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mar1huana stocks
- Autor del tema The Fucking Andyteleco
- Fecha de inicio
Adicto
Madmaxista
- Desde
- 21 May 2007
- Mensajes
- 17.360
- Fruta
- 17.825
No, ese no es mi armario.
Si calopez tendria un foro decente que dejara subir archivos desde el pc te pondria alguna foto.
Mi armario tiene 50x50x70.
6 puntos luminicos de 27W cada uno, en total unos 160W. 4 bombillas de 2700k y 2 de 6400k.
6 plantas en tiestos de 3 litros, las cuales me dan entre 10 y 20 gr. planta cada 3 meses, dependiendo la genetica y posicion en el armario.
Gasto cero coma cinco en grow shops. Solamente compro los abonos de floracion.
De media 14 horas al dia encendido....1 mes a 18 y dos a 12.
90 dias x 14 horas x 160w/1000 x 0,15 €kw = 30,24 € todo el ciclo. Hechale un par de eurillos mas por la extraccion de 15w que tengo y que no llega a las 2 horas al dia.
Que algunos necesiteis cooltubes, reflectantes parabolicos, estimulantes de raices (WTF) y demas guano que venden a precio de oro a los incautos, no quiere decir que con buena mano y pocos recursos no se pueda sacar algo aceptable, que siempre puedes completar con alguna automatica balconera.
De nada.
No lo estás haciendo del todo bien.
Si usaras bombillas de bajo consumo de 200w (realmente consumen un poco menos, como 185w). Estamos hablando que una cosecha necesita 233kwh eso a 0,12 €/kwh + impuestos son unos 35 € (antes la electricidad era más cara). Y eso que no contamos con el gasto de los extractores, que 2 horas puede ser ahora que no hace calor, pero en verano la cosa cambia. La temperatura afecta a la productividad.
Tu producción es muy baja, se podría doblar con mejores medios, lo cuál se amortiza con el tiempo. ¿Estás hablando de peso de material ya seco y limpio?
Yo no te recomendaría mezclar luz de crecimiento y floración, o sólo 1 o sólo otra, desperdicias energía.
Los abonos son baratos y aumentan la productividad a un coste ridículo y no hace falta comprarlos en un growshop.
Lo que realmente me intriga es saber qué plantas, si son feminizadas ya tienes que tener en cuenta un gasto de 3-4 € por semilla o si te da las dan gratis asumir el riesgo de que te salga un macho.
The Ing Andyteleco
Bubble Er
- Desde
- 5 Nov 2009
- Mensajes
- 14.588
- Fruta
- 39.966
Seguimos con la escalada (ATTBF cerró a $2.21 el viernes 😀) y parece que se avecinan más movimientos en el mercado canadiense. He aquí un interesante artículo de SeekingAlpha:
Mar1 Stocks: This Year, April 1 Will Be The New 4/20
Summary
The Medical Mar1 Purposes Regulations (MMPR) program positions Canadian companies at the forefront to meet mar1 demand as more countries deregulate the drug.
Two Canadian companies, ENRT, ATTBF, plan to have MMPR licenses and are currently traded on the open market.
Tweed Inc, which has a MMPR, plans to be the first publicly traded company that legally sells mar1.
FITX is spending $16 million to build a new facility from scratch while its competitors are acquiring larger, preexisting facilities to grow mar1 for fractions of the cost.
Making History
It is not a prank. Come April 1st, not only will Canada's MMPR program roll-out but also Uruguay's* legalization of mar1 will take effect. Investors can smell the green. While investors in the US are patting themselves on the back for monumental Colorado and Washington, these countries are implementing historic reform that will change the face of the mar1 business, forever.
Canada, ahead of the curve
I've mentioned this before but it bears repeating: Canada's Medical Mar1 Purposes Regulations (MMPR) program is a game changer. MMPR allows corporations to legally grow, sell, ship, and destroy mar1. It also allows businesses to export and import the green machine. As more countries deregulate the herb, Canada will be at the forefront to meet the demand.
There are many exciting players in this industry, some of which are already public. I'll look at four companies: Enertopia, Cen Biotech of Creative Edge Nutrition, Tweed, and Abattis Bioceuticals. With the exception of Tweed, each company is traded publicly. Tweed bears mentioning because of its plan to go public. Each company presents a nice pitch, making investors salivate at the prospects. I'll try to be as fair as possible.
This list is not exhaustive. Everyday there are new players. Although 'new' is not quite the right word. There has not been a 'new' mar1 company for a while. Since most of the new players are not really 'new,' I would approach with caution. Before investing in any of these companies spend some time looking at past filings. For Canadian companies, go to sedar.com. For US, go to sec.gov. Always do your own due diligence. This is not my money you are investing. It's yours.
Enertopia (OTCQB:ENRT) and The Green Canvas
The name 'Enertopia' will soon become familiar to most Canadian pot-stock investors. I have written about Enertopia previously, expressing a strong degree of caution. Enertopia hopes to capitalize on this industry through its strategic partners 'The Green Canvas' (TGC) and 'World of Hierba' (WOM). According to the CEO of Enertopia, Robert McAllister, both companies have 'a long history' working with patients under Canada's old medical mar1 program.
Tim Selenski of Green Canvas has supplied mar1 to his community in Regina, Saskatchewan for 13 years. Mr. Selenski has been a longtime advocate of mar1 patients. As an advocate, Mr. Selenski has gone on the record expressing his apprehensions regarding the ethicacy of the new system. Despite this, Mr. Selenski has joined forces with Mr. McAllister.
Partnering with Mr. Selenski I believe is a strong move for Enertopia. IF Mr. Selenski gets an MMPR license, Enertopia has a shot. His community relations put Enertopia in a strategic position to retain Mr. Selenski's loyal trinc.
I have been criticized previously for not discussing World of Hierba. I've avoided it precisely because of the uncertainty of its existence prior to November 9, 2013, the same day WOM launched its website. I also have concerns regarding the background of the people involved: Matt Chadwick and Fred Otchere. I would greatly appreciate any background information prior to November 9th. Another concern is that on October 4, 2013, Robert signed a consulting agreement with Olibri Acquisitions to assist with "oil & gas exploration." A month later Enertopia goes into the mar1 business.
Alan Brochstein, of 420investor, recently interviewed CEO Mr. McAllister. This exposure will definitely help 'pump' Enertopia's stock price. In fact, this is not the only publicity Enertopia has sought. Shareholders are currently paying for a, "Market Awareness" program with Agoracom to "raise the brand awareness of Enertopia among small-cap investors." If you are a believer in the 'pump', I believe there is a way to play this. But I warn more conservative, inexperienced investors to approach with caution.
Tweed Inc.
There's not much to say about this company except that expect it to explode when it goes public. Tweed Inc. plans to go public through a reverse merger with LW Capital, listed on the TSX exchange. In case you were wondering, yes LW Capital's shares are closed for trading and will not be peine until it is public. The date of its offering has not been disclosed, as of yet.
The Canadian investor community highly anticipates a successful launch for Tweed. Unlike Enertopia, Tweed has its MMPR license and expects its crops will be ready by April 1st. Tweed's 150,000 square foot facility was once the home of a Hershey's Chocolate factory. In contrast, Enertopia's facility is significantly smaller, and only has 60,000 square feet. At full capacity, Tweed's facility can grow up to 15 million grams of weed.
At the rate it's taking for other companies to get their licenses, Tweed will be the first publicly traded MMPR licensed producer. The company projects revenues of $100 million within the first two years.
Cen Biotech, a Subsidiary of Creative Edge Nutrition (OTCPK:FITX)
Cen Biotech has enjoyed considerable coverage in market news, partly from its incessant announcements of plans to capitalize on the Canadian market.
I'll be frank. The enthusiasm for Cen Biotech is a bit mind-boggling. I understand the enthusiasm for the industry, but I don't understand the logic of investing in a company that posts pictures of large tracts of dirt. I get the picture-pogre motif. This is to reassure investors that there will be a facility. Even though I am not a big fan of Enertopia, at least they have a facility.
Cen Biotech's planned facility when completed is expected to be 58,000 square feet, which will sit adjacent to Creative Edge's 26,000 square foot facility.
CEO of Creative Edge Nutrition, Bill Chaaban, has spent a considerable sum on marketing the stock. The company seems very concerned with reminding investors of its big plans. From holding 'Open Houses' to redundant daily updates, it is suggestive that Mr. Chaaban has concerns of losing its investor enthusiasm. Now, Cen Biotech has resorted to releasing daily updates to discuss previous updates. For instance, the company issued a press release on March 11, 2014 reminding investors that on February 26, 2014 it has received "the first right of purchase of a pharmacy license in the State of Michigan" with its partner RXNB Inc. Essentially: there is no license, yet.
Back in Canada, Cen Biotech also anticipates that it will receive its MMPR license. Unfortunately, it will be unable to do so until it has a facility up and running that meet necessary security requirements. Unable to meet security requirements has precluded many MMPR applicants from receiving their licenses. The concern over security was the main justification for the MMPR program. Individual growers were felt to be unable to afford the security system necessary to control the black market. Requiring companies to install state of the art security hopes to mitigate that. (Investors should also look into the security industry in Canada).
Then there is the issue of costs. Building from scratch is a risky and costly move. Cen Biotech claims that will cost them $16 million to put together the facility. In contrast, Tweed spent only $5 million acquiring their $100 million Hershey Factory. Additionally, Zenabis of International Herbs Medical Mar1 Ltd, will acquire the former Atlantic Yarns 400,000 square foot facility in northern New Brunswick. It seems the smarter players are acquiring existing facilities rather than building from scratch.
Finally, Creative Edge is not cheap. There are currently 3.5 billion shares authorized, 3,417,417,549 of which are outstanding and only 2,295,374,724 billion in the public float. Additionally, there are 1 million preferred shares, 500,000 of which have a 5000:1 voting right. That leaves 1,122,042,825 restricted shares. As Creative Edge will only be able to issue an additional 82.5 million shares, in the event it needs to raise additional capital its options are limited to executing a reverse split, a forward split, or authorizing additional shares. This could cause significant dilution.
