Archive for Healthcare

Heathcare and Biotech Updates

Antibody Therapeutics Developer to Present at March Alzheimer’s/Parkinson’s Conference

By The Life Science Report

Source: Streetwise Reports   03/19/2019

The biotech was selected to discuss its antibodies that selectively target toxic forms of alpha-synuclein.

ProMIS Neurosciences Inc. (PMN:TSX; ARFXF:OTCQB) announced in a news release it will present data in support of its new antibody candidates for Parkinson’s disease, at the 2019 Alzheimer’s & Parkinson’s Diseases Congress later this month.

Specifically at the conference, Dr. Neil Cashman, ProMIS’ chief scientific officer, will deliver the podium presentation, “Targeting of Pathogenic Aggregated Alpha-Synuclein: Refining Antibody Epitopes by Design,” on March 31. In it he will use ProMIS’ preclinical data to explain how the company developed antibodies that selectively bind to toxic forms of alpha-synuclein while sparing the healthy forms of it the body needs. The antibodies also block both, in vitro, the neurotoxicity and spread of the toxic forms of alpha-synuclein, which are considered a root cause of Parkinson’s.

On the prior day, March 30, Cashman will co-moderate the panel discussion, “Disease Mechanisms in Alzheimer’s and Parkinson’s Diseases.”

The AD/PD conference will take place March 26 to 31, 2019 in Lisbon, Portugal.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: ProMIS Neurosciences. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of ProMIS Neurosciences, a company mentioned in this article.

( Companies Mentioned: PMN:TSX; ARFXF:OTCQB,
)

Biopharma Expected to Bring ‘Two First-in-Class Antibiotics to Market in 2019’

By The Life Science Report

Source: Streetwise Reports   03/19/2019

The likely timelines for approval and commercialization of each drug are discussed in an H.C. Wainwright report.

In a March 13 research note, H.C. Wainwright & Co. analyst Ed Arce reported that Nabriva Therapeutics Plc (NBRV:NASDAQ) has two antibiotics up for approval this year, which H.C. Wainwright & Co. believes the FDA will grant. The medications are CONTEPO and lefamulin, whose Prescription Drug User Fee Act (PDUFA) dates are April 30 and August 19, respectively.

CONTEPO (intravenous fosfomycin) is a broad-spectrum antibiotic for complicated urinary tract infections. “Importantly, CONTEPO has activity against key multidrug-resistant organisms,” Arce pointed out. CONTEPO has fast track and priority review statuses.

When its PDUFA date arrives in six weeks, CONTEPO is “very likely to be approved by the FDA,” an event that “could represent a meaningful stock catalyst, especially as investors position themselves ahead of the PDUFA of lefamulin,” Arce commented.

In support of such an outcome is the fact that IV fosfomycin is a generic in Europe where, in the 45 years of its use, it has proven to be both safe and efficacious. Also, in the ZEUS clinical trial, CONTEPO was shown to be noninferior to Zosyn (piperacillin-tazobactam).

Should the FDA approve CONTEPO in April, Nabriva is expected to launch it in mid-2019, noted Arce. The company intends to target facilities where antibiotic resistance rates are at a level that warrants use of a new antibiotic. Arce indicated such a “highly targeted approach” is appropriate and would likely result in “early-adopter sales and uptake,” particularly in light of the drug’s long-term history of use outside of the U.S.

However, significant demand-driven growth in sales of CONTEPO realistically will not likely occur until mid-2020, wrote Arce.

As for lefamulin, a larger opportunity with priority review status, according to Arce, it is expected to be approved and then launched in the fall. Nabriva anticipates it and CONTEPO, which are complementary in the hospital setting, will “share call points and utilize the same focused commercial, medical affairs and supply chain infrastructure.”

In other lefamulin news, last month a licensee of the antibiotic, Sinovant Sciences Ltd., submitted a clinical trial application to Chinese regulators seeking approval to evaluate it for community-acquired bacterial pneumonia. That milestone spurred the first payment to Nabriva, which was $1.5 million. Nabriva plans to license lefamulin in additional regions outside of the U.S., such as the European Union and Japan, to generate additional nondilutive capital.

Finally, Arce relayed that in Q4/18, Nabriva reported a net loss of $30.8 million, or $0.46 per basic and diluted share. For 2018, the firm’s net loss was $114.8 million, or $2.26 per basic and diluted share. At year-end 2018, the biopharma had $102.2 million of cash, sufficient to fund operations into Q2/20 according to management.

H.C. Wainwright & Co. has a Buy rating and a price target of $9 per share on Nabriva, which represents a triple, as the stock is currently trading at around $2.98 per share.

Editor’s note: a earlier version of this article incorrectly referred to CONTEPO and lefamulin as vaccines. They are antibiotics. We apologize for this error.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: NBRV:NASDAQ,
)

Cannabis Firm Announces Brand for Recreational Aficionados

By The Life Science Report

Source: Streetwise Reports   03/19/2019

This Canadian company intends to next launch a marketing campaign for the new product suite.

Sproutly Canada Inc. (SPR:CSE; SRUTF:OTCQB) announced in a news release it has a new cannabis brand for the recreational market called CALIBER, “designed for the cannabis connoisseur and delivered via the company’s craft cannabis flower production.”

“It is our belief that there is an opportunity within the consumer space for a premium brand backed by consistent and superior product quality,” Vice President of Marketing and Sales Melise Panetta said in the release.

Under the CALIBER brand, Sproutly will market small-batch flower and smokable products produced at its Toronto Herbal Remedies facility.

