It’s time for your Daily Hit of cannabis financial news for September 4, 2019.
On the Site
Aurora Cannabis Inc. (NYSE | TSX: ACB) sold off its final 28,833,334 shares of The Green Organic Dutchman Holdings Ltd (CSE: TGOD) (OTC: TGODF) at a price of $3.00per share for gross proceeds of roughly $86.5 million. The stock was lately trading at C$3.51 on the CSE and $2.63 on the OTC. The share represents 10.5% of the issued and outstanding shares of TGOD.
The investment turned out to be a winner for Aurora. The company said that the sale represented an approximate 50% internal rate of return for the company. Aurora said it no longer holds any shares of TGOD, but it does continue to hold warrants to purchase 16,666,667 shares of TGOD.
Are ACB’s sales being affected by the robust black market? I think the answer is yes.
Aurora Cannabis (NYSE:ACB) has a well-defined path to profitability. Its near-term goal is to drive down costs by leveraging its massive scale to improve margins. Its medium-term goal is to leverage R&D to work on higher-margin products and to harvest the Canadian cash flow that is generated from its near-term goals. Long-term, the goal is to use extensive R&D to develop and brand higher-margin products.
Wall Street likes ACB stock. Out of the 17 firms that follow it, 10 of them have it ranked either as a buy or overweight. The average target price is more than two times higher than where it is currently trading.
Time To Buy
I have a very strong gut feeling right now, and it’s related to the big opportunity in marijuana stocks. I have been recommending marijuana investments since 2014, well before most analysts. Many of my early recommendations have soared hundreds … even thousands of percent. A colleague of mine even refers to me as “The Original Marijuana Stock Bull.”
Recently, though, some may have questioned my bullish thesis. My long-term view has never wavered, but marijuana stocks have gotten hammered in the last few months. Since hitting a yearly high in March, the ETFMG Alternative Harvest ETF (NYSEARCA: MJ) is down 40%. The weakness has turned even some of the biggest marijuana bulls into doubters, but I think the current pullback represents one of the best buying opportunities we may see for some time if you want to invest in one of the fastest-growing sectors in the world.
In Other News
WeedMD Inc. (TSXV:WMD) entered into an agreement with Mackie Research Capital Corporation as the lead underwriter and sole bookrunner, on its own behalf and on behalf of a syndicate of underwriters, including Haywood Securities Inc., pursuant to which the Underwriters have agreed to purchase, on a bought-deal basis, 10,000 convertible debenture units for gross proceeds to the Company of $10,000,000 at a price of $1,000 per Debenture Unit.
Diego Pellicer Worldwide, Inc. (OTCQB: DPWW), the premium marijuana brand and development company, today announced that it has executed a letter of intent to purchase a cannabis retail store in Denver. The 3,300 square-foot retail location is projected to have gross sales exceeding $8.5 million in 2019 and $9.5 million in gross sales in 2020.
“This is a critical milestone for Diego Pellicer Worldwide. The execution of the LOI in Colorado is the first step in the evolution of our business model. We are delivering on our commitment to become a vertically integrated premium cannabis company. We look forward to working with the Colorado Marijuana Enforcement Division to garner approval for Diego Pellicer Worldwide to become a fully licensed cannabis company, that includes direct ownership in cannabis operations,” said Ron Throgmartin, chief executive officer, Diego Pellicer Worldwide, Inc. “For Diego Pellicer Worldwide to continue to grow, we need to pursue these new avenues of ownership as well as branded cannabis products that will be available at company stores and beyond its branded retail locations.”