As growth stocks take a hit to start off 2022, some of the most profound growth investment themes are on sale.
The most “on sale” spaces in the market right now – ie, those areas that include the most prolific long-term growth potential not yet realized by cash flows from operations this year – include cryptocurrency, cloud technology, genomics, and cannabis-related models.
This last category – cannabis-related models – includes a number of different facets. One of the least appreciated is that of the extended array of possible cannabinoid products and technologies.
With that in mind, we take a look below at a handful of the most interesting innovators in the cannabinoid marketplace.
Glass House Brands Inc. (OTC US:GLASF) operates as a vertically integrated cannabis brand-building business. The company focuses on recreational and wellness applications.
The company recently announced that it has filed an application in the Supreme Court of British Columbia in the Company’s Companies’ Creditors Arrangement Act proceedings, seeking an order that, among other things: (i) sanctions the Company’s amended plan of compromise, arrangement and reorganization dated January 17, 2022; and (ii) extends the stay period in the CCAA proceedings until the date that PricewaterhouseCoopers Inc., in its capacity as court-appointed monitor of the Company is discharged by further Court order.
Glass House Brands Inc. (OTC US:GLASF) put out a Sanction Order application that is scheduled to be heard by the Court on January 21, 2022. Once granted, the Sanction Order will allow the Company to complete the restructuring transactions contemplated under the Plan and the Acquisition Agreement dated December 17, 2021, between the Company and Glass House Brands Inc, as amended by the Amendment to Acquisition Agreement dated January 17, 2022.
Pursuant to the Sanction Order, upon implementation of the Plan, and after distributions are made to the Company’s noteholders as set forth in the Plan, the Company will distribute common shares of the Purchaser to its securities-holders through Odyssey Trust Company. The details of such distributions, as well as of all distributions proposed to be made to the Company’s stakeholders under the Sanction Order, are set forth in the Plan.
Even in light of this news, GLASF 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 24% in that time on strong overall action.
Glass House Brands Inc. (OTC US:GLASF) had no reported sales in its last quarterly financial data. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($36.6M against $76.4M, respectively).
Sugarmade Inc. (OTC US:SGMD) is a more speculative name in the space, but one that has laid down a very compelling narrative as it builds a vertically integrated cannabis brand in the monster multi-billion-dollar California cannabinoid marketplace.
The company currently operates a cannabis delivery business with cultivation and product manufacturing coming into place to round out a fully vertical model. To help build that model out, it is getting ready for the first planting at its large 640-acre outdoor cultivation site associated with its recently acquired Lemon Glow subsidiary. But there’s more here than growing sales and verticalization. The company also recently announced its entrance into the rare cannabinoid space.
Sugarmade Inc. (OTC US:SGMD) just put out news this morning on the signing of a binding Letter of Intent with GenCann, Inc., the exclusive licensor for a set of cannabis chemovars particularly rich in the cannabinoid Tetrahydrocannabivarin (THC-V).
According to the release, under the terms outlined in the LOI, Sugarmade and its licensed cannabis cultivator partners will be granted a five-year license to cultivate what the Company believes to be some of the highest THC-V-containing strains in existence. Sugarmade and GenCann plan to begin clone production immediately upon the signing of the final agreement with a cultivation program beginning in Lake County, California this spring.
“While THC-V is sometimes referred to as a ‘rare cannabinoid’, we believe the term no longer applies relative to our planned cultivation effort using GenCann’s chemovars,” commented Jimmy Chan, CEO of Sugarmade. “The test results from certified California laboratories of these chemovars are certainly impressive, with THC-V yields in flower of up to 8%. We think the GenCann chemovars are a game-changer in the cannabinoid space. Sugarmade plans to make a substantial commitment to bring products based on THC-V to the California market and perhaps to other states in the future. Stay tuned for our upcoming product plan announcements”
The GenCann Chemovars, according to the company’s release, are covered by multiple issued U.S. patents, including patent numbers PP33212 for the plant called “V1”, patent number PP33211 for the plant called “V2” and patent number PP33210 for the plant called “V3”. All three of these chemovars contain abundant THC-V, with the V1 variety being especially distinguished by producing more THC-V than THC by percent weight. The V3 strain, also known as Skelator, will be the predominant strain utilized for spring cultivation due to its early finishing characteristics and its higher THC-V content, although the V1 and V2 varieties are also planned for Sugarmade’s cultivation effort.
Sugarmade Inc. (OTC US:SGMD) CEO Mr. Chan continued, “The THC-V smoking and edibles consumption experience is very different compared to traditional cannabis. Where legacy cannabis strains often produce a sedating effect, consumption of THC-V rich products produces a pleasant and uplifting effect. It’s a remarkable experience and we believe consumers will gravitate to it.”
InMed Pharmaceuticals Inc. (Nasdaq:INM) engages in the provision of biopharmaceutical research and development of novel.
The company also involves in cannabinoid-based therapies and a biosynthesis system for the manufacturing of pharmaceutical-grade cannabinoids.
InMed Pharmaceuticals Inc. (Nasdaq:INM) recently announced it has launched B2B sales of the rare cannabinoid cannabicitran (CBT) into the health and wellness sector. CBT is the first of several new product launches planned for the first half of 2022.
“We are delivering on our objective to launch additional rare cannabinoids in early 2022 in response to inbound demand. By midyear, we expect to have at least four rare cannabinoids available for the health and wellness markets, positioning us as a leading large scale supplier of high quality rare cannabinoids in these sectors,” stated Shane Johnson, SVP and General Manager of BayMedica. “The launch of CBT further demonstrates our ability to produce rare cannabinoids at commercial scale, an achievement that very few companies have been able to accomplish. We are pleased with initial demand, and we expect to grow sales over the coming quarters as we continue to expand our product portfolio of rare cannabinoids.”
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -17%.
InMed Pharmaceuticals Inc. (Nasdaq:INM) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($15.4M against $1.9M).
Other key tickers in the cannabinoid space include Cronos Group Inc. (Nasdaq:CRON), Avicanna Inc. (OTC US:AVCNF), OrganiGram Holdings Inc. (Nasdaq:OGI), 22nd Century Group Inc. (Nasdaq:XXII), Aurora Cannabis Inc. (Nasdaq:ACB), and Revive Therapeutics Ltd. (OTC US:RVVTF).