Once the company receives a sales license from Health Canada, it intends to launch a campaign for CALIBER that would feature production information and education and provide the vision behind and the highlights of the brand.

“CALIBER is targeted to adults who are looking for a brand distinguished by its consistently premium quality flower and smokable products. As consumers begin to navigate the newly legalized recreational cannabis market, it is our belief that there is an opportunity within the consumer space for a premium brand backed by consistent and superior product quality,” Melise Panetta, vice president of marketing and sales, stated.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Sproutly Canada. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Sproutly Canada. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sproutly Canada, a company mentioned in this article.

( Companies Mentioned: SPR:CSE; SRUTF:OTCQB,
)

Tech Firm to Offer Solution to Inefficient, Expensive Health Clinic Business Model

By The Life Science Report

Source: Streetwise Reports   03/20/2019

The company will roll out virtual, remote medical services to change how primary care practices are run.

Premier Health Group Inc. (PHGI:CSE; PHGRF:OTCQB; 6PH:FSE) plans to offer the medical services of nurses, medical office assistants and office managers virtually and remotely to primary care clinics, first to those in British Columbia that use the Juno EMR system followed by expansion into other provinces. This new offering is made possible by Premier Health’s recent acquisition of Cloud Practice.

Premier Health plans to introduce to Juno EMR users a virtual artificial intelligence (AI)-powered phone assistant along with a shared medical office assistant and office manager system. The former will prioritize and manage many of the repetitive tasks involved in patient care, and the latter will handle the back-end administrative tasks of running the clinic. As an added service, Premier Health will provide its templates for the various manuals required in clinics, such as those for privacy and training.

The news release cites the benefits of using such a suite of virtual services. It should help improve workflow and boost clinic efficiency by managing the electronic medical record documentation, the day-to-day operations and other administrative tasks. It should help reduce the patient backlog and patients’ long wait times. It could improve the quality of care provided and patient outcomes. It should increase revenue by allowing physicians to concentrate on seeing patients, determining diagnoses and devising treatment plans and leaving the other work to nurses, medical assistants and office managers, and not have to pay for dedicated staff to fill those roles.

By Q3/19, Premier Health intends to add remote shared billing services, including detection of missed charges, mistakes and the like.

“These offerings will transform the primary care landscape from a fixed labor cost to a variable cost model that is customized for the individual needs of clinics,” according to the release. “This increased efficiency and lower operating cost will increase the overall profitability of primary care clinics.”

“From my own clinical experience, I see the benefit of offering these services to other privately owned clinics,” said Dr. Essam Hamza, CEO of Premier Health. “We have successfully integrated shared resources across our four HealthVue Medical clinics. With rising labor costs, many clinics simply cannot afford dedicated staffing. With our recent acquisition of Cloud Practice, we have the opportunity to provide virtual and remote services to the 287 clinics currently using Juno EMR.”

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Premier Health Group Inc. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Premier Health Group Inc., a company mentioned in this article.

( Companies Mentioned: PHGI:CSE; PHGRF:OTCQB; 6PH:FSE,
)

5 Small-Caps on Fund Manager Steve Palmer’s Radar Screen

By The Life Science Report

Source: Streetwise Reports   03/19/2019

Steve Palmer, Founding Partner, President and Chief Investment Officer for AlphaNorth Asset Management, talks about a handful of companies in diverse industries that have his attention.

Streetwise Reports: Steve, would you give us an overview of the AlphaNorth Capital Conference?

Steve Palmer: We held our 6th conference in Nassau, Bahamas, in January; it’s focused on small-cap non-resource companies. This past year we had a lot of technology and cannabis companies. There were also healthcare and consumer products companies.

SWR: How many companies attend the conference?

SP: It’s grown every year since we started it. This year we had three tracks with 18 companies in each track.

SWR: Would you tell us about a couple of the companies that you’re excited about?

SP: One that I’m particularly excited about is Vancouver-based Jackpot Digital Inc. (JP:TSX.V; JPOTF:OTCQB; LVH1:FSE). It has developed an electronic poker table that is like a giant touchscreen. It eliminates the requirement for a dealer, so casino operators are very keen to have this because it lowers their costs. Also, with poker there’s some idle time with the players. If you fold early on in the hand, let’s say, you’re just sitting there waiting for everybody else to finish. But at your station, you can switch, and you can play electronic blackjack on the table, for example. So it keeps the players engaged, and it generates more revenue than a typical table would.

SWR: At what stage is the company now? Is its product in use or is it still in the prototype phase?

SP: It has tables in use. It has a new generation table that it’s getting orders for now. It has a bunch of its older generation tables currently in use, mostly on Carnival ships. It has current orders for 30 new generation tables to ship in the next few months. It just did a small private placement to fund the building of those tables.

What’s exciting about Jackpot Digital is the product, and it’s getting lots of new orders now. It’s at an inflection point, in my view, of turning cash flow positive. When these tables go out, they are expected to generate about $5,000 per month each to the company.

SWR: The company receives a share of the earnings of the table?

SP: Yes, that’s how it works in most places. Jackpot Digital has recently won some orders in France, where the rules are different. The casino industry is very regulated, and in France you’re not allowed to take a share of the winnings. So Jackpot sells the tables outright, and it’s building a couple for there right now.

We’re pretty excited about the company; it’s just getting to the critical mass now where it’s going to be cash flow positive and the momentum on the table orders is ramping up. The biggest hurdle the company faces is having enough working capital to facilitate orders, which is a good problem to have.

SWR: What is the next company you’d like to talk about?

