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As the legal marijuana industry continues to expand into new markets, new opportunities are created. Marijuana businesses are capitalizing one these opportunities and we expect to see this trend to continue for years to come.
While many people are focused on the United States marijuana industry, Canada has been the biggest beneficiary of the cannabis boom. Since 2016, we have seen more than $1 billion enter the Canadian marijuana market.
Medical marijuana is legal and Canada and the country plans to open a legal recreational market before July 1, 2018. The legal nature of the Canadian marijuana industry is attractive to investors since companies can benefit from basic business services (i.e. access to a bank account).
Although the summer season has been relatively slow for cannabis companies, we expect to see activity pick up quickly ahead of July 2018. Today, we have highlighted three stories that we believe cannabis investors need to be aware of.
CannTrust: Commences Trading on Monday
On Monday, CannTrust Holdings will commence trading under the symbol “TRST” on the Canadian Securities Exchange.
CannTrust is a leading provider of pharmaceutical grade medical cannabis and operates out of a 50,000-square foot hydroponic facility. The company is currently working on a significant upgrade of its 430,000-square foot greenhouse facility in the Niagara region. Phase 1 of the upgrade (totaling 250,000 square feet of production space) is expected to be operational in 2017.
CannTrust currently has approximately 25,000 active patients, up from approximately 15,000 patients at the end of May. The company recorded positive adjusted EBITDA1 in the first quarter and will release second quarter financial results by August 29th.
We are excited by the opportunity CannTrust offers and believe this is an opportunity that investors need to be aware of.
Reliq: Continues to Execute and the Market Responds
Yesterday, Reliq Health Technologies Inc. (RHT.V) (RQHTF) traded significantly higher on very strong volume after its remote patient monitoring, care coordination and telemedicine platform with Rio Grande Valley Health Alliance went live.
Reliq started enrolling the first patients and expects to add more than 500 patients to the platform each month. At full deployment, Reliq will be generating over $20 million in recurring annual revenue.
Rio Grande Valley Health Alliance is an Accountable Care Organization (ACO) comprised of 17 primary care physicians. The ACO is made up of 15 independent practices focusing on primary care, and currently has over 30,000 registered patients.
August has been a busy month for Reliq. The company started the month by announcing that its remote patient monitoring and telemedicine solution with Texas-based Paz Home Health went live.
We are favorable on the opportunity provided by Reliq and believe this is company that is still significantly undervalued by Wall Street.
Surna: Revamps its Management Team
The Board of Directors at Surna Inc. (SRNA) has responded to the weak financial results reported earlier this week by revamping its senior management team to lead the company, execute its growth plan and increase revenue.
The Board brought on a new CEO, CFO and Head of Sales, and expects the current leadership to install the sales infrastructure in place to increase the number of geographic markets, the number of customers and the average size of each customer order over the next 2 years.
While we are favorable on these changes, we want to see how the new management team executes from here. Since inception, Surna’s senior management team has seen a lot of turnover and this is not a positive trend for a business.
We will keep an eye on how this new team continues to execute and how these moves help grow revenues and improve fundamentals.
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