With that said, Growlife's (OTCQB😛HOT) 25% equity position in Cen Biotech is comforting. And as the picture-timeline of the facility becomes more facility and less mud, I can see speculators injecting new capital into this stock. But as investors are anxiously trying to determine the winner, they might 'swing' to other more established MMPR licensed producers, and reconsider Cen Biotech after it completes its facility.
As a hedging strategy, it might be more advantageous at this point to invest in the Canadian market indirectly through Growlife rather than through Cen Biotech. Through their partnership, GrowLife will issue to designated CEN Biotech shareholders a total of 235,294,118 shares of restricted GrowLife common stock. Although I would have preferred Growlife pick a partner with more certainty, the partnership has definitely pumped new speculation into these stocks. For more thorough coverage of Growlife, you can click the link to read an argument for 'short' position versus a 'long' position.
Abattis Bioceuticals Inc. (OTCPK:ATTBF)
Abattis gives investors something to be bullish for. Of course I want to stress that investors should approach with caution. This stock exploded in the last month and I can tell investors have been scratching their heads trying to figure out why.
This company deserves its own write-up. As I've already covered this company before, I try not to be redundant. There are a lot of positives here.
Abattis is five companies in one. This is a "hedging strategy" in order to work in the current legal market. However, CEO of Abattis, Mike Withrow, has structured his company so that it can capitalize in a fully legalized market. Their main strategy, "GDERS," which stands for "Grow, Dry, Extract, Refine, Sell," is not only to diversify in this emerging market, but also maximize profits as an importer/exporter. The five subsidiaries of Abattis are:
Biocube Green Grow has developed a modular unit, the "BioCube," that is 16x16x8, which can grow up to 240 plants in a single unit. The "Biocube" equipment is designed to modulate 240 plants individually to get the desired THC/CBD levels in the product. The 'BioCubes' are not only for growing hierba but can be used with any type of plant life. Biocube is the 'Grow and Dry' portion of the 'GDERS' strategy. Additionally, Abattis' Biocube has recently acquired Green-Gro ltd. proprietary fertilizer formulae and juices. In exchange Green-Gro happily accepted 300,000 shares of Abattis. There are currently twenty-five stores throughout California, Oregon, Washington, and Colorado that carry Green-Gro products.
Biocell Labs has a lease on a 13 million dollar facility, which will be used primarily for the 'refining' and 'selling.' Biocell has access to flash-freeze technology. In the world of hierba refinement, flash-freeze will be able to extract CBDs without damaging the purity of the product. Biocell has applied for a license for the purgenesis facility.
Northern Vine is set up for neutraceuticals. This subsidiary of Abattis has an import/export relation with China. This company has applied for a controlled substance license. Northern Vine has partnered with Experion Biotechnologies Inc., which has received a zoning permit to grow medical mar1.
The other subsidiaries are: iJuana Hierba, which has applied for an MMPR license; and North American Vine, which extracts neutraceutical products.
I would be highly suspicious of any company that says invest in us because we have a lot of subsidiaries. That is not why I invest in this company. I invest in the people.
I recommend checking the other members of Abattis. For now, I want to introduce Dr. Michelle Sens and Dr. Kaleb Lund, newest additions to the Abattis team. Dr. Sens is the founder of Phytalabs based in Washington State. Dr. Lund is the scientific director of Phytalabs. Phytalabs is an I-502 registered and compliant facility for the testing of CBDs and related plant compounds. Dr. Sens is one of the co-authors of I-502, the bill that legalized mar1 in Washington. Dr. Sens has been a longtime expert in the field of natural medicine and medical mar1.
A concern for investors might be that Abattis has doubled their share-count from 30 million to 62 million. This issuance was to grant incentivizing stock options for many of the companies and consultants listed above as well as to raise capital to pay off existing debts. The company now has 3.1 million in the bank and is debt free. The goal of Abattis is to work with multiple producers but be the single point of contact for consumers.
I see the strengths of Abattis as trinc:
Experienced and knowledgeable team
Unique Technology
Exclusive Patents
Hedging Strategy
"GDERS" Business model
Debt free
Fully reporting (through sedar.com)
3.1 million in the bank
Weakness:
Still acquiring key licenses
I believe Abattis has developed a strategy to set it apart from the other players. Whereas Enertopia, Tweed, Zenabis, and Cen Biotech are mainly focusing on producing, Abattis has structured a multilayered approach to capitalize on both producing and cultivation. I am very bullish on this company.
Conclusions
There are a several logical fallacies when it comes to markets: if company 'A' is destined to fail, then its competitor, company 'B,' will succeed; and conversely, if 'A' succeeds, then 'B' will fail. The belief is predicated on the faulty assumption that only one can succeed. In fact, it works just the opposite. Although competition can knock out competing players, 'the rising tide lifts all ships.' And conversely, a tsunami can sink them all. That tsunami of course would be the re-incivil of mar1.
Nevertheless, investors want to be able to portend who will have the edge. More important than having the largest facility, Canadian mar1 market will be won out by the player who most understands that this is about patients and medicine. This is the rhetoric that pushed legislation through to legalize medicinal mar1. Capturing the market will depend on the player's ability to brand itself as a caregiver. The old branding of mar1 relied on illicit sounding names to suggest the strains' potency. In the biopharma market, building customer relations with patients is primarily about trust. This trust is built on the belief that the producer has the patient's wellbeing in mind.
This market is bubbling because of anticipation. In fact, nearly all of the stocks that have announced plans to enter the mar1 industry have seen their stock jump. Some more than others. Mar1 investors should be less concerned with trying to predict the winner. If this industry is successful, the legitimate companies will succeed. The mar1 economy is dependent on the mutual success of all the players involved. At this point, it is only a matter of deciphering which companies are strategically utilizing capital and which ones are just playing with mud.
*Note: Uruguay's role is important and it deserves coverage. I hope to research this in a trinc article. On December 10th of last year, Uruguay, as you might recall, was the first country to officially legalize mar1. The government estimates that the underground market traffics $40 million a year in mar1 sales. Because this is a much smaller market, I recommend looking into funds that deal with real estate or export/import.
Editor's Note: This article covers a stock trading at less than $1 per share and/or has less than a $100 million market cap. Please be aware of the risks associated with these stocks.
Additional disclosure: I have no positions in FITX, PHOT, ENRT. I may initiate a position in ENRT and possibly PHOT.
Resumiendo: hay que estar pendiente de la salida a bolsa de Tweed, y quizá considere tomar una posición en Enertopia
Tienes que estar registrado para ver este contenido
Mar1 Stocks: This Year, April 1 Will Be The New 4/20
Summary
The Medical Mar1 Purposes Regulations (MMPR) program positions Canadian companies at the forefront to meet mar1 demand as more countries deregulate the drug.
Two Canadian companies, ENRT, ATTBF, plan to have MMPR licenses and are currently traded on the open market.
Tweed Inc, which has a MMPR, plans to be the first publicly traded company that legally sells mar1.
FITX is spending $16 million to build a new facility from scratch while its competitors are acquiring larger, preexisting facilities to grow mar1 for fractions of the cost.
Making History
It is not a prank. Come April 1st, not only will Canada's MMPR program roll-out but also Uruguay's* legalization of mar1 will take effect. Investors can smell the green. While investors in the US are patting themselves on the back for monumental Colorado and Washington, these countries are implementing historic reform that will change the face of the mar1 business, forever.
Canada, ahead of the curve
I've mentioned this before but it bears repeating: Canada's Medical Mar1 Purposes Regulations (MMPR) program is a game changer. MMPR allows corporations to legally grow, sell, ship, and destroy mar1. It also allows businesses to export and import the green machine. As more countries deregulate the herb, Canada will be at the forefront to meet the demand.
There are many exciting players in this industry, some of which are already public. I'll look at four companies: Enertopia, Cen Biotech of Creative Edge Nutrition, Tweed, and Abattis Bioceuticals. With the exception of Tweed, each company is traded publicly. Tweed bears mentioning because of its plan to go public. Each company presents a nice pitch, making investors salivate at the prospects. I'll try to be as fair as possible.
This list is not exhaustive. Everyday there are new players. Although 'new' is not quite the right word. There has not been a 'new' mar1 company for a while. Since most of the new players are not really 'new,' I would approach with caution. Before investing in any of these companies spend some time looking at past filings. For Canadian companies, go to sedar.com. For US, go to sec.gov. Always do your own due diligence. This is not my money you are investing. It's yours.
Enertopia (OTCQB:ENRT) and The Green Canvas
The name 'Enertopia' will soon become familiar to most Canadian pot-stock investors. I have written about Enertopia previously, expressing a strong degree of caution. Enertopia hopes to capitalize on this industry through its strategic partners 'The Green Canvas' (TGC) and 'World of Hierba' (WOM). According to the CEO of Enertopia, Robert McAllister, both companies have 'a long history' working with patients under Canada's old medical mar1 program.
Tim Selenski of Green Canvas has supplied mar1 to his community in Regina, Saskatchewan for 13 years. Mr. Selenski has been a longtime advocate of mar1 patients. As an advocate, Mr. Selenski has gone on the record expressing his apprehensions regarding the ethicacy of the new system. Despite this, Mr. Selenski has joined forces with Mr. McAllister.
Partnering with Mr. Selenski I believe is a strong move for Enertopia. IF Mr. Selenski gets an MMPR license, Enertopia has a shot. His community relations put Enertopia in a strategic position to retain Mr. Selenski's loyal trinc.
I have been criticized previously for not discussing World of Hierba. I've avoided it precisely because of the uncertainty of its existence prior to November 9, 2013, the same day WOM launched its website. I also have concerns regarding the background of the people involved: Matt Chadwick and Fred Otchere. I would greatly appreciate any background information prior to November 9th. Another concern is that on October 4, 2013, Robert signed a consulting agreement with Olibri Acquisitions to assist with "oil & gas exploration." A month later Enertopia goes into the mar1 business.
