The summer season has been a painful time period for the cannabis industry, and this is a trend that we have been closely following. Now that we are in month of July, we believe that there has never been a better time to take a hard look at the cannabis sector and expect to see a major trend reversal over the next month.
Over the last few years, we have noticed a similar trend in the cannabis sector during the summer period and have focused on identifying cannabis companies that have significantly advanced their respective businesses and have massive upside potential.
WeedMD (WMD.V) (WDDMF) represents a leading Canadian Licensed Producer (LP) that is trading at a significant discount when compared to its peers and has massive growth prospects. We believe that the market tends to agree with our thesis and WeedMD has received positive upgrades from leading broker-dealers.
In late June, Eight Capital issued WeedMD a Buy rating and a $3 price target, implying more than 85% upside to current levels. Shortly after this report, WeedMD was named one of the top 5 small-cap CBD stocks by Palm Beach Venture which issued the stock a Buy-up-to price of up to $2.20. We believe that these reports are just the start of something much bigger and expect to see WeedMD receive additional coverage from leading broker-dealers as the team continues to execute on its growth initiatives.
WeedMD is Positioned to be a Canadian Cannabis Leader
From an impressive outdoor cultivation facility to a large-scale processing facility, WeedMD has significant growth prospects and this is an opportunity that investors need to be aware of. Over the next year, the company will go through a major transformation that coudl lead to massive revenue growth and this is the cornerstone of our investment thesis.
Currently, WeedMD is licensed for 110,000 sq. ft. of greenhouse cultivation and 1.1 million sq. ft. of outdoor cultivation (34,400 kilograms of expected annual capacity). In 2019, the company is expecting its outdoor cultivation to yield 25,000 kilograms and is working to complete its Phase 2 of the outdoor grow expansion in 2020. WeedMD’s Phase 2 expansion will result in 75,000 kilograms of incremental capacity and we are bullish on the growth prospects associated with this initiative.
The economics associated with the cannabis that is grown outdoors is very attractive and WeedMD plans to transport the cannabis to the Alymer facility which is in the process of being converted into a cannabis processing facility to create cannabis derivative products. This represents a significant opportunity for the Canadian cannabis producer, and we are bullish on the cannabis concentrate market.
WeedMD expects to complete Phase 1 of the Aylmer extraction facility in the near future and the facility is expected to be able to process 70,000 kilograms per year. An important aspect of this initiative relates to how the facility is fully licensed for cannabis oil production and sale and will not require additional amendments from Health Canada. Next year, the company expects to further expand extraction capabilities at the Aylmer extraction facility to 200,000 kilograms of annual processing capacity.
WeedMD plans to utilize a variety of extraction methods in order to meet the demands of the market. The existing fully-licensed 26,000 sq. ft. facility is located on an expandable four-acre property that is wholly-owned by WeedMD and are favorable on the expansion opportunity. Through the facility, WeedMD will provide formulation capabilities for wholesale and white label manufacturing. By using indoor and outdoor grown cannabis, WeedMD will be able to create a variety of type of cannabis concentrates that range in quality and price and is well positioned to capitalize on the derivatives market in 2020.
One of the reasons we are excited about this initiative is due to the Aylmer facility being built to GxP standards. WeedMD is constructing the facility to these standards to be able to capitalize on both the domestic and international cannabis concentrate markets. The international market represents a massive opportunity and we expect to see the company make a splash in this market in the coming months.
An Opportunity that Cannot be Missed
When it comes to investing in a cannabis business, the management team is the most important aspect of the story. WeedMD has one of the most capable management teams in the industry and we are favorable on its strategy as it relates to the Aylmer facility. The management has already stated that it plans to hold back a portion of inventory for the opening of its extraction facility and in preparation for the commencement of the Canadian cannabis derivatives market.
WeedMD has been trending higher and the shares has come well off its late June lows. Moment has been trending higher and this is an opportunity that has visible catalyst for growth. We believe that the company is due for a re-rate and will be one of the most (if not the most) successful outdoor Canadian cannabis cultivators.
This is an opportunity that we are very excited about and believe that the Canadian cannabis producer has massive catalysts for growth. Over the next year, we expect to see WeeMD go through a major transformation and believe that this opportunity is flying under the radar.
To learn more about this leading Canadian cannabis producer, please reach out to firstname.lastname@example.org.
Pursuant to an agreement between StoneBridge Partners LLC and WeedMD Inc. we have been hired for a period of 180 days beginning April 22, 2019 and ending October 22, 2019 to publicly disseminate information about (WMD) including on the Website and other media including Facebook and Twitter. We are being paid $6,000 per month (WMD) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero (0) shares of (WMD), which we purchased in the open market. We plan to sell the “ZERO” shares of (WMD) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (WMD) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.