SP: Another company at the conference I like is in the cannabis sector. I don’t normally talk about cannabis companies because I’m not a huge fan of the sector in general. It’s LiveWell Canada Inc. (LVWL:CSE; LXLLF:OTCMKTS). Its shares are currently halted. It’s going to be a CBD extraction company, and it’s going to be one of the largest producers of cannabidiol (CBD) oil using hemp. The change with the Farm Bill in the U.S. has really ignited this industry, and there’s a huge demand. LiveWell is getting very good margins, and it’s just ramping up a big facility in Montana to produce CBD oil.

The numbers are actually quite silly, if you believe them, in terms of what the going rate is for CBD oil and the volumes that these guys are going to be able to produce.

SWR: Do you expect, as more CBD oil comes out onto the market, that prices might go to a more reasonable level? Are states regulating prices?

SP: The states are not meddling in the pricing. It’s the supply and demand that’s created a very strong pricing environment. I’ve asked many of the operators in the space about it because obviously these prices can’t stay where they are indefinitely. People involved in the space believe that there’s going to be maybe a two- to three-year window where prices will stay where they’re at until the supply catches up to the demand. But you’re right, over the longer term, these kind of prices won’t last. For example, CBD oil sells for $6,500–10,000 per kilogram; that’s the going rate right now. And it’s been at that level for many months. And LiveWell is producing at less than $500/kg, so it has very strong margins.

LiveWell is currently merging with a company called Vitality CBD Natural Health Products Inc., and that’s expected to close in the next few weeks. It is guiding to having the stock back trading in March. So I’m excited to see, when it starts trading, how investors react to that.

SWR: Is this a merger of equals or is LiveWell acquiring Vitality?

SP: It’s a reverse takeover situation, and Vitality’s the bigger entity. It is acquiring LiveWell.

SWR: You mentioned LiveWell is building a large facility in Montana. Does it have other facilities also at this point?

SP: LiveWell is producing currently out of another, much smaller facility. The Montana facility is going to have a huge capacity. LiveWell announced recently that it produced 200 kg of CBD equivalent in the first week of February. It expects to ramp that up to 200 kg per day by the second half of 2019. So if you do the math on that, at US$6,500 per kg, that’s US$1.3 million a day in product. So you can get to some pretty big numbers.

SWR: Is there anything else you want us to know about this company?

SP: Just that its numbers look very attractive to me based on the current pricing environment and it should be trading sometime this month. It has plans for a U.S. listing shortly thereafter. So it could be quite an exciting one to watch.

SWR: What is the next company?

SP: Another one I like that was at the conference is Assure Holdings Corp. (IOM:TSX.V; ARHH:OTCQB). This is an interesting one because it has some decent revenue already. It has equipment for neuromonitoring certain surgical procedures, and it’s only in one or two states at the moment. But it has expansion plans to move into other states in the United States. Revenue in 2018 was about $25 million with roughly $15 million in earnings. The revenue growth profile, once it starts adding these other states, is quite significant.The company is forecasting a 70% increase in revenue growth for 2019.

SWR: Any other companies you would like to mention?

SP: Avivagen Inc. (VIV:TSX.V) is worth talking about; it’s fairly timely. The company recently received a very significant order in the U.S. for its product, OxC-beta. It’s a proprietary supplement that it has developed that it can put into animal feed, and the trials have shown that the animals, compared to the control group, are healthier and they grow more quickly. It eliminates the need, in many cases, for adding antibiotics to the animal feed.

My understanding is the initial volumes for the U.S. are fairly significant. It has been selling into East Asia, the Philippines mainly, for the last several quarters, and that’s been ramping nicely. But the U.S. market is much larger, the second largest market in the world, I believe, for animal feed. So we think this is going to be a huge catalyst for the company. The third largest market in the world is Brazil, and we think that it will probably follow suit in ordering product now that the U.S. seems to be on board. There have been many trials that show that the product works. There’s a big initiative to cut back on the use of antibiotics in animals, and this is a theme that we like.

SWR: Do you have a final company for us?

SP: Yes, I could mention one more. It’s a Vancouver-based electric bus manufacturer, GreenPower Motor Company Inc. (GPV:TSX.V; GPVRF:OTCQX). It’s making great gains. It’s one of the few companies that I’ve come across in the last year that has actually exceeded its expectations in guidance. It is selling buses mainly into the California market, where there are huge incentives for school districts and other transportation municipalities to switch to electric buses. It is ramping up production this year. It should more than triple revenue in 2019 versus 2018.

SWR: Thanks for your insights, Steve.

Steve Palmer is a Founding Partner, President and Chief Investment Officer of AlphaNorth Asset Management and currently manages the award-winning AlphaNorth Partners Fund, AlphaNorth Growth Fund and AlphaNorth Resource Fund. Prior to founding AlphaNorth in 2007, Palmer was employed as Vice President at one of the world’s largest financial institutions, where he managed equity assets of approximately CA$350M. Palmer managed a pooled fund, which focused on Canadian small-capitalization companies, from its inception to August 2007, achieving returns of 35.8% annualized over a nine-year period, which ranked it No. 1 in performance by a major fund ranking service in its small-cap, pooled-fund category. Palmer earned a bachelor’s degree in economics from the University of Western Ontario and is a Chartered Financial Analyst.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this interview are billboard sponsors of Streetwise Reports: Avivagen. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Avivagen. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Steve Palmer: I, or members of my immediate household or family, and/or AlphaNorth funds, own shares of the following companies mentioned in this article: All of the companies mentioned. I, or members of my immediate household or family, are paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this interview: None. I determined which companies would be included in this article based on my research and understanding of the sector. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Avivagen, Jackpot Digital and Assure Holdings, companies mentioned in this article.

