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A Sober Look at Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF)

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Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF) has presented itself as somewhat of a mystery item in the space. The company courted ACB for a huge strategic investment and has assets that suggest it could become one of the highest capacity players in the Canadian space. But it then suffered news that ACB was dealing its stake, and shares took a hit that was compounded with the sell-the-news following Canadian legalization.

To help heal the divide, the company recently announced, along with its wholly-owned subsidiary, TGOD Acquisition Corporation, that they have entered into a definitive arrangement agreement pursuant to which the Company will, subject to the terms and conditions of the Arrangement Agreement, effect the previously announced spin-off transaction whereby TGOD will distribute to TGOD shareholders unit purchase warrants of SpinCo by way of a court-approved plan of arrangement.

Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF) is a research and development company licensed under the Access to Cannabis for Medical Purposes Regulations to cultivate medical cannabis.

The Company carries out its principal activities producing cannabis from its facilities in Ancaster, Ont., pursuant to the provisions of the ACMPR and the Controlled Drugs and Substances Act (Canada) and its regulations.

The Company grows high quality, organic cannabis with sustainable, all-natural principles. TGOD’s products are laboratory tested to ensure patients have access to a standardized, safe and consistent product. TGOD has a funded capacity of 170,000 kg and is building 1,382,000 sq. ft. of cultivation facilities in Ontario, Quebec and Jamaica.

The Company has developed a strategic partnership with Aurora Cannabis Inc. (ACB.TO) whereby Aurora has invested approximately C$78.1 million for a 20% off-take agreement on Canadian production. The Company has raised approximately C$350 million dollars and has over 20,000 shareholders.

Moreover, the Green Organic Dutchman Holdings Ltd., through its subsidiary, The Green Organic Dutchman Ltd., operates as a cannabinoid-based research and development company in Canada. It produces organic cannabis products, including organic dried cannabis, cannabis oils and edibles, fresh cannabis, and seeds for medical applications. The company was incorporated in 2016 and is headquartered in Mississauga, Canada.

 

Left, Right, Left

We started off by noting that TGODF recently hit the wires with the announcement, along with its wholly-owned subsidiary, TGOD Acquisition Corporation, that they have entered into a definitive arrangement agreement pursuant to which the Company will, subject to the terms and conditions of the Arrangement Agreement, effect the previously announced spin-off transaction whereby TGOD will distribute to TGOD shareholders unit purchase warrants of SpinCo by way of a court-approved plan of arrangement.

Even in light of this news, TGODF has had a rough past week of trading action, with shares sinking something like -22% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -36%. Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($261.8M against $14M).

SpinCo, the spinoff asset is listed as “an investment company guided by an investment policy primarily focused on investments in the cannabis industry in Canada and internationally.”

SpinCo’s investments may include the acquisition of equity, debt or other securities of publicly traded or private companies or other entities, financing in exchange for pre-determined royalties or distributions and the acquisition of all or part of one or more businesses, portfolios or other assets, in each case as SpinCo believes will enhance value for the shareholders of SpinCo in the long term. SpinCo’s board of directors and management team have considerable financial, mergers and acquisitions and cannabis industry experience and will consist of David Doherty, Chief Executive Officer and Director who has transitioned from TGOD, Nick Demare, Chief Financial Officer, and Jeff Scott, Director.

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Canopy Rivers Inc. (OTCMKTS:CNPOF) Portfolio Company TerrAscend Corp (OTCMKTS:TRSSF) To Acquire State Flower Brand

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Canopy Rivers Inc. (OTCMKTS: CNPOF) has announced that portfolio company TerrAscend Corp (OTCMKTS: TRSSF) has entered a definitive agreement to buy ABI SF, LLC a cannabis cultivation facility operators that own the State Flower brand.

Acquisition of State Flower

According to the terms of the agreement, initially, TerrAscend will acquire 49.9% of State Flower equity for around $2.85 million from the conversion of a previously issued convertible debenture. The company has also extended a $3.75 million line of credit to State Flower for enhancing improvements in the facility aimed at boosting its capacity. TerrAscend will acquire the rest of the 50.1% within a predetermined 12-month period based on future revenue.

Canopy Rivers, CEO, and President, Narbe Alexandrian stated that the acquisition demonstrates how TerrAscend is delivering its expansion plans. This offers more exposure in the US for Canopy Rivers and TerrAscend shareholders. The CEO added that the acquisition of State Flower would enable TerrAscend to seize a significant foothold in the US as a result of its solid consumer-facing brand. Alexandrian further said that with the retail foothold in the US already secured vial Apothecarium, the acquisition of State Flower would be a natural strategic fit for the company.