Alan Brochstein, of 420investor, recently interviewed CEO Mr. McAllister. This exposure will definitely help 'pump' Enertopia's stock price. In fact, this is not the only publicity Enertopia has sought. Shareholders are currently paying for a, "Market Awareness" program with Agoracom to "raise the brand awareness of Enertopia among small-cap investors." If you are a believer in the 'pump', I believe there is a way to play this. But I warn more conservative, inexperienced investors to approach with caution.
Tweed Inc.
There's not much to say about this company except that expect it to explode when it goes public. Tweed Inc. plans to go public through a reverse merger with LW Capital, listed on the TSX exchange. In case you were wondering, yes LW Capital's shares are closed for trading and will not be peine until it is public. The date of its offering has not been disclosed, as of yet.
The Canadian investor community highly anticipates a successful launch for Tweed. Unlike Enertopia, Tweed has its MMPR license and expects its crops will be ready by April 1st. Tweed's 150,000 square foot facility was once the home of a Hershey's Chocolate factory. In contrast, Enertopia's facility is significantly smaller, and only has 60,000 square feet. At full capacity, Tweed's facility can grow up to 15 million grams of weed.
At the rate it's taking for other companies to get their licenses, Tweed will be the first publicly traded MMPR licensed producer. The company projects revenues of $100 million within the first two years.
Cen Biotech, a Subsidiary of Creative Edge Nutrition (OTCPK:FITX)
Cen Biotech has enjoyed considerable coverage in market news, partly from its incessant announcements of plans to capitalize on the Canadian market.
I'll be frank. The enthusiasm for Cen Biotech is a bit mind-boggling. I understand the enthusiasm for the industry, but I don't understand the logic of investing in a company that posts pictures of large tracts of dirt. I get the picture-pogre motif. This is to reassure investors that there will be a facility. Even though I am not a big fan of Enertopia, at least they have a facility.
Cen Biotech's planned facility when completed is expected to be 58,000 square feet, which will sit adjacent to Creative Edge's 26,000 square foot facility.
CEO of Creative Edge Nutrition, Bill Chaaban, has spent a considerable sum on marketing the stock. The company seems very concerned with reminding investors of its big plans. From holding 'Open Houses' to redundant daily updates, it is suggestive that Mr. Chaaban has concerns of losing its investor enthusiasm. Now, Cen Biotech has resorted to releasing daily updates to discuss previous updates. For instance, the company issued a press release on March 11, 2014 reminding investors that on February 26, 2014 it has received "the first right of purchase of a pharmacy license in the State of Michigan" with its partner RXNB Inc. Essentially: there is no license, yet.
Back in Canada, Cen Biotech also anticipates that it will receive its MMPR license. Unfortunately, it will be unable to do so until it has a facility up and running that meet necessary security requirements. Unable to meet security requirements has precluded many MMPR applicants from receiving their licenses. The concern over security was the main justification for the MMPR program. Individual growers were felt to be unable to afford the security system necessary to control the black market. Requiring companies to install state of the art security hopes to mitigate that. (Investors should also look into the security industry in Canada).
Then there is the issue of costs. Building from scratch is a risky and costly move. Cen Biotech claims that will cost them $16 million to put together the facility. In contrast, Tweed spent only $5 million acquiring their $100 million Hershey Factory. Additionally, Zenabis of International Herbs Medical Mar1 Ltd, will acquire the former Atlantic Yarns 400,000 square foot facility in northern New Brunswick. It seems the smarter players are acquiring existing facilities rather than building from scratch.
Finally, Creative Edge is not cheap. There are currently 3.5 billion shares authorized, 3,417,417,549 of which are outstanding and only 2,295,374,724 billion in the public float. Additionally, there are 1 million preferred shares, 500,000 of which have a 5000:1 voting right. That leaves 1,122,042,825 restricted shares. As Creative Edge will only be able to issue an additional 82.5 million shares, in the event it needs to raise additional capital its options are limited to executing a reverse split, a forward split, or authorizing additional shares. This could cause significant dilution.
With that said, Growlife's (OTCQB😛HOT) 25% equity position in Cen Biotech is comforting. And as the picture-timeline of the facility becomes more facility and less mud, I can see speculators injecting new capital into this stock. But as investors are anxiously trying to determine the winner, they might 'swing' to other more established MMPR licensed producers, and reconsider Cen Biotech after it completes its facility.
As a hedging strategy, it might be more advantageous at this point to invest in the Canadian market indirectly through Growlife rather than through Cen Biotech. Through their partnership, GrowLife will issue to designated CEN Biotech shareholders a total of 235,294,118 shares of restricted GrowLife common stock. Although I would have preferred Growlife pick a partner with more certainty, the partnership has definitely pumped new speculation into these stocks. For more thorough coverage of Growlife, you can click the link to read an argument for 'short' position versus a 'long' position.
Abattis Bioceuticals Inc. (OTCPK:ATTBF)
Abattis gives investors something to be bullish for. Of course I want to stress that investors should approach with caution. This stock exploded in the last month and I can tell investors have been scratching their heads trying to figure out why.
This company deserves its own write-up. As I've already covered this company before, I try not to be redundant. There are a lot of positives here.
Abattis is five companies in one. This is a "hedging strategy" in order to work in the current legal market. However, CEO of Abattis, Mike Withrow, has structured his company so that it can capitalize in a fully legalized market. Their main strategy, "GDERS," which stands for "Grow, Dry, Extract, Refine, Sell," is not only to diversify in this emerging market, but also maximize profits as an importer/exporter. The five subsidiaries of Abattis are:
Biocube Green Grow has developed a modular unit, the "BioCube," that is 16x16x8, which can grow up to 240 plants in a single unit. The "Biocube" equipment is designed to modulate 240 plants individually to get the desired THC/CBD levels in the product. The 'BioCubes' are not only for growing hierba but can be used with any type of plant life. Biocube is the 'Grow and Dry' portion of the 'GDERS' strategy. Additionally, Abattis' Biocube has recently acquired Green-Gro ltd. proprietary fertilizer formulae and juices. In exchange Green-Gro happily accepted 300,000 shares of Abattis. There are currently twenty-five stores throughout California, Oregon, Washington, and Colorado that carry Green-Gro products.
Biocell Labs has a lease on a 13 million dollar facility, which will be used primarily for the 'refining' and 'selling.' Biocell has access to flash-freeze technology. In the world of hierba refinement, flash-freeze will be able to extract CBDs without damaging the purity of the product. Biocell has applied for a license for the purgenesis facility.
Northern Vine is set up for neutraceuticals. This subsidiary of Abattis has an import/export relation with China. This company has applied for a controlled substance license. Northern Vine has partnered with Experion Biotechnologies Inc., which has received a zoning permit to grow medical mar1.
The other subsidiaries are: iJuana Hierba, which has applied for an MMPR license; and North American Vine, which extracts neutraceutical products.
I would be highly suspicious of any company that says invest in us because we have a lot of subsidiaries. That is not why I invest in this company. I invest in the people.
I recommend checking the other members of Abattis. For now, I want to introduce Dr. Michelle Sens and Dr. Kaleb Lund, newest additions to the Abattis team. Dr. Sens is the founder of Phytalabs based in Washington State. Dr. Lund is the scientific director of Phytalabs. Phytalabs is an I-502 registered and compliant facility for the testing of CBDs and related plant compounds. Dr. Sens is one of the co-authors of I-502, the bill that legalized mar1 in Washington. Dr. Sens has been a longtime expert in the field of natural medicine and medical mar1.
A concern for investors might be that Abattis has doubled their share-count from 30 million to 62 million. This issuance was to grant incentivizing stock options for many of the companies and consultants listed above as well as to raise capital to pay off existing debts. The company now has 3.1 million in the bank and is debt free. The goal of Abattis is to work with multiple producers but be the single point of contact for consumers.
I see the strengths of Abattis as trinc:
Experienced and knowledgeable team
Unique Technology
Exclusive Patents
Hedging Strategy
"GDERS" Business model
Debt free
Fully reporting (through sedar.com)
3.1 million in the bank
Weakness:
Still acquiring key licenses
I believe Abattis has developed a strategy to set it apart from the other players. Whereas Enertopia, Tweed, Zenabis, and Cen Biotech are mainly focusing on producing, Abattis has structured a multilayered approach to capitalize on both producing and cultivation. I am very bullish on this company.
Conclusions
There are a several logical fallacies when it comes to markets: if company 'A' is destined to fail, then its competitor, company 'B,' will succeed; and conversely, if 'A' succeeds, then 'B' will fail. The belief is predicated on the faulty assumption that only one can succeed. In fact, it works just the opposite. Although competition can knock out competing players, 'the rising tide lifts all ships.' And conversely, a tsunami can sink them all. That tsunami of course would be the re-incivil of mar1.
Nevertheless, investors want to be able to portend who will have the edge. More important than having the largest facility, Canadian mar1 market will be won out by the player who most understands that this is about patients and medicine. This is the rhetoric that pushed legislation through to legalize medicinal mar1. Capturing the market will depend on the player's ability to brand itself as a caregiver. The old branding of mar1 relied on illicit sounding names to suggest the strains' potency. In the biopharma market, building customer relations with patients is primarily about trust. This trust is built on the belief that the producer has the patient's wellbeing in mind.
This market is bubbling because of anticipation. In fact, nearly all of the stocks that have announced plans to enter the mar1 industry have seen their stock jump. Some more than others. Mar1 investors should be less concerned with trying to predict the winner. If this industry is successful, the legitimate companies will succeed. The mar1 economy is dependent on the mutual success of all the players involved. At this point, it is only a matter of deciphering which companies are strategically utilizing capital and which ones are just playing with mud.