( Companies Mentioned: IOM:TSX.V; ARHH:OTCQB,
VIV:TSX.V,
GPV:TSX.V; GPVRF:OTCQX,
JP:TSX.V; JPOTF:OTCQB; LVH1:FSE,
LVWL:CSE; LXLLF:OTCMKTS,
)

Disruptive Delivery Company Signs Deal for Cannabis Distribution

By The Life Science Report

Source: Clive Maund for Streetwise Reports   03/15/2019

Technical analyst Clive Maund discusses both the fundamentals and technicals for this company that just signed a cannabis distribution agreement with a Vancouver-based retailer.We have big news out on one of our stocks, ParcelPal Technology Inc. (PKG:CSE; PTNYF:OTC.MKTS; PT0:FSE). This is a most promising stock that we first looked at in some detail on 15th February. The company announced just yesterday that it has signed a cannabis distribution agreement with Kiaro, a Vancouver based cannabis retailer. This accords with the company’s business expansion strategy for Canada as set out on the map from the company presentation shown below.


And that’s Canada—the company also plans to expand into the U.S., and with respect to this we have additional good news out a couple of days ago from one of ParcelPal’s important business partners, Choom Holdings. The news relating to Kiaro linked above builds on an earlier similar agreement with Choom Holdings made last Fall. This is going to be big business because a lot of customers are not going to want to go down to a store, especially for this kind of product—they are going to want home delivery, and before the advent of ParcelPal cannabis delivery was expensive and antiquated, with it sometimes taking more than a week for product to arrive. ParcelPal delivers within the hour, unless you live out in the boonies. Choom is expanding rapidly and just a couple of days ago its stock surged on news that it is entering the U.S. market with an agreement with a New Jersey retailer.

This is big news for ParcelPal because Choom has, it is believed, an exclusive agreement for delivery of its products by ParcelPal, whose business model suits Choom perfectly, as it wants its products delivered efficiently, quickly and safely to its customers. Here it is worth pointing out that ParcelPal is in discussion with some of the heavyweights in the business like Aphria, Canopy Growth Corp and Organigram (it is not known specifically which companies) who are likely to select ParcelPal to deliver their products for the same reasons as Choom, although they are obviously on a much larger scale. Here’s what happened to Choom’s stock on the news that it is expanding into New Jersey.


As if all this wasn’t enough, ParcelPal appointed respected and influential Brian Storseth as chairman of the board of the company on 27th February. Storseth was a figure in the Canadian Parliament.

Now to review the latest charts for ParcelPal: the annotated charts below tell the story, but there are two main points to note. The first is that the 3-year chart shows that ParcelPal has a marked tendency to spike dramatically. The second is that the 6-month chart shows that it is now in position to do just that, with a Cup & Handle base having now completed and the bullish volume pattern and rising accumulation line suggesting that breakout is now imminent. So we stay long and ParcelPal looks a stronger buy than ever here. ParcelPal trades in reasonable volumes on the U.S. OTC market.


ParcelPal Technology website.

ParcelPal Technology Inc, PKG.CSX, PTNYF on OTC, closed at C$0.31, $0.227 on 13th March 19.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with ParcelPal. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of ParcelPal Technologies, a company mentioned in this article.

Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Health Tech Firm Completes Enrollment for Female Sexual Function Trial

By The Life Science Report

Source: Streetwise Reports   03/15/2019

A Ladenburg Thalmann report reviewed the study design and purpose.

In March 11 research note, Ladenburg Thalmann analyst Jeffrey Cohen reported that Viveve Medical Inc. (VIVE:NASDAQ) finished enrollment for the VIVEVE II trial of 250 patients across 19 clinical locations in the U.S. and Canada, thereby continuing to advance its clinical programs.

This is the second study for which the biotech completed enrollment this year. The other one, in January, was the LIBERATE-International trial.

“We believe the company has made strong clinical progress and anticipate VIVEVE II data to be released during H1/20,” he commented.

VIVEVE II, a randomized, double-blinded study, aims to evaluate the safety and efficacy of cryogen-cooled monopolar radiofrequency technology in improving sexual function in women after having given birth vaginally. There are two primary endpoints. One is safety. The other is the mean change from baseline with respect to the female sexual function index (FSFI). Secondary endpoints include improvements in FSFI scores on desire, arousal, lubrication, satisfaction and pain.

Ladenburg Thalmann has a Buy rating and a $4 target price on Viveve, whose stock is currently trading at around $0.87 per share.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Viveve Medical, a company mentioned in this article.

Disclosures from Ladenburg Thalmann, Viveve Medical Inc., March 11, 2019

ANALYST CERTIFICATION: I, Jeffrey S. Cohen, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report, provided, however, that:

The research analyst primarily responsible for the preparation of this research report has or will receive compensation based upon various factors, including the volume of trading at the firm in the subject security, as well as the firm’s total revenues, a portion of which is generated by investment banking activities.

COMPANY SPECIFIC DISCLOSURES:

Ladenburg Thalmann & Co. Inc. makes a market in Viveve Medical, Inc.

Ladenburg Thalmann & Co. Inc. has managed or co-managed a public offering for Viveve Medical, Inc. within the past 12 months.

Ladenburg Thalmann & Co. Inc received compensation for investment banking services from Viveve Medical, Inc. within the past 12 months.