State Flower produces Ultra-premium cannabis

State Flower is popular for its high-quality cannabis flower currently sold through dispensaries in Nevada and California including Apothecarium. It operates a licensed facility in San Francisco California. It has emphasized a craft approach in its cultivation through the best-in-class genetics at the Envirocann certified facility. Evirocann certification confirms that bets management practices are in place in growing and processing of cannabis. It also ensures environmental stewardship as well as compliance with state and local regulations.

State Flower President, Daniel Wacks stated that through their work with TerrAscend and Apothecarium they have established a great cultural and strategic fit. He added that the company was proud of its achievements and were glad to have found a partner who believes in their team. Wacks said that they are looking forward to the partnership to create the best-in-class growing capabilities in all locations where TerrAscend operates.

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Auxly Cannabis Group Inc. (OTCMKTS:CBWTF) Subsidiary KGK Science Receives Cannabis Research Licence

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Auxly Cannabis Group Inc. (OTCMKTS:CBWTF) has announced that its wholly-owned subsidiary KGK Science Inc. has received a Cannabis Research Licence from Health Canada. Under the cannabis regulations, this will allow the subsidiary to possess and manage cannabis for clinical trials.

KGK to conduct the first clinical trial

This is the first license of its kind in Canada to a contract research organization. KGK will be conducting its first cannabis-based clinical trial to test pharmacokinetics of CBD and THC in healthy adults. The trial will start on October based on a procedure developed by KGK researchers at the company’s in-house clinic in Ontario. A third party who sponsored KGK to carry the trial on their behalf will receive the results.

KGK has several cannabis trials in its pipeline, and it is on its way to show its leadership in research and regulatory services in supporting cannabis and cannabis derivatives. CEO and President of KGK, Najla Guthrie stated that the trial is a significant step for the company’s business, clients, and the cannabis industry at large. He added that support from regulatory bodies and government was essential for manufacturers to take science-driven approaches in substantiating the safety of products through clinical trials.

Auxly establishing presence in Atlantic Canada

Recently Auxly and its strategic partner Atlantic Cultivation announced the signing of a comprehensive supply, retail and development agreement with the province of Newfoundland and Labrador. This is a significant milestone for Auxly as it looks to establish its presence in Atlantic Canada.

According to the agreement, Atlantic qualifies to apply for the running of five new retail outlets in the province. Currently, site scouting is underway, and Atlantic expects to open its first retail store in the first quarter of 2020. On its end, Auxly will supply up to 50 kg of dried cannabis flower this year to the province of Newfoundland and Labrador. This will increase to 1,000 kg next year with the option of additional 1,000 kg in 2021.

Auxly CEO, Hugo Alves said that they were delighted to build the company’s partnership with Atlantic as they seek to reinforce their position in Atlantic Canada.

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SinglePoint Inc. (OTCMKTS:SING) Subsidiary To Offer Energy Solutions To The First Ever Hemp Distribution Centre

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SinglePoint Inc. (OTCMKTS:SING) has announced that its subsidiary Direct Solar of America and GSX international Group along with other corporations, are planning a first of its kind Hemp Distribution center.

Direct Solar to offer energy solutions to distribution and production centers

Direct Solar of America will supply all then required energy solutions to the distribution and production centers. This is along with energy solutions to autonomous farmers within the coop. Equally, the SinglePoint subsidiary will also facilitate the assigning or selling of ITCs between centers and farmers as well as with third parties.

This opportunity to enter the hemp market represents a massive chance to enter the burgeoning market expected to be a multi-billion dollar industry in the next few years. An organization able to effectively pool the resources of small hemp farmers and form consolidated distribution and production centers could have a competitive edge in the hemp processing market in the future. In addition to the current tax incentives provided through ITCs as well as Opportunity Zones, any group that can access both will be in a better position to reap high returns.

Direct solar services to offer exceptional value add

The company’s services will provide a unique value addition not easily replicated. This will lead to the creation of a natural barrier that will limit the entry of competitors in future that offering a long-term competitive edge. Equally, the solution will offer immediate stability to the hemp market at the same time, generate considerable profits.

Generally, the profit potential is massive owing to the current solar tax incentives and the opportunity zone exemptions. It is estimated that the project will be fully profitable in 3 to 4 growing cycles. Southern farmers will enjoy the benefit of multiple seasons per year while northern farmers will only have one growing season per year.

To reap the maximum benefit of the structure is to take advantage of the currently available tax exemptions for opportunity zone development. The financial incentive will ensure the project is profitable in the next 24 to 36 months.

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