*Note: Uruguay's role is important and it deserves coverage. I hope to research this in a trinc article. On December 10th of last year, Uruguay, as you might recall, was the first country to officially legalize mar1. The government estimates that the underground market traffics $40 million a year in mar1 sales. Because this is a much smaller market, I recommend looking into funds that deal with real estate or export/import.
Editor's Note: This article covers a stock trading at less than $1 per share and/or has less than a $100 million market cap. Please be aware of the risks associated with these stocks.
Additional disclosure: I have no positions in FITX, PHOT, ENRT. I may initiate a position in ENRT and possibly PHOT.
Resumiendo: hay que estar pendiente de la salida a bolsa de Tweed, y quizá considere tomar una posición en Enertopia
LDK
Baneado
¿7? Estás seguro?
¿que focos?
Gracias
Focos LED.
The Ing Andyteleco
Bubble Er
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Ayer me salí de ATTBF a $2 ya que veo una fuerte resistencia a ese nivel y creo que habrá una corrección.
Mientras diversifico un poco en otros sectores y sigo pendiente de la IPO de Tweed.
Mientras diversifico un poco en otros sectores y sigo pendiente de la IPO de Tweed.
judas iskariote
Madmaxista
Efectivamente. Ademas, con el desarrollo de cultivos industriales de alta eficiencia es previsible que baje el precio final del producto (cuyo precio ademas esta actualmente elevado por el factor riesgo) haciendo que el autocultivo sea menos rentable (excepto si uno es un sibarita, claro).
Y aparte del consumo recreativo tambien hay que tener en cuenta los usos medicos y el aprovechamiento de la planta de cañamo para la confeccion de tejidos.
P.D. hace mucho tiempo que no fumo nada pero ahora si me entran ganas de hacerme un canutito para celebrar esta operacion 🙂
Y segun tengo entendido, el rendimiento por hectarea para producir biocombustibles es superior a la soja, maiz, etc...
Lo lei en la revista Cañamo hace algunos años, por lo que puede que sea una informacion un tanto sesgada.
judas iskariote
Madmaxista
Ya lo dice calamaro.
Que verde que amanece con mar1, que facil que parece el porvenir....
Que verde que amanece con mar1, que facil que parece el porvenir....
The Ing Andyteleco
Bubble Er
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Hace un par de horas salio a la venta Tweed. No he estado muy atento y he llegado un poco tarde entrando a $3.14 que creo que no esta mal considerando que salio a $2.50 y con el furor inicial se puso a $4.60 en un momento
Enviado desde mi GT-I9100 mediante Tapatalk
Enviado desde mi GT-I9100 mediante Tapatalk
The Ing Andyteleco
Bubble Er
- Desde
- 5 Nov 2009
- Mensajes
- 14.588
- Fruta
- 39.966
The Ing Andyteleco
Bubble Er
- Desde
- 5 Nov 2009
- Mensajes
- 14.588
- Fruta
- 39.966
El gran ganador del día está siendo Medican (
Summary
Medican Inc. is seeking to acquire a 50% stake in IHMML, which is acquiring two facilities at 393,000sqft. and 293,000sqft that will be able to extend to 900,000 sqft.
Medican Inc. represents one of the strongest "speculative" Canadian plays for investors in the US.
The Canadian mar1 market may have been grossly underestimated with a potential market capitalization of $2-4 billion.
A new organization called the Canadian National Medical Mar1 Association (CNMMA) has stamped Medican with approval along with IHL and Zenabis.
In the Canadian mar1 market: size matters. Even the darling of the mar1 market (Tweed) will seem pint size next to Medican.
Over the past month, several publicly traded companies jumping in on the "Canadian Hierba Craze" have caught our attention: Enertopia (OTCQB:ENRT), Creative Edge Nutrition (OTCPK:FITX), Next Gen Metals (OTCPK:NXTTF), Abattis Bioceuticals (OTCPK:ATTBF), and Modern Mobility Aids (OTCPK:MDRM). There is one restless giant, however, that has not had its fair share of the spotlight. And boy, does it need it.
Medican Inc. (OTCQB:MDCN): A Giant in our Midst
If you have been paying attention to headlines coming out of Canada, you would have heard about a company called "Zenabis" and their plan to acquire a 393,000 square foot facility for medical mar1 production. News like this makes investors drool. I briefly discussed this company in a previous article. What I didn't mention was that the company behind this acquisition has been Medican Enterprises. Medican might be the most ambitious player in the Canadian scene. If it succeeds, a few years from now investors will say, "Tweed who?"
The story begins last year on June 25, 2013. Kenneth Williams, a veteran of Michigan's Medical Mar1 Program, bought out a Nevada based shell, TC X Calibur Inc., for the very purpose of running a publicly traded Canadian MMPR firm. From this moment on, Mr. Williams has worked tirelessly to assemble an experienced team, accrue essential assets, and form strategic partnerships in order to create a medical mar1 empire.
The story is impressive. But investors should be forewarned: the only tangible asset that Medican can boast is ownership of Hierba Magazine. The company publishes Hierba Magazine online and in hard copy form, which is distributed for free in over 4000 medical hierba locations throughout the United States. Nevertheless, I still think there is strong evidence to be bullish.
Team: The Mar1 Aficionados
Medican boasts one of the most impressive teams of any of the publicly traded Canadian mar1 companies.
Board of Directors
The honorable Gary Johnson, two-term governor of New Mexico, serves as a director of Medican Inc. In addition to starting a successful multimillion-dollar enterprise, the honorable libertarian has been a longtime advocate for mar1 legalization. You may remember Gary Johnson as the 2012 libertarian presidential candidate who won .99% of the vote.
Michael Thompson has been involved in the medical mar1 industry as a licensed provider since early 2012.
Management
Kris Klassen President. According to his bio, Mr. Klassen has "over 15 years experience in the medical mar1 industry." Disclaimer: this information is unverifiable.
Wayne Hansen CFO
Bal Sandu, P. Eng., COO.
Danny Camele, VP Marketing
Research and Development
Laila Benkrima, Ph.D, is Medican's chief horticulturalist. Dr. Benkrima is an expert in chemical hybridizing agents in wheat. Dr. Benkrima is not an expert in medical mar1. She is currently a research associate at BCIT in the Natural Health & Food Products Research Center for Applied Research and Innovation.
Renee Priya Prasad, Ph.D, Sr. Production Manager. Dr. Prasad is a specialist in pest control. Again, it is important to note that Dr. Prasad is not an expert in mar1 pest control. Dr. Prasad is a highly experienced entomologist with over 18 years of experience in cranberry crop control.
Manessha Jaitly, Ph.D., Quality Assurance Manager
Although a very knowledgeable team, it is questionable that these scientists are agreeing to apply their expertise to mar1 cultivation. Dr. Benkrima is a "wheat" specialist; Dr. Prasad is a "cranberry" specialist. As I am not an expert in any of the related fields, I do not know whether the fields are that different and that the R&D team will be unable to apply their horticultural expertise to medical mar1.
Advisory Board
David Tobias, founder of Hemp Inc. and Hierba Sativa Inc.
Rick Brar, President and CEO of IHL
Kevin Coft, General Manager at IHL
Sam Perera, MBA, CAIA Founding partner at Lion Financial Group (LFG)
Some investors might be uncomfortable with the name David Tobias attached to the firm. However, I am fairly confident that he will benefit Medican immensely since he does have extensive experience in the field of publicly traded mar1 stocks.
It is clear that Mr. Williams has put together a distinguished team. Most of the Medican team boasts years of experience in the business of mar1 cultivation, production, and sales. This is the kind of team I feel comfortable investing in.
The Management Agreement
Although an experienced staff is comforting, there is only one reason to invest in Medican Inc.: their partnership with International Herbs Ltd's subsidiary ("IHL"), IHMML. Kevin Coft, General Manager of IHL, has gone on to create IHMML (International Herb Medical Mar1 Ltd) branded as Zenabis. Zenabis is in the process of acquiring a 393,000 square foot facility in Atholville, New Brunswick.
A Couple of Hiccups
It is clear from the filings that Mr. Williams has always had his sights set on Canada. Towards the end of 2013, Medican founded two subsidiaries:
Median Systems, Inc., a Yukon corporation
Medican (Delta) Systems, Inc., a British Columbia corporation.
Medican Delta was essentially established to obtain a Medical Hierba Purposes Regulations (MMPR) producer license. Medican Delta signed a management services agreement with International Herbs Ltd. (IHL) and Lions Financial Group (LFG) for the purposes of promoting and assisting Medican Delta to obtain an MMPR license.
Hiccup #1: IHMML Going Rogue
Since the agreement, it is suggestive that IHMML went rogue and decided to acquire a facility for itself. Most likely because of strict rules preventing US based shell companies from acquiring the MMPR licenses. Medican Inc. still wanted in.
Resolution: "Amended Agreement"
On March 13, 2014, Medican, LFG, and IHL entered into an "Amended Management Services Agreement." Under the terms of the "Amended Management Services Agreement" IHL and LFG agreed to cooperate and work together to promote and develop the business of Medican CanaLeaf and to assist Medican partnering with IHMML, a company that is applying to obtain licensed producer status from Health Canada through its subsidiary Zenabis.
Hiccup #2: A Nonbinding "LOI"
It has already been all over the news that Zenabis is in the process of acquiring a 393,000 square foot facility. Not wanting to lose out on its meal ticket, Medican on March 24, 2014 entered into a nonbinding Letter of Agreement (LOI) with IHMML to become a 50% holder of IHMML by way of subscription for 41,600,000 common shares of IHMML for an aggregate subscription price of $52,000,000.
*393,000 square foot facility in Atholville
The proceeds of the deal will be used by IHMML to complete not only the purchase of the 393,000 square foot facility in Atholville, New Brunswick which has 300,000 square feet of grow space, but also an additional second building in Poekmouche, New Brunswick, which is a 273,000 square foot facility with the potential to expand to a total 600,000 square feet. This means an initial total of 593,000 square feet for cultivation with the potential to have 900,000 square feet.