Ladenburg Thalmann & Co. Inc had an investment banking relationship with Viveve Medical, Inc. within the last 12 months.

( Companies Mentioned: VIVE:NASDAQ,
)

Logistics Firm Moves Further Toward Becoming ‘Uber of Cannabis for Canada’

By The Life Science Report

Source: Streetwise Reports   03/14/2019

This company forges partnerships with cannabis companies to deliver, within an hour, their products to customers.

ParcelPal Technology Inc. (PKG:CSE; PTNYF:OTC.MKTS; PT0:FSE) announced in a news release it signed an agreement with Kiaro Cannabis to distribute its cannabis products in Canada. ParcelPal is a technology-driven logistics company; Kiaro is a Vancouver-based cannabis retailer.

“Our objective is to become the Uber of cannabis for Canada, and this takes us one step closer to our goal,” ParcelPal President and CEO Kelly Abbott said in the release.

Through this collaboration, ParcelPal will deliver Kiaro’s cannabis orders directly to customers. And customers will receive their products within an hour. This compares to the alternative of using a more traditional delivery service, which can take up to seven days.

The companies stated that the initiative consists of:

  • Distribution: ParcelPal and Kiaro will jointly develop an optimal roadmap for the distribution of adult use cannabis, ultimately creating the “Amazon Effect” within the cannabis industry.
  • Accessibility: The companies will integrate their technology platform to enhance the user experience and improve product accessibility.
  • Compliance: All cannabis products delivered will be within parameters set by all the relevant regulatory bodies.
  • Safety: Both companies are dedicated to socially responsible cannabis retail and, by enabling cannabis delivery within the hour, hope to deter cannabis impaired driving.

Customers can order Kiaro’s products either through ParcelPal or Kiaro’s online platforms. Those ordering through ParcelPal will have to upload and verify their identity, upon ordering and at delivery, and be present to receive the delivered goods.

“Our technology enables seamless integration with any retail outlet or e-commerce platform for cannabis,” Abbott added.

President and CEO of Kiaro, Daniel Petrov stated, “The distribution partnership with ParcelPal illustrates our ongoing commitment to normalize cannabis use, by improving product accessibility.”

The distribution agreement is ParcelPal’s second that is aimed at capturing share of the cannabis distribution market in Canada; the first is with Choom Holdings Inc. (CHOO:CSE; CHOOF:OTC).

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with ParcelPal. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of ParcelPal, a company mentioned in this article.

( Companies Mentioned: PKG:CSE; PTNYF:OTC.MKTS; PT0:FSE,
)

Tech Firm Launches Augmented Reality Showcase for Legal Cannabis Products

By The Life Science Report

Source: Streetwise Reports   03/14/2019

The new platform promises to provide a unique e-commerce experience in the legal cannabis industry, combining customer education and support for online transactions.

NexTech AR Solutions Corp. (NTAR:CSE; NEXCF:OTCQB) launched a platform that enables legal cannabis sellers to showcase their products in an augmented reality (AR) and three-dimensional (3D) 360-degree photography experience, the company announced in a March 12 news release.

The company explained that its “AR Dispensary”—the name of the platform—provides legal cannabis dispensaries a technology tool to empower customers and potential customers to educate themselves before entering a dispensary, where the traditional education on the potential health benefits of cannabis has taken place.

“When people are planning to make a purchase both in-store and online, many are using the internet to research products to ensure they’re making the right purchasing decision. We do it with clothes, electronics, and other consumer goods—why should cannabis be any different?” asked NextTech CEO Evan Gappelberg.

Besides enabling an AR and 3D preview of cannabis products, the AR Dispensary supports features for online ordering and pickups or deliveries to markets that allow it, “creating a complete digital dispensary experience,” according to the company.

“Whether a dispensary’s goal is to educate customers on potential health benefits of cannabis or simply increase sales, AR Dispensary provides the interactive online experience consumers crave that drives brand loyalty and awareness,” Gappelberg commented.

Worldwide spending on legal cannabis is expected to reach $57 billion by 2027, recalled NextTech. “On-demand interactive AR experiences are the next step towards improving customers’ path to purchase,” it stated.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Mario Santana compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: NexTech AR Solutions. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of NexTech AR Solutions, a company mentioned in this article.

( Companies Mentioned: NTAR:CSE; NEXCF:OTCQB,
)

Marijuana: Up in Smoke

By The Life Science Report

Source: Ron Struthers for Streetwise Reports   03/13/2019

Sector expert Ron Struthers takes a look at a spectrum of cannabis companies, including one company that’s gone from a high to a downer, a sector leader, and a firm that promotes CBDs as good for sex.

Some younger folk might not know the Cheech and Chong movie, Up in Smoke. It was a 1978 stoner comedy that received mixed to negative reviews at the time. Nevertheless it was a success and is now considered a classic. As I remember it was about a couple of bumbling stoners that could not do much right and only a little more so when they were stoned.

It now reminds me of Canada’s version of marijuana legalization. Perhaps the legislators should have been stoned when they made this policy change, because they sure screwed it up. There are excessive rules and legislation around growing marijuana. However the biggest mistake, at least so far, is a very poor retail market for recreational use. Ontario is the largest province in Canada, with about 40% of the population, and is now putting plans in place to open the first 25 marijuana stores. It was a lottery and many of the winners have no or very little retail or business experience.

The biggest joke is the low number. I can drive about 20 minutes down the highway from where I live to the First Nations reserve, where there are over 50 outlets operating and they are all busy. Since legalization, users are not concerned with transporting marijuana they buy on the reserve. Many are driving one to two hours to get it. The product, for the most part, comes from the black market. Just one outlet, Legacy 420, claims it has revenue of about $20 million per year, and that was before legalization.

