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CBD has Bottomed… What to Do Now (CVSI, GCGX, CWBHF, TRTC, MJNA)

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The CBD industry has been one of the hardest hit market segments over the past 18 months. But the long-term structural growth trend continues to look robust. The disconnect is about supply. There was a glut as tons of pretenders and frauds purported to have a viable model. The bear has done its job and shut most of them down.

Now, in the aftermath, with the undergrowth burnt up in the fire, the survivors could be set to run with the structural theme still intact. That provides investors with an impetus to being to pick up the pieces off the floor and possible score big wins with a speculative mindset.

With that in mind, we take a look at some of the most promising names still standing, and expanding, as the new dawn pushes back above the horizon for CBD stocks.

 

CV Sciences Inc (OTCMKTS:CVSI)

CV Sciences Inc bills itself as a company that operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors.

At one point, this was the poster child for the space, ramping to over $7/share before being toppled by a Citron bear research piece related to intellectual property. It remains an interesting opportunity, but demands some extra due diligence.

The stock has suffered a bit of late, with shares of CVSI taking a hit in recent action, down about -5% over the past week. But action around the $0.45/share zone will be telling. Thus far, the stock appears to be signaling potential for a “higher low”, which suggests a longer-term bottom was put in place in March and a new upside phase is being cemented into place as fresh capital flows crowd onto the bid.

A break about the 50-day MA (around $0.54) would be a major signal.

 

Global Consortium Inc. (OTCMKTS:GCGX)

Global Consortium Inc. (OTCMKTS:GCGX) owns Indulge Oils (www.indulgeoils.com), a cannabis distillate which is currently being manufactured and marketed in California.

The company is also building America’s First Cannabis Mall in Sacramento, CA which when completed will house Manufacturing, Distribution, Delivery, Retail, Testing, and Cultivation all under one 64,000 square foot building. The Mall will house the largest Manufacturing facility of THC and CBD Distillate and Edibles believed to be operational in the United States. Global Consortium has leased 25,000 Square feet of the building with a purchase option, the Company is working to secure a first right of refusal for the remaining 39,000 square feet.

Indulge Oils is a premium “pesticide free” product sought after brand as it is known for its purity and high quality. Indulge Oils produces clean and pure oils that do not contain any residual particles, are non-toxic and non-carcinogenic. This is why Indulge Oils commands a premium for its oils and cartridges. Global Consortium, Inc. executed a 5-year lease with an option to purchase 25,000 square feet in Sacramento, CA.

Global Consortium Inc. (OTCMKTS:GCGX) is currently also expanding into the state of Florida.

There has been substantial progress in California with licensing and permitting. They are now ready to do full manufacturing for the Indulge Oils line. Dwyer also announced that GCGX will begin working Florida on a new CBD line, the upcoming elimination off all remaining convertible debt, and what is next for GCGX in 2020.

 

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF)

Charlotte’s Web is perhaps the most established leader in the space in terms of the North American CBD market. The company makes 100% hemp-based cannabidiol wellness products, including CBD hemp oils, capsules, topicals, and pet products that feature CBD hemp oil extracts.

CWBHF hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 27% in that time on strong overall action.

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) managed to rope in revenues totaling $30.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 6.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($88.9M against $38.2M).

 

Terra Tech Corp (OTCMKTS:TRTC)

Terra Tech trumpets itself as a vertically integrated cannabis-focused agriculture company. The company operates in two segments, Herbs and Produce Products; and Cannabis Dispensary, Cultivation and Production.

TRTC has had a rough past week of trading action, with shares sinking something like -5% 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 -8%.

Terra Tech Corp (OTCMKTS:TRTC) pulled in sales of $10.3M in its last reported quarterly financials, representing top line growth of 48.3%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.2M against $27.6M, respectively).

 

Medical Marijuana Inc (OTCMKTS:MJNA)

Medical Marijuana Inc bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets.

The company has been one to chronically overpromise and underdeliver, so it warrants caution. Management has been claiming big revenues for many years. Yet the stock has kept trending lower and the company refuses to move off the pink sheets or start producing audited financial data.

Those, taken together, represent some important red flags. MJNA may be best left alone despite its claims of powerhouse progress. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($6.5M against $10.8M, respectively).

 

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Singlepoint Inc. (OTCMKTS: SING) In A Joint Venture With Box Biosciences To Produce and Distribute Hand Sanitizers

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Singlepoint Inc. (OTCMKTS:SING) has formed a joint venture with BOX Biosciences to distribute various hand-sanitizer products produced in Carlsbad, California.

Singlepoint joint venture producing FDA-approved sanitizer

The two companies are distributing the FDA-approved sanitizer products on the west and east coast. BOX Biosciences is headquartered in Charleston, South Carolina, with distribution outlets in Raleigh, North Carolina, and Carlsbad, California. Following the coronavirus outbreak, there has been a shortage of disinfectant and sanitizer products.

Because of the urgent need to fill this shortage, the companies through the joint venture are working to ensure the US is safe by producing bulk hand sanitizers. They will also introduce disinfectants as permitted by the demand of hand sanitizers. Already the companies have on-going sales to various retail outlets, and currently, they are in discussions for potential hand sanitizer product sales.

The sanitizers the companies are manufacturing kill 99.9% of coronavirus causing germs, and they will be available to the general public and essential businesses. For now, the companies have prioritized the sanitizers to nursing homes, clinics, hospitals, government units, and home healthcare agencies. Equally essential businesses will also get prioritized in getting the bulk hand sanitizers.