900,000 Square Feet Mar1 Facility
Medican essentially will be the 50% owner of 900,000 square feet of mar1 cultivation space, or 450,000 square feet. To give you an idea of the profitability of owning a 900,000 sq ft. facility:
Medican Inc. & IHMML
Tweed Inc. (TWMJF)
Est. square footage
900,000 sq. ft.
150,000 sq. ft.
Conservative: 1 plant per 9 sq. ft.
100,000 plants
16,500 plants
Maximum: 1 plant per sq. ft
900,000 plants
150,000 plants
Average annual yield of 200 grams of dry bud per plant
20,000 to 180,000 kilograms
3,300 to 30,000 kilograms
Average sales at $7 (CAD) a gram
$140 million to $1.26 billion
$23.1 to $210 million
Est. pounds per yield
44,150 to 396,832 lbs
7,285 to 66,138 lbs
Est. revenues
50% adj. $70-630 million
$23.1 to $210 million
Est. costs of electricity at $238 per lb
~$10,507,700 to ~$94,446,016
~$1,733,775 to ~$15,740,844
Est. gross profits
$59,492,300 to $535,553,984
$21,366,225 to $194,259,156
Realistic est. revenues at 68 grams per sqft. 50% adj. $214.2 million $71.4 million
Realistic costs 50% adj ~$32.1 million ~$5,4.million
Gross Profits 50% adj. $182.1 million $66 million
**The above figures are estimates and do not reflect actual yields or earnings. They may be much higher or lower depending on the given circumstances, yields, and facility utilization. I assume 5 harvests, annually yielding 40 grams per plant per harvest for a total of 200 grams per year.
As you can see, the numbers yield a wildly large range. This should help investors understand what goes into investing into an agricultural company that has limited space and resources. The slightest misstep in space utilization or production inefficiency can yield grossly divergent results.
Additionally, nearly all MMPR firms have agreed to offer compassionate pricing to patients living in households with under $30,000 a year in income. This will affect the return on investment.
Although the above figures are merely estimates, no matter what Medican Inc. potentially stands to yield 3x more in revenues than Tweed Inc. This is not to say that Medican will also be more efficient at keeping costs of production and overhead low. Furthermore, Medican has only signed a nonbinding agreement with IHMML. If IHMML can come up with the capital itself, it may not have use for Medican.
Seal of Approval
Medican and IHMML are not only setting themselves apart by acquiring the largest facilities for growing medical mar1. They have also joined an organization called the Canadian National Medical Mar1 Association (CNMMA). The CNMMA stamps companies with a "seal of approval" for upholding stringent MMPR guidelines. As a result, it has made itself the coveted ersatz endorsement needed to assuage investors and patients alike.
(click to enlarge)
It is interesting that IHL is CNMMA approved, since it plans on entering the mar1 sector only through a subsidiary. It is unclear why IHL would also receive this stamp of approval.
(click to enlarge)
Disclaimer: There is no publicly available information regarding the legitimacy of the CNMMA. Several attempts have been made to contact the CNMMA without success.
Zenabis Approved
With so many companies desperately finding ways of distinguishing themselves from the competition, the CNMMA brand gives the impression that these companies are certified and trustworthy. To the untrained eye, this seal of approval seems like an unbiased legitimation of the company's authenticity. However, without full disclosure of the CNMMA's independent board, investors should pause before demanding that their MMPR firms also receive their CNMMA membership.
And finally Medican, along with Zenabis and IHL, also has the CNMMA stamp of approval. I must admit that it is tantalizing that a publicly traded company in the US had a Canadian CNMMA stamp of approval, even if I doubt the legitimacy of the CNMMA, it does give Medican the allure of having more legitimacy than the other Canadian players. Tweed does not even have the CNMMA stamp.
Market Outlook
MDCN
FITX
ENRT
(TSXV: TWD)
ATTBF
Share price*
2.75
.082
.51
2.59
1.48
Outstanding Shares
33,616,040
3,417,417,54
87,233,072
32,042,612
57,831,082
Proposed Facility Size
900,000 sq. ft.
58,000 sq. ft.
60,000 sq. ft.
150,000 sq. ft.
N/A
Authorized Share Count
100 million
3.5 billion
200 million
35 million***
62 million***
Market Cap
90.75 million
280.19 million
45.24 million
82.99 million
84.36 million
Adjusted Share Price**
0.908
2.802
0.452
.83
.76 (US)
0.854
**April 4th, 2014
**Adjusted share price at 100 million shares
***Canadian law allows for unlimited authorized shares but it has been suggested that this is the 'cap'
On an adjusted per share basis FITX is the most expensive. The combined market cap of ENRT, MDCN, ATTBF, and TWD equals 296 million, roughly 16 million more than FITX. This may be surprising because it is by far the "cheapest" of the five companies.
Remember a share price can "look cheap" that does not miccionan the company is cheap. Even though the share price of MDCN "appears" 2,647.7% greater than FITX, the actual per share cost of FITX is 384.6% greater than MDCN.
One can interpret FITX as "market perform," which would suggest the other companies are currently undervalued. I would not endorse this interpretation. Value is interpretative and I'll leave it to the more savvy fundamental analysts to determine intrinsic values.
Overall, I believe Medican has the most potential out of all the publicly trading MMPR plays. Although Tweed actually boasts a license and a facility, Medican has the potential to be 3X bigger.
Canada versus the US
Use
Canada: 3,015,000 10.2% of population 15+
US: 25,768,000 9.6% of adult population 15+
Canadian consumption
US consumption
Estimated casual 45%
.6 grams p/year
1,356,750
11,595,600
814,050 g
6,957,360
Estimated regular users 41%
15 grams p/year
1,236,150
10,564,880
18,542,250 g
158,473,200 g
Estimated daily users 9%
320 grams p/year
271,350*
2,319,120
86,832,000 g
8,245,760,000g
Estimated chronic users 4%
1,825 grams p/year
120,600*
1,030,720
220,095,000 g
47,026,600,000 g
Estimated totals
3,015,000
25,768,000
326,283,300 g
55,438,035,105 g
At $7 a gram
108 grams p/year
$2.283 billion
$38.806 billion
n/a
n/a
Estimated 391,950* core MMPR patients
783 grams p/year
$2.148 billion
n/a
n/a
n/a
*The Canadian Centre on Substance Abuse (CCSA) estimates that 25% of mar1 users over the age of 15 consume daily. If 25% of Canadian mar1 users consume daily, I believe that the core market equals 753,000 daily and chronic users. 753,000 users is nearly double the above estimates. Maintaining a similar distribution, I estimate there are perhaps 225,900 chronic users and 527,100 daily users. That is 7.7% chronic users and 17.28% daily users out of 3 million Canadians who reported using mar1.
I believe the core Canadian market comprises of the approximately 753,000 people who use mar1 daily and will therefore utilize the legal and accessible MMPR program. And since 7% of Canadian physicians support prescribing medical mar1, this will make it easier for a larger portion of mar1 users to be able to obtain physician prescriptions.
With 225,900 chronic users and 527,100 daily users, that would miccionan 580,940 kilograms consumed. If this was purchased through the market at $7 a gram, that would yield total annual revenues of $4.067 billion in the Canadian market. This figure sounds more reasonable since the CCSA has stated that in 2002 the illegal mar1 market was estimated to be approximately $8.2 billion.
But let us not get ahead of ourselves. Returning to the original estimates, in the event that 25,600 patients under the MMAR system are able to keep growing for personal that still leaves the low estimate of 356,350 chronic and daily users. If the additional 12,000 licensed users continue to buy from the 4,200 that are licensed to grow for a maximum of 2 patients that will miccionan 37,000 will not participate in the MMPR program.
Let's say that the 37,000 MMAR patients are all chronic users. That would still leave 83,600 purchasing an average 1,825 grams p/year and 271,350 purchasing 320 grams p/year to yield a $1.675 billion market for users who were unable to access legal mar1 under the old system. This is a conservative estimate.
On the other hand, if my estimates are correct-that there is a greater percentage of chronic and daily users in Canada-then the market is potentially $3.594 billion. In both scenarios, I reduce revenues by $473 million, which should account for the 37,000 patients allowed to keep their MMAR licenses and consuming 1,825 grams p/year.
This research is limited because it does not consider whether current total MMPR licensed producers have the facility capacity to fulfill the annual of 529,107 to 1.28 million pounds of mar1 needed to satisfy this "core" market.
Medican Inc.: The Nevada Shell Game
A huge issue for potential shareholders of Medican is the seemingly 25,000% increase in stock price. Well, there actually hasn't been a "25k" increase. Stock prices tend to act funny after the shell is taken over by an ambitious company (compare this with Charter Communications (CHTR), for instance, which went from .10 a share to $35 a share).
(Below: What a shell looks like before it resumes trading. Click to enlarge)
On June 25, 2013 Kenneth Williams entered into a series of Stock Purchase Agreements with Jenson Services and several other minority shareholders through which Mr. Williams collectively purchased 858,946 shares of TC X Calibur, Inc., representing approximately 65% of the outstanding common stock of the Company, for total consideration of $96,500.77, making the entire company worth about $130,276.04. This information was released to the public in an 8-K. As the chart indicates above, the stock price remained unchanged from June 25 to September 17th, 2013.
On September 18th, 2013, the company announced in an 8-K that it has changed its name to Medican Enterprises Inc.
On September 24, 2013, shareholders of record were entitled to a 20:1 dividend split increasing the outstanding shares to 26,501,240, which went ex on September 26, 2013.
On January 1st, 2014, Medican amends its October 1st, 2013 8-K to inform its shareholders of its plans to become a licensed MMPR in Canada for the purposes of medical mar1 production.
(MDCN Resumes trading. Price jumps to .50. click to enlarge)
MDCN data by YCharts
From the date of the stock dividend to the announcement of plans to enter the Canadian mar1 market the stock price dropped 18.1% in value.
(MMPR announcement. Still very light volume. Click to enlarge)
MDCN data by YCharts
Within 3 days of the announcement, the share price shoots up to $2.55 on January 24th, 2014 on a volume of 126,000 shares. It closes at $1.99.