Many have compared the size of the marijuana market to the beer and wine or alcohol market. According to the Liquor Control Board of Ontario’s (LCBO’s) latest report, there are 2,332 retail outlets in Ontario, compared to 25 future marijuana outlets. Are you laughing yet? I hope that when CBD-infused beverages are legalized later this year, they simply put them on the shelves of the LCBO, but that would be too simple and cost-effective.

With inflated prices, bans on edibles, heavy regulation of cultivators and limits on private retailing, consumers continue dialing up their friendly neighborhood dealer to avoid all that. The Canadian and Ontario legal marijuana market is going to take many years to gain substantial ground on the black market. I believe it is important for investors to focus on companies who are expanding or focused outside of Canada, are establishing brands and are not affected by the restrictions in the Canadian retail market. This is also a follow up on my Oct. 4 report on the sector, where I warned that overinflated stocks were due for a correction.

Both the Canadian and U.S. marijuana indexes had a very significant plunge after my Oct. 4 report and have now bounced up. The Canadian index peaked in January 2018 and had a bear market rally to the October 2018 high. It then plunged to new bear market lows in December 2018. The current rally looks like another bear rally.

By contrast the U.S. marijuana index made a new bull market high in October 2018. The jury is still out on whether the index can make new highs. As long as the index holds above the 105–110 area all is good, but a drop below that level could signal a more substantial correction. The moves in both indexes are often volatile, moving over 20% in either direction.

Let’s look at some previous stocks I commented on and a couple new ones.

Canopy Growth Corp. (WEED:TSX; TWMJF:OTC.MKTS); market cap US$15.5 billion

Canopy has done a lot of diversification outside Canada. In mid-January it made a $150 million investment to develop large-scale hemp production in New York state.

On Feb. 7, Canopy announced it is increasing its interest in Canopy Rivers from 26.5% to 27.3%. Canopy Rivers works collaboratively with Canopy Growth to identify strategic counterparties seeking financial and/or operating support and affiliation with the Canopy Growth group of companies. This helps to build the Canopy brand and also provides diversification outside Canada.

According to the company, Canopy Rivers has recently expanded its portfolio by making several innovative investments in the cannabis market worldwide, including:

  • An equity interest in Headset, a real-time data and analytics company;
  • Financing of Greenhouse Juice Company, a health and wellness beverage company;
  • Increasing its ownership in Canapar, an Italy-based hemp production and processing platform capitalizing on the rapidly expanding European CBD (cannabidiol) market.

On Jan. 21, Canopy updated its operations in Poland and the U.K. According to the company release, in the United Kingdom, Canopy formed Spectrum Biomedical U.K., a new company focused on providing access to cannabis-based medicinal products to United Kingdom patients with severe unmet clinical need. In addition to expanding its medicinal cannabis operations in the United Kingdom, Canopy Growth’s Torun-based team, Spectrum Cannabis Polska in Poland, successfully completed its first import of medical cannabis after completing a rigorous regulatory approval process to have the product assessed and approved for sale.

On Feb. 28 Canopy and Sequential Brands Group (SQBG) announced “Martha Stewart has joined the company in an advisory role to assist with developing and positioning a broad new line of product offerings across multiple categories. With decades of success in publishing, broadcasting, online and merchandising, Martha Stewart has firmly cemented herself as one of the most well-respected businesswomen in the United States.”

Canopy reported excellent Q3 results on Feb. 14 in Canadian dollars. It was the first full quarter of recreational sales in Canada and revenue increased to $83 million, up 256% from the previous quarter. The company sold 10,102 kilograms of cannabis and oil equivalent. The company is still losing money and my first concern was that the great quarter was due to inventory drawdown in anticipation of legalization. However, inventory at Dec. 31 was $184,961,000, up from $150,406,000 reported Sept. 30, so that was good to see.

I have no doubt Canopy will be a leader and one of the best brands in the cannabis space, but investors are already paying the price for it. At the current annual revenue run rate and subtracting $4 billion cash from the market cap, the stock is trading around 50 times revenue. This is very expensive, but is often the case with high growth stocks where investors are pricing the stock on much higher future revenues and earnings. Once there is a whiff of slower growth, the stock will sell off hard. That is the risk before and on the next quarterly report, as I believe it will be very difficult for Canopy to report triple-digit growth over the last quarter.

This chart is in US$ price and I see heavy resistance in the $50 to $55 area, which the stock has already tested in this rally. I see some support around $42 and strong support around $30. I see too much risk to be long now, and if you are, I would look to exit on a rally to $49 and a stop/loss at $42.

Tilray Inc. (TLRY:NASDAQ); market cap $6.5 billion

The stock has dropped over 50% since my warning that it was way too expensive in early October 2018, and I still can’t find a good reason to own it. There is simply too much hype on this stock and even on the company’s website it is hard to wade through and find the real news. It is making some good moves though, taking advantage of its high share valuation and cash.

On Feb. 28 the company closed the acquisition of Manitoba Harvest. “Founded in 1998, Manitoba Harvest is the world’s largest hemp food manufacturer and a leader in the natural foods industry. It produces, manufactures, markets and distributes a broad-based portfolio of hemp-based consumer products, which are sold in over 16,000 stores at major retailers across the U.S. and Canada.”

