.

One thing that is abundantly clear in today’s market is that every week has brought new stories, and new companies, to the forefront. What potential diamond in the rough will the Stockhouse Bullboards find next week? For previous editions of Buzz on the Bullboards: click here.

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