The price jump from $0.35 a share on the 21st to $1.99 on the 24th represents a 569% increase. The price drops down to $1.32 on February 24th before bouncing and hitting a high of $3.83.
I think we can dismiss the 25,000% increase as the effect of a shell-takeover since no trading actually occurred from the company's reorganization until the 20:1 stock dividend. Arguably the stock is up 700% from 0.35 since the reorganization.
Ken Williams procured this company precisely because it was a cheap shell, based in Nevada. Nevada has become the hub for shells because of its loose regulations giving it the "Offshore Advantage" for tax evasion, since corporate taxes are unheard of in Nevada. This will be highly beneficial for shareholders because it will miccionan higher profit retention. This was clearly a strategic move to do business in Canada while avoiding costly taxes. Another company, MDRM Canada Ltd., also chose to procure a Nevada based shell for similar reasons.
(The price jump from 0.35 to $2 occurred on relatively low volume. Click to enlarge)
In fact, when I look at this chart I only see two major purchases: one at .90 and another at $2. The volume by price indicator suggests that 61k shares were bought at .90 on January 23rd, and 126k shares bought at $1.99 on January 24th (The price did drop to $1.50 the trinc Monday, most likely because a new shareholder was willing to sell their shares at that price, perhaps open market). What this tells me is that major shareholders will be unwilling to sell their shares for anything less than $1 moving forward. But I don't believe we will ever get near that $1.50 to $2 price range again. Since February 24th, this stock remained above $2.
With an average volume of 18k, MDCN sees only .07% of its total outstanding shares traded daily.
Thinking about a 700% jump in context of Medican's plan to raise $52 million ($47.32 million US), it seems clear to me that Mr. Williams may have had a hand in boosting share price. It would be ideal for the price to stay above the $3+ range in order to raise enough money to pay for the 50% stake in IHMML without considerable shareholder dilution. I believe investors have an incentive to keep the share price where it is at. At current price, shareholders may see a maximum of 16 million issuance of shares to raise money for the agreement. That would bring the current outstanding shares to 50 million.
But if the deal goes through, shareholders will potentially see a conservative $164 million in annual revenues. I see this as a worthy risk. I believe revenues can go up as much as $573 million if Medican Inc. plays its cards right. In that case, I'd say $3 a share is a bargain. I expect that shareholders in the mar1 industry won't mind paying a small premium now for exponential rewards in the coming years.
Conclusions
There is nothing conclusive now. Medican is still a long way away from the MMPR license. But this one is a great speculative play. If they are able to accomplish what they are setting out to accomplish, they will be the biggest player in the MMPR scene.
I do not doubt for a second that Medican and IHMML will do whatever they can to enter the MMPR market. Even if you decide not to invest in Medican, there's still a way for you to make money from Medican Inc. Zenabis is looking to hire 1,000 people for their facility in Atholville.
(click to enlarge)
This company is very serious about becoming a powerful player in the MMPR scene and I'll be joining them for the ride.
I am very bullish on the Canadian market, but it is still speculative. The possibility of patients continuing to access medical mar1 through illicit channels and that there is no cap on the amount of MMPR licenses that will be approved with 600 pending applications makes any investment very risky.
Furthermore, the changeover to MMPR will be gradual. It is my expectation that Canadian producers will be in full swing within 2-5 years. Hopefully by that time, other countries will decide to legalize.
The US mar1 market in my estimates represents a $38.8 billion market. If the time comes when the US legalizes mar1 for medical purposes, we might see Canadian producers making up for shortages. If that time comes, we will definitely see the Canadian market grow.
At the same time, the estimated $7 a gram most likely will not hold. As competition increases, we will most likely see prices drop.
Medican looks like it is building up for the long haul. If Medican and IHMML finalize their agreement, this team will become the largest producer in the market. This is a speculative play with lots of uncertainties.
Without a facility and without a license, Medican is not that different from the rest of the public companies except for the "nonbinding LOI" and the CNMMA stamp of approval. But since tangible assets and revenues don't determine the mar1 market, Medican represents the most exciting speculative play.
Final Thoughts
"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." -Warren Buffett
The last few weeks have not been positive for the mar1 sector. The recent plunge of pumped up stocks like Vapor Group Inc. (OTCQB:SPLI) and Minerco Resources (OTCQB:MINE) should make potential investors more cautious before jumping into this market. I believe the irrational pumping mixed with irrational exuberance has led to unhealthy volatility.
The sector is beginning to look like one big pump-fest manufactured by young, inexperienced traders who saw the value of their investments skyrocket 1,000%-45,000% and believed themselves to now be intelligent traders. As the reality is settling in that gains are not earned until realized, investors might take more pains to do individual research before throwing their money at a company that sends out press releases about the "potential mar1 market."
Investors should take caution before investing in a stock just because you saw someone mention the ticker symbol in a twitter post or in a Seeking Alpha article. It is important for you to do your own due diligence. To quote Buffett again, "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well." - Warren Buffett
Social media is unfortunately being used to pump up stocks (good or bad), rather than to give solid investment advice and analysis. If you feel the need to repeatedly send out tweets with ticker symbols telling investors to "buy the dip," what you are doing is contributing to a negative investment environment where the market as a whole suffers. Investors, realize that people sending out these tweets either are a) nervous that they might never be able to flip their investment or b) day traders who buy low, sell for a moderate profit, re-buy after it dipped and now need you to front more cash to help them make additional returns.
With that said, I'll go so far as this recent downturn has been a gift for the contrarian investor. The combination of several underperforming companies plunging and dragging along some of the more fruta ones with the news of MMAR being allowed to continue has provided a necessary correction. Prices of some valuable stocks have been reduced or kept low because investors are now hesitant about risking their money in the Canadian market.
If my conservative estimates are correct, then there is still a $1.675 billion mar1 market for the taking. If my more bullish estimates are correct, we are looking at a potential $4 billion market under MMPR. 37,000 patients in my estimates does leave out a potential $473 million market. But the fact of the matter is only 25,600 are actually allowed to grow for personal use. That is still a rough $372 million not being captured. But I am not betting on $372 million. I am betting $1.6-$4 billion
As a contrarian, I guess all I can say is, "Thank you Canada. Thank you investors."
Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
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) con una subida de 22% hasta ahora. Por desgracia no pude entrar a través de mi broker por unos motivos que no entendí muy bien (me explicaron que las acciones no se podían comprar en Europa, algo que me sonó un poco raro).
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Summary
Medican Inc. is seeking to acquire a 50% stake in IHMML, which is acquiring two facilities at 393,000sqft. and 293,000sqft that will be able to extend to 900,000 sqft.
Medican Inc. represents one of the strongest "speculative" Canadian plays for investors in the US.
The Canadian mar1 market may have been grossly underestimated with a potential market capitalization of $2-4 billion.
A new organization called the Canadian National Medical Mar1 Association (CNMMA) has stamped Medican with approval along with IHL and Zenabis.
In the Canadian mar1 market: size matters. Even the darling of the mar1 market (Tweed) will seem pint size next to Medican.
Over the past month, several publicly traded companies jumping in on the "Canadian Hierba Craze" have caught our attention: Enertopia (OTCQB:ENRT), Creative Edge Nutrition (OTCPK:FITX), Next Gen Metals (OTCPK:NXTTF), Abattis Bioceuticals (OTCPK:ATTBF), and Modern Mobility Aids (OTCPK:MDRM). There is one restless giant, however, that has not had its fair share of the spotlight. And boy, does it need it.
Medican Inc. (OTCQB:MDCN): A Giant in our Midst
If you have been paying attention to headlines coming out of Canada, you would have heard about a company called "Zenabis" and their plan to acquire a 393,000 square foot facility for medical mar1 production. News like this makes investors drool. I briefly discussed this company in a previous article. What I didn't mention was that the company behind this acquisition has been Medican Enterprises. Medican might be the most ambitious player in the Canadian scene. If it succeeds, a few years from now investors will say, "Tweed who?"
The story begins last year on June 25, 2013. Kenneth Williams, a veteran of Michigan's Medical Mar1 Program, bought out a Nevada based shell, TC X Calibur Inc., for the very purpose of running a publicly traded Canadian MMPR firm. From this moment on, Mr. Williams has worked tirelessly to assemble an experienced team, accrue essential assets, and form strategic partnerships in order to create a medical mar1 empire.
The story is impressive. But investors should be forewarned: the only tangible asset that Medican can boast is ownership of Hierba Magazine. The company publishes Hierba Magazine online and in hard copy form, which is distributed for free in over 4000 medical hierba locations throughout the United States. Nevertheless, I still think there is strong evidence to be bullish.
Team: The Mar1 Aficionados
Medican boasts one of the most impressive teams of any of the publicly traded Canadian mar1 companies.
Board of Directors
The honorable Gary Johnson, two-term governor of New Mexico, serves as a director of Medican Inc. In addition to starting a successful multimillion-dollar enterprise, the honorable libertarian has been a longtime advocate for mar1 legalization. You may remember Gary Johnson as the 2012 libertarian presidential candidate who won .99% of the vote.
Michael Thompson has been involved in the medical mar1 industry as a licensed provider since early 2012.
Management
Kris Klassen President. According to his bio, Mr. Klassen has "over 15 years experience in the medical mar1 industry." Disclaimer: this information is unverifiable.
Wayne Hansen CFO
Bal Sandu, P. Eng., COO.
Danny Camele, VP Marketing
Research and Development
Laila Benkrima, Ph.D, is Medican's chief horticulturalist. Dr. Benkrima is an expert in chemical hybridizing agents in wheat. Dr. Benkrima is not an expert in medical mar1. She is currently a research associate at BCIT in the Natural Health & Food Products Research Center for Applied Research and Innovation.
Renee Priya Prasad, Ph.D, Sr. Production Manager. Dr. Prasad is a specialist in pest control. Again, it is important to note that Dr. Prasad is not an expert in mar1 pest control. Dr. Prasad is a highly experienced entomologist with over 18 years of experience in cranberry crop control.