On March 3 Tilray announced its wholly owned subsidiary, “Tilray Portugal Unipessoal Lda (Tilray Portugal) has completed a successful harvest of medical cannabis at the Company’s European Union (EU) Campus in Portugal.”

To help build its brand, on Jan. 15 Tilray announced it has signed a long-term revenue sharing agreement to market and distribute a portfolio of consumer cannabis products within Authentic Brands Group’s (ABG’s) brand portfolio in jurisdictions where regulations permit.

In the release, Tilray states, “As the owner of more than 50 brands, ABG builds value by partnering with an expansive network of best-in-class manufacturers, operators and retailers. With a global retail footprint of over 100,000 points of sale and more than 4,500 branded freestanding stores and shop-in-shops, ABG’s portfolio generates approximately US$9 billion in retail sales annually.”

Tilray is licensed to produce medial cannabis in Chile and through its Tilray Latin America subsidiary can import and distribute products in Chile and Brazil. Tilray currently has medical cannabis products in 12 countries through subsidiaries in Australia and New Zealand, Canada Germany and Portugal, along with Latin America. Given the direction Tilray is heading, with global ambitions, it should be compared to the likes of Canopy and Aurora Cannabis Inc. (ACB), but it falls far short.

Tilray will report Q4 and year-end earnings on March 18. Its Q3 results, reported on Nov. 13, 2018, came in at US$10.0 million in revenue and it had cash of $104 million. Tilray completed $475 million in convertible senior notes in October 2018 to bolster its cash position. At a $40 million revenue annual run rate, the stock is trading at 150 times annual revenue, which is about three times the price of Canopy using this comparable.

The stock is still too expensive and the chart shows it could be on the verge of a technical break down. The stock price is just above a good support level at $65. A close at $64 or lower would be a bad sign, without much support until it drops to around the $25 area. That is where I expect the stock is headed and the March 18 earnings report could be the catalyst to get it started.

Valens Groworks Corp. (VGW:CSE; MYMSF:OTC ): 93.2 million (93.2M) shares out; market cap CA$280M; cash on hand $41M

A company that has something in common with both Canopy and Tilray is Valens Groworks. Valens’ expertise is in extraction to produce oils and resins, with a current annual capacity to process 240,000 kilograms of dried cannabis. They are recognized as a leader in this regard and have agreements with many large cannabis producers.

On Dec. 13, 2018, Valens announced a deal to provide multiyear extraction services for Canopy Growth, and on Feb. 26, 2019, announced a multiyear deal with Tilray for a minimum of 15,000 kilograms (15,000 kg) of dried cannabis per year.

Valens has announced numerous similar deals with Organigram, Sundial Growers, Harvest One and, most recently, on March 11, with Green Organic Dutchman, who will supply Valens with an annual minimum of 30,000 kg in the first year and 50,000 kg in year two.

Valens does not require big grow facilities and will benefit from the much higher margins on cannabis oil. Its proprietary extraction process is boasted as the best and most efficient on the market. Investors are able to attest to this with the ISO 17025 certification, the Thermo Fisher award and supply deals with Canopy Growth, Tilray and many others.

This graphic is a slide from the Valens presentation.

There are many advantages to a focus on oils and resins, such as:

  • a longer shelf life compared to the flower;
  • aging flower can be bought at a discount;
  • numerous uses as shown above;
  • higher margins on oils and resins.

An obvious way you can verify the higher margins is looking at any of the LPs recent financials that are selling oils. They all claim increased dollar values per gram sold, and attribute this increase to higher ratios of oil and concentrate sales.

There has been much hype in the market about the Constellation deal with Canopy for beverages, Molson Coors Canada, and speculation about Coca-Cola. Valens is already positioned as well or better than anyone for the beverage market in 2019. Its multiyear deal with Tarukino Holdings gives Valens access to Tarukino’s proprietary emulsion technology, which transforms cannabis into a water-soluble form for beverages while masking any cannabis taste. Valens also has the distribution rights in Canada for Tarukino’s popular Happy Apple drink, Washington State’s #1 selling cannabis infused drink three years in a row, and Pearl20, which can be used to mix drinks and edibles.

Tarulino’s SōRSE emulsion technology surrounds oils, transforming the entire solution into water-compatible forms. All of this means you can add cannabis to products, including beverages, without that “weed” taste or smell. The product also:

  • is shelf stable for over 180 days (not proven anywhere else);
  • has zero cannabis taste, color or odor;
  • provides effective, consistent dosing;
  • has lower dosage due to an increase in bio-availability when consumed;
  • has a faster onset and offset, making it the safer and more trusted edible option.

Oil usage has grown at faster rates than flower usage since soon after recreational legalization. You will find this is the case in Colorado, Washington and other legal states. Also note that Canopy reported oils at 33% of revenue, up from 23% in the same period last year, which further attests to this.

Canopy sold 10,102 kg of cannabis equivalent in the latest quarter, which would be 40,408 kg in a year. Valens is able to process 250,000 kg per year, and just its deal with Green Organic Dutchman, and Tilray is at 45,000 kg in the first year. In essence Valens will be processing and selling more kilograms of cannabis equivalent than a number of the major producers combined.

Valens will not post the large revenues of selling a lot of consumer end product (flower) but will be capturing the margins on flower to oil, which are quite large. Its input costs are much lower and Valens is most likely to be more profitable than the big LPs. In its presentation, Altacorp Capital is shown as initiating coverage with revenue estimate of $43.5 million in 2019 and $118.7 million in 2020.

Subtract $40 million cash from the $280 million market cap and the stock is trading at only five times projected 2019 revenues, very cheap in comparison to most.