Singlepoint and Box committed to offering solutions to COVID-19

Ryan Cowell, the founder of BOX Biosciences, indicated that they will focus on bulk orders of 250 gallons, 55-gallon drums, 1 gallon, 1 liter, 32oz, and 8oz totes of sanitizer. For businesses having the ability to offload bulk sanitizer from tankers, they can also order.

Singlepoint and Box’s expansion to making disinfectant and hand sanitizers shows how companies are dedicated to offering significant well-being solutions for the environment, surfaces, and people in response to the COVID-19 outbreak.

BOX’s operations manager Troy Lorenz stated there is an urge by businesses and people to clean and disinfect their work environment, and as a result, the products they are producing are important for the environment and people. The objective of Singlepoint and Box is to help authorities and people in combating the spread of COVID-19.

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Sproutly Canada Inc (OTCMKTS:SRUTF) Chalks Out A Business Strategy To Focus On Commercialization Of APP Technology

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Sproutly Canada Inc (OTCMKTS:SRUTF) has chalked out a business transformation strategy to focus on commercializing its proprietary APP technology by moving away from cannabis cultivation resources. Infusion Biosciences Inc will contribute additional funds to implement business transformation. It will also supply additional talent to support the transformation plan.

Business transformation strategy

As part of the light technology model, Sproutly will focus on generating revenues through establishing ingredient supply agreements, technology licensing, and partnership opportunities. It will scale down the cultivation of cannabis, which is capital intensive, and reduce cash burn.

Sproutly has recruited Dr. Anup Sen as Chief Executive Officer for implementing a business transformation plan. Anup is the first scientist to invent water soluble CBD in cannabis plants. Following the appointment of Dr. Anup, Keith Dolo is relinquishing the post of CEO. Keith will also step down from the board of Sproutly. He will act as an advisor to the Chairman. Keith said the company’s main target is to introduce unique products in the market by using APP Technology. Sproutly also slashed cash expenses by giving pink slips to operational and corporate staff.

Sproutly is adopting the new business strategy because of the operational challenges and headwinds in the industry. Prohibitive costs associated with cannabis cultivation have forced the company to change its business strategy.

Commercializes APP technology

Sproutly will focus on APP technology commercialization through formulation, production, and the sale of ingredients by using Bi-Natural Oils and water-soluble cannabinoids. The company will use the licensed manufacturers’ distribution networks and its existing infrastructure to realize its revised plan. Sproutly has faced bottlenecks in introducing cannabis 2.0 products because it has earmarked human resources and significant capital for cannabis cultivation.

Adopts cost-cutting measures

Sproutly has reduced the employees by 75% to reduce costs and reduce cannabis cultivation. It has eased the capital requirements for Sproutly and pursues other strategic alternatives. The company will get the support of six key personnel of Infusion Biosciences to assist in its daily operations.

Infusion Biosciences’s key executives have helped Sproutly in obtaining licenses for APP technology and in forming partnerships in the US. Sproutly also expects to expedite its commercialization efforts with the help of these executives.

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Aleafia Health Inc (OTCMKTS:ALEAF) Reports An Astonishing 2,486% Rise In Q1 2020 Revenues

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Aleafia Health Inc (OTCMKTS:ALEAF) has reported revenues of $14.59 million in Q1 2020. It is an increase of 2,486% compared to the same period last year and a 143% increase compared to the previous quarter.

Reports solid growth for the fifth consecutive quarter

Geoffrey Benic, Chief Executive Officer of Aleafia, said the company achieved a breakthrough in Q1 2020 on the backdrop of sustainable and disciplined growth. As it builds the cannabis wellness and health ecosystem, the company gives importance to the patient-centric approach. It is the fifth consecutive quarter to report solid growth.

Expects to introduce new cannabis 2.0 products in H2

Aleafia expects to introduce new cannabis 2.0 products tailored for the wellness and health consumers in H2, 2020. Its active registered patient count has surged to 10,983 as of March 31, 2020, from 10,249 as of December 31, 2019.

Key achievements in Q1 2020

Aleafia on March 26, 2020, announced plans to introduce direct-to-door medical cannabis delivery service to the registered patients. It is a contactless and safe delivery mechanism for the patients. Therefore, Aleafia eliminates the need for collecting the products from post boxes and post offices.

Achievements after Q1 2020

According to the announcement on May 1, 2020, Glenn Washer and Rhonda Lawson will be appointed to the board with effect from May 16, 2020. It is on the backdrop of the resignation of the existing directors – Bill Stewart, and Raf Souccar with effective from May 15, 2020. Julian Fantino, Chairman, has also resigned from the board.

Aleafia has temporarily shut down its physical offices of the education centers and cannabis clinics across the nation since March 16, 2020, because of the ongoing coronavirus crisis. The company is completing the patient consultations via its virtual clinics.

To maintain long term success, the company maintains a diversified portfolio of differentiated and high-quality product formats. The company will use in-house facilities to manufacture cannabis 2.0 products and satisfy the demand in the medical and adult-use cannabis markets in Canada. It will also supply cannabis 2.0 products in markets worldwide where legally permitted.

Aleafia Farms Inc, a wholly-owned subsidiary of Aleafia, has secured an amended license from Health Canada on May 12, 2020, for the outdoor cultivation at its Port Perry Facility.

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