Manessha Jaitly, Ph.D., Quality Assurance Manager
Although a very knowledgeable team, it is questionable that these scientists are agreeing to apply their expertise to mar1 cultivation. Dr. Benkrima is a "wheat" specialist; Dr. Prasad is a "cranberry" specialist. As I am not an expert in any of the related fields, I do not know whether the fields are that different and that the R&D team will be unable to apply their horticultural expertise to medical mar1.
Advisory Board
David Tobias, founder of Hemp Inc. and Hierba Sativa Inc.
Rick Brar, President and CEO of IHL
Kevin Coft, General Manager at IHL
Sam Perera, MBA, CAIA Founding partner at Lion Financial Group (LFG)
Some investors might be uncomfortable with the name David Tobias attached to the firm. However, I am fairly confident that he will benefit Medican immensely since he does have extensive experience in the field of publicly traded mar1 stocks.
It is clear that Mr. Williams has put together a distinguished team. Most of the Medican team boasts years of experience in the business of mar1 cultivation, production, and sales. This is the kind of team I feel comfortable investing in.
The Management Agreement
Although an experienced staff is comforting, there is only one reason to invest in Medican Inc.: their partnership with International Herbs Ltd's subsidiary ("IHL"), IHMML. Kevin Coft, General Manager of IHL, has gone on to create IHMML (International Herb Medical Mar1 Ltd) branded as Zenabis. Zenabis is in the process of acquiring a 393,000 square foot facility in Atholville, New Brunswick.
A Couple of Hiccups
It is clear from the filings that Mr. Williams has always had his sights set on Canada. Towards the end of 2013, Medican founded two subsidiaries:
Median Systems, Inc., a Yukon corporation
Medican (Delta) Systems, Inc., a British Columbia corporation.
Medican Delta was essentially established to obtain a Medical Hierba Purposes Regulations (MMPR) producer license. Medican Delta signed a management services agreement with International Herbs Ltd. (IHL) and Lions Financial Group (LFG) for the purposes of promoting and assisting Medican Delta to obtain an MMPR license.
Hiccup #1: IHMML Going Rogue
Since the agreement, it is suggestive that IHMML went rogue and decided to acquire a facility for itself. Most likely because of strict rules preventing US based shell companies from acquiring the MMPR licenses. Medican Inc. still wanted in.
Resolution: "Amended Agreement"
On March 13, 2014, Medican, LFG, and IHL entered into an "Amended Management Services Agreement." Under the terms of the "Amended Management Services Agreement" IHL and LFG agreed to cooperate and work together to promote and develop the business of Medican CanaLeaf and to assist Medican partnering with IHMML, a company that is applying to obtain licensed producer status from Health Canada through its subsidiary Zenabis.
Hiccup #2: A Nonbinding "LOI"
It has already been all over the news that Zenabis is in the process of acquiring a 393,000 square foot facility. Not wanting to lose out on its meal ticket, Medican on March 24, 2014 entered into a nonbinding Letter of Agreement (LOI) with IHMML to become a 50% holder of IHMML by way of subscription for 41,600,000 common shares of IHMML for an aggregate subscription price of $52,000,000.
*393,000 square foot facility in Atholville
The proceeds of the deal will be used by IHMML to complete not only the purchase of the 393,000 square foot facility in Atholville, New Brunswick which has 300,000 square feet of grow space, but also an additional second building in Poekmouche, New Brunswick, which is a 273,000 square foot facility with the potential to expand to a total 600,000 square feet. This means an initial total of 593,000 square feet for cultivation with the potential to have 900,000 square feet.
900,000 Square Feet Mar1 Facility
Medican essentially will be the 50% owner of 900,000 square feet of mar1 cultivation space, or 450,000 square feet. To give you an idea of the profitability of owning a 900,000 sq ft. facility:
Medican Inc. & IHMML
Tweed Inc. (TWMJF)
Est. square footage
900,000 sq. ft.
150,000 sq. ft.
Conservative: 1 plant per 9 sq. ft.
100,000 plants
16,500 plants
Maximum: 1 plant per sq. ft
900,000 plants
150,000 plants
Average annual yield of 200 grams of dry bud per plant
20,000 to 180,000 kilograms
3,300 to 30,000 kilograms
Average sales at $7 (CAD) a gram
$140 million to $1.26 billion
$23.1 to $210 million
Est. pounds per yield
44,150 to 396,832 lbs
7,285 to 66,138 lbs
Est. revenues
50% adj. $70-630 million
$23.1 to $210 million
Est. costs of electricity at $238 per lb
~$10,507,700 to ~$94,446,016
~$1,733,775 to ~$15,740,844
Est. gross profits
$59,492,300 to $535,553,984
$21,366,225 to $194,259,156
Realistic est. revenues at 68 grams per sqft. 50% adj. $214.2 million $71.4 million
Realistic costs 50% adj ~$32.1 million ~$5,4.million
Gross Profits 50% adj. $182.1 million $66 million
**The above figures are estimates and do not reflect actual yields or earnings. They may be much higher or lower depending on the given circumstances, yields, and facility utilization. I assume 5 harvests, annually yielding 40 grams per plant per harvest for a total of 200 grams per year.
As you can see, the numbers yield a wildly large range. This should help investors understand what goes into investing into an agricultural company that has limited space and resources. The slightest misstep in space utilization or production inefficiency can yield grossly divergent results.
Additionally, nearly all MMPR firms have agreed to offer compassionate pricing to patients living in households with under $30,000 a year in income. This will affect the return on investment.
Although the above figures are merely estimates, no matter what Medican Inc. potentially stands to yield 3x more in revenues than Tweed Inc. This is not to say that Medican will also be more efficient at keeping costs of production and overhead low. Furthermore, Medican has only signed a nonbinding agreement with IHMML. If IHMML can come up with the capital itself, it may not have use for Medican.
Seal of Approval
Medican and IHMML are not only setting themselves apart by acquiring the largest facilities for growing medical mar1. They have also joined an organization called the Canadian National Medical Mar1 Association (CNMMA). The CNMMA stamps companies with a "seal of approval" for upholding stringent MMPR guidelines. As a result, it has made itself the coveted ersatz endorsement needed to assuage investors and patients alike.
(click to enlarge)
It is interesting that IHL is CNMMA approved, since it plans on entering the mar1 sector only through a subsidiary. It is unclear why IHL would also receive this stamp of approval.
(click to enlarge)
Disclaimer: There is no publicly available information regarding the legitimacy of the CNMMA. Several attempts have been made to contact the CNMMA without success.
Zenabis Approved
With so many companies desperately finding ways of distinguishing themselves from the competition, the CNMMA brand gives the impression that these companies are certified and trustworthy. To the untrained eye, this seal of approval seems like an unbiased legitimation of the company's authenticity. However, without full disclosure of the CNMMA's independent board, investors should pause before demanding that their MMPR firms also receive their CNMMA membership.
And finally Medican, along with Zenabis and IHL, also has the CNMMA stamp of approval. I must admit that it is tantalizing that a publicly traded company in the US had a Canadian CNMMA stamp of approval, even if I doubt the legitimacy of the CNMMA, it does give Medican the allure of having more legitimacy than the other Canadian players. Tweed does not even have the CNMMA stamp.
Market Outlook
MDCN
FITX
ENRT
(TSXV: TWD)
ATTBF
Share price*
2.75
.082
.51
2.59
1.48
Outstanding Shares
33,616,040
3,417,417,54
87,233,072
32,042,612
57,831,082
Proposed Facility Size
900,000 sq. ft.
58,000 sq. ft.
60,000 sq. ft.
150,000 sq. ft.
N/A
Authorized Share Count
100 million
3.5 billion
200 million
35 million***
62 million***
Market Cap
90.75 million
280.19 million
45.24 million
82.99 million
84.36 million
Adjusted Share Price**
0.908
2.802
0.452
.83
.76 (US)
0.854
**April 4th, 2014
**Adjusted share price at 100 million shares
***Canadian law allows for unlimited authorized shares but it has been suggested that this is the 'cap'
On an adjusted per share basis FITX is the most expensive. The combined market cap of ENRT, MDCN, ATTBF, and TWD equals 296 million, roughly 16 million more than FITX. This may be surprising because it is by far the "cheapest" of the five companies.
Remember a share price can "look cheap" that does not miccionan the company is cheap. Even though the share price of MDCN "appears" 2,647.7% greater than FITX, the actual per share cost of FITX is 384.6% greater than MDCN.
One can interpret FITX as "market perform," which would suggest the other companies are currently undervalued. I would not endorse this interpretation. Value is interpretative and I'll leave it to the more savvy fundamental analysts to determine intrinsic values.
Overall, I believe Medican has the most potential out of all the publicly trading MMPR plays. Although Tweed actually boasts a license and a facility, Medican has the potential to be 3X bigger.
Canada versus the US
Use
Canada: 3,015,000 10.2% of population 15+
US: 25,768,000 9.6% of adult population 15+
Canadian consumption
US consumption
Estimated casual 45%
.6 grams p/year
1,356,750
11,595,600
814,050 g
6,957,360
Estimated regular users 41%
15 grams p/year
1,236,150
10,564,880
18,542,250 g
158,473,200 g
Estimated daily users 9%
320 grams p/year
271,350*
2,319,120
86,832,000 g
8,245,760,000g
Estimated chronic users 4%
1,825 grams p/year
120,600*
1,030,720
220,095,000 g
47,026,600,000 g
Estimated totals
3,015,000
25,768,000
326,283,300 g
55,438,035,105 g
At $7 a gram
108 grams p/year
$2.283 billion
$38.806 billion
n/a
n/a
Estimated 391,950* core MMPR patients
783 grams p/year
$2.148 billion
n/a
n/a
n/a
*The Canadian Centre on Substance Abuse (CCSA) estimates that 25% of mar1 users over the age of 15 consume daily. If 25% of Canadian mar1 users consume daily, I believe that the core market equals 753,000 daily and chronic users. 753,000 users is nearly double the above estimates. Maintaining a similar distribution, I estimate there are perhaps 225,900 chronic users and 527,100 daily users. That is 7.7% chronic users and 17.28% daily users out of 3 million Canadians who reported using mar1.