It is also worth noting that Valens Labs has a Health Canada Dealers license, is the first ISO 17025 accredited lab in Canada for a cannabis matrix and has been named a “Center of Excellence in Plant Based Science” by Thermo Fischer Scientific.

Valens Farms’ B.C. cultivation
This was a great deal for Valens because its a zero cash outlay, with Kosha contributing 100% of land, building and equipment costs. All hard assets will be split 50/50 between Kosha and Valens, thereby providing $37.5 million of net assets to Valens’ balance sheet with no cash outlay or liability incurred. Valens and Kosha will split profits on a 50/50 basis following cost recovery by Kosha. Valens Farms is expecting Phase 1 production of up to 56,000 kg per year of premium monocrop cannabis, primarily for extraction purposes. This will be exclusively extracted by Valens and made into Valens branded products.

The stock trades more volume on the Canadian side under symbol VGW, but this US$ price chart shows a higher close, and trading above US$2.25 in February, so a technical breakout. The recent pullback is a decent entry level and has established some support around $1.80. A close above $2.45 would be very positive.

RISE Life Science Corp. (RLSC:CSE) is quite interesting and a hidden gem

Volumes are light, so it may take some patience to buy below US$0.25. The stock also trades in Canada; its market cap is CA$13 million.

If you speak with any pothead, they will tell you that cannabis can cure anything and is good for everything, including better sex. RISE does not have any cannabis production but has developed its own brand of wellness products, including some for sexual enhancement. They say “sex sells,” so this could be a nice advantage for RISE.

RISE just started sales in Southern California in June/July, so its last financials only reflect about one month of sales, which was CA$141,783. The company has just raised CA$5.5 million and have expanded into Mexico. We will need to see at least a couple quarters of sales revenues to get an idea how its products are moving

In the end of January Greg Mills, formerly head of RBC Capital Markets’ global equities, joined the RISE board of directors. According to the announcement, “Mills joined RBC in 1998 as head of equity trading, and in 2005 was promoted to head of global equities and served in that position until 2018. Mills’ key responsibilities included business planning, risk management, global profit and loss, client relationships employee governance and equity research.”

In early February RISE selected Solcanna SA de CV to act as a distributor of its Life Bloom Organics brand of cannabidiol-based health and wellness products in Mexico. According to the announcement, “The initial purchase order executed with Solcanna will see Life Bloom Organics’ wellness formulation initially placed in three key Mexican markets: Mexico City, Guadalajara and Monterrey. . .Solcanna and RISE have planned this launch in the Mexican marketplace with an initial order of approximately $350,000 to place product at retailers in Mexico City, Guadalajara and Monterrey. The expectation is for recurring orders to be placed, additional Mexican markets to be launched, and additional products to be added to RISE’s Mexican portfolio.”

The announcement goes on to state, “Delivery of product to Solcanna is subject to regulatory approval from COFEPRIS, the Mexican Secretariat of Health’s agency responsible for the regulation of a variety of food- and health-related products in Mexico, to which application has been made.” Mexico is a huge market with a population of over 123 million people and the government is moving toward legalization. The government controls the house, so no major setbacks are expected with the legislation.

Products
Life Bloom Organics’ proprietary Nano hemp extract oral sprays can be found at natural health food markets, chiropractic offices, specialty retailers and medical dispensaries in Southern California, as well as online.

The U.S. farm bill is a direct and significant benefit for RISE Life Science
In its statement on the farm bill, the company noted “RISE’s lifestyle product brands, Life Bloom Organics and Karezza, feature hemp-extracted cannabidiol oil. Using industrial hemp—the same material legalized by the 2019 Farm Bill—has allowed their products to be available to all U.S. consumers, with shipping offered to all 50 states. Using industrial hemp in their formulations also means that the RISE Life Science brands will benefit from continued and even greater access to quality raw plant materials. The farm bill helps support hemp farmers by providing them with agricultural benefits and support not previously available.”

I believe the Karezza product line differentiates RISE from most or all competitors. On July 12, 2018, RISE acquired Cultivate Kind. “This added significant in-market expertise, provides immediate revenue to the company and brings U.S. distribution capabilities in-house. Cultivate Kind was born from the traditional CPG agency world, and brings over 30 years of consumer marketing experience and brand launch strategy to the RISE portfolio. For any start up with products, marketing experience is essential.”

I believe RISE is positioned very well in this new cannabis market and the stock prices has not reflected that yet. There is more trading on the Canadian side so I show that chart. There is an uptrend in place and the pullback from recent highs gives a better entry price. It will probably take prices over $0.40 for liquidity to improve.

Ron Struthers founded Struthers’ Resource Stock Report 23 years ago. The report covers senior and junior companies with ample trading liquidity. He started his Millennium Index of dividend stocks in 2003 – $1,000 invested then was worth over $4,000 end of 2014 and the index returned 26.8% in 2016. He retired from IBM after 30 years in customer service, systems and business analyst, also developing his own charting software. He has expertise in junior start-ups and was a co-founder of Paramount Gold and Silver.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Ron Struthers: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Valens Groworks and Rise Life Science. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: Valens Groworks and Rise Life Science are advertisers at playstocks.net. Additional disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Charts and images provided by the author.

 

Struther’s Resource Stock Report: All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.

(c) Copyright 2019, Struther’s Resource Stock Report

( Companies Mentioned: WEED:TSX; TWMJF:OTC.MKTS,
RLSC:CSE,
TLRY:NASDAQ,
VGW:CSE; MYMSF:OTC ,
)