I believe the core Canadian market comprises of the approximately 753,000 people who use mar1 daily and will therefore utilize the legal and accessible MMPR program. And since 7% of Canadian physicians support prescribing medical mar1, this will make it easier for a larger portion of mar1 users to be able to obtain physician prescriptions.
With 225,900 chronic users and 527,100 daily users, that would miccionan 580,940 kilograms consumed. If this was purchased through the market at $7 a gram, that would yield total annual revenues of $4.067 billion in the Canadian market. This figure sounds more reasonable since the CCSA has stated that in 2002 the illegal mar1 market was estimated to be approximately $8.2 billion.
But let us not get ahead of ourselves. Returning to the original estimates, in the event that 25,600 patients under the MMAR system are able to keep growing for personal that still leaves the low estimate of 356,350 chronic and daily users. If the additional 12,000 licensed users continue to buy from the 4,200 that are licensed to grow for a maximum of 2 patients that will miccionan 37,000 will not participate in the MMPR program.
Let's say that the 37,000 MMAR patients are all chronic users. That would still leave 83,600 purchasing an average 1,825 grams p/year and 271,350 purchasing 320 grams p/year to yield a $1.675 billion market for users who were unable to access legal mar1 under the old system. This is a conservative estimate.
On the other hand, if my estimates are correct-that there is a greater percentage of chronic and daily users in Canada-then the market is potentially $3.594 billion. In both scenarios, I reduce revenues by $473 million, which should account for the 37,000 patients allowed to keep their MMAR licenses and consuming 1,825 grams p/year.
This research is limited because it does not consider whether current total MMPR licensed producers have the facility capacity to fulfill the annual of 529,107 to 1.28 million pounds of mar1 needed to satisfy this "core" market.
Medican Inc.: The Nevada Shell Game
A huge issue for potential shareholders of Medican is the seemingly 25,000% increase in stock price. Well, there actually hasn't been a "25k" increase. Stock prices tend to act funny after the shell is taken over by an ambitious company (compare this with Charter Communications (CHTR), for instance, which went from .10 a share to $35 a share).
(Below: What a shell looks like before it resumes trading. Click to enlarge)
On June 25, 2013 Kenneth Williams entered into a series of Stock Purchase Agreements with Jenson Services and several other minority shareholders through which Mr. Williams collectively purchased 858,946 shares of TC X Calibur, Inc., representing approximately 65% of the outstanding common stock of the Company, for total consideration of $96,500.77, making the entire company worth about $130,276.04. This information was released to the public in an 8-K. As the chart indicates above, the stock price remained unchanged from June 25 to September 17th, 2013.
On September 18th, 2013, the company announced in an 8-K that it has changed its name to Medican Enterprises Inc.
On September 24, 2013, shareholders of record were entitled to a 20:1 dividend split increasing the outstanding shares to 26,501,240, which went ex on September 26, 2013.
On January 1st, 2014, Medican amends its October 1st, 2013 8-K to inform its shareholders of its plans to become a licensed MMPR in Canada for the purposes of medical mar1 production.
(MDCN Resumes trading. Price jumps to .50. click to enlarge)
MDCN data by YCharts
From the date of the stock dividend to the announcement of plans to enter the Canadian mar1 market the stock price dropped 18.1% in value.
(MMPR announcement. Still very light volume. Click to enlarge)
MDCN data by YCharts
Within 3 days of the announcement, the share price shoots up to $2.55 on January 24th, 2014 on a volume of 126,000 shares. It closes at $1.99.
The price jump from $0.35 a share on the 21st to $1.99 on the 24th represents a 569% increase. The price drops down to $1.32 on February 24th before bouncing and hitting a high of $3.83.
I think we can dismiss the 25,000% increase as the effect of a shell-takeover since no trading actually occurred from the company's reorganization until the 20:1 stock dividend. Arguably the stock is up 700% from 0.35 since the reorganization.
Ken Williams procured this company precisely because it was a cheap shell, based in Nevada. Nevada has become the hub for shells because of its loose regulations giving it the "Offshore Advantage" for tax evasion, since corporate taxes are unheard of in Nevada. This will be highly beneficial for shareholders because it will miccionan higher profit retention. This was clearly a strategic move to do business in Canada while avoiding costly taxes. Another company, MDRM Canada Ltd., also chose to procure a Nevada based shell for similar reasons.
(The price jump from 0.35 to $2 occurred on relatively low volume. Click to enlarge)
In fact, when I look at this chart I only see two major purchases: one at .90 and another at $2. The volume by price indicator suggests that 61k shares were bought at .90 on January 23rd, and 126k shares bought at $1.99 on January 24th (The price did drop to $1.50 the trinc Monday, most likely because a new shareholder was willing to sell their shares at that price, perhaps open market). What this tells me is that major shareholders will be unwilling to sell their shares for anything less than $1 moving forward. But I don't believe we will ever get near that $1.50 to $2 price range again. Since February 24th, this stock remained above $2.
With an average volume of 18k, MDCN sees only .07% of its total outstanding shares traded daily.
Thinking about a 700% jump in context of Medican's plan to raise $52 million ($47.32 million US), it seems clear to me that Mr. Williams may have had a hand in boosting share price. It would be ideal for the price to stay above the $3+ range in order to raise enough money to pay for the 50% stake in IHMML without considerable shareholder dilution. I believe investors have an incentive to keep the share price where it is at. At current price, shareholders may see a maximum of 16 million issuance of shares to raise money for the agreement. That would bring the current outstanding shares to 50 million.
But if the deal goes through, shareholders will potentially see a conservative $164 million in annual revenues. I see this as a worthy risk. I believe revenues can go up as much as $573 million if Medican Inc. plays its cards right. In that case, I'd say $3 a share is a bargain. I expect that shareholders in the mar1 industry won't mind paying a small premium now for exponential rewards in the coming years.
Conclusions
There is nothing conclusive now. Medican is still a long way away from the MMPR license. But this one is a great speculative play. If they are able to accomplish what they are setting out to accomplish, they will be the biggest player in the MMPR scene.
I do not doubt for a second that Medican and IHMML will do whatever they can to enter the MMPR market. Even if you decide not to invest in Medican, there's still a way for you to make money from Medican Inc. Zenabis is looking to hire 1,000 people for their facility in Atholville.
(click to enlarge)
This company is very serious about becoming a powerful player in the MMPR scene and I'll be joining them for the ride.
I am very bullish on the Canadian market, but it is still speculative. The possibility of patients continuing to access medical mar1 through illicit channels and that there is no cap on the amount of MMPR licenses that will be approved with 600 pending applications makes any investment very risky.
Furthermore, the changeover to MMPR will be gradual. It is my expectation that Canadian producers will be in full swing within 2-5 years. Hopefully by that time, other countries will decide to legalize.
The US mar1 market in my estimates represents a $38.8 billion market. If the time comes when the US legalizes mar1 for medical purposes, we might see Canadian producers making up for shortages. If that time comes, we will definitely see the Canadian market grow.
At the same time, the estimated $7 a gram most likely will not hold. As competition increases, we will most likely see prices drop.
Medican looks like it is building up for the long haul. If Medican and IHMML finalize their agreement, this team will become the largest producer in the market. This is a speculative play with lots of uncertainties.
Without a facility and without a license, Medican is not that different from the rest of the public companies except for the "nonbinding LOI" and the CNMMA stamp of approval. But since tangible assets and revenues don't determine the mar1 market, Medican represents the most exciting speculative play.
Final Thoughts
"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." -Warren Buffett
The last few weeks have not been positive for the mar1 sector. The recent plunge of pumped up stocks like Vapor Group Inc. (OTCQB:SPLI) and Minerco Resources (OTCQB:MINE) should make potential investors more cautious before jumping into this market. I believe the irrational pumping mixed with irrational exuberance has led to unhealthy volatility.
The sector is beginning to look like one big pump-fest manufactured by young, inexperienced traders who saw the value of their investments skyrocket 1,000%-45,000% and believed themselves to now be intelligent traders. As the reality is settling in that gains are not earned until realized, investors might take more pains to do individual research before throwing their money at a company that sends out press releases about the "potential mar1 market."
Investors should take caution before investing in a stock just because you saw someone mention the ticker symbol in a twitter post or in a Seeking Alpha article. It is important for you to do your own due diligence. To quote Buffett again, "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well." - Warren Buffett
Social media is unfortunately being used to pump up stocks (good or bad), rather than to give solid investment advice and analysis. If you feel the need to repeatedly send out tweets with ticker symbols telling investors to "buy the dip," what you are doing is contributing to a negative investment environment where the market as a whole suffers. Investors, realize that people sending out these tweets either are a) nervous that they might never be able to flip their investment or b) day traders who buy low, sell for a moderate profit, re-buy after it dipped and now need you to front more cash to help them make additional returns.
With that said, I'll go so far as this recent downturn has been a gift for the contrarian investor. The combination of several underperforming companies plunging and dragging along some of the more fruta ones with the news of MMAR being allowed to continue has provided a necessary correction. Prices of some valuable stocks have been reduced or kept low because investors are now hesitant about risking their money in the Canadian market.
If my conservative estimates are correct, then there is still a $1.675 billion mar1 market for the taking. If my more bullish estimates are correct, we are looking at a potential $4 billion market under MMPR. 37,000 patients in my estimates does leave out a potential $473 million market. But the fact of the matter is only 25,600 are actually allowed to grow for personal use. That is still a rough $372 million not being captured. But I am not betting on $372 million. I am betting $1.6-$4 billion
As a contrarian, I guess all I can say is, "Thank you Canada. Thank you investors."
Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.