Bank of America analyst, Christopher Carey, has begun coverage of the cannabis industry with a note Wednesday naming Hexo Corp. (HEXO) as the firm’s top pick in the space. B of A is the latest firm legitimizing the once illegitimate cash crop. Looking for new companies in the space, we came across one that has had quite a bit of price action recently making it a potential profit center for savvy investors.
THC Therapeutics, Inc. (THCT) just received full patent protection on their cannabis dryer. All 20 claims from the US patent office were accepted and will be using their patented designs to carve out their piece of the legal cannabis market expected to reach $146.4 billion by 2025. The company’s dHydronator can reduce moisture content of cannabis to 10% in only 10-14 hours. Companies with products like THCT could help solve the industry’s quality control problem.
Today we are highlighting: THC Therapeutics, Inc. (THCT), HEXO Corp (HEXO), Auxly Cannabis Group Inc. (CBWTF), Aphria Inc. (APHA) and Aurora Cannabis, Inc. (ACB).
THC Therapeutics, Inc. (THCT) (Market Cap: $121.281M; Share Price: $9.08) has developed a sanitizing herb dryer, The dHydronator®. Their laboratory-proven product is specifically designed for drying and sanitizing freshly harvested cannabis and herbs. THCT’s product has been tested by two independent laboratories. The testing covered over 6 strains and 9 independent tests to confirm the findings. Over the 9 tests and 6 strains, there was a 4% average increase of THC-A*.
The US patent office has accepted ALL 20 claims for The dHydronator®. The company has received full patent protection for the dHydronator®; this is big. Start your research today.
HEXO Corp (HEXO) (Market Cap: $1.419B; Share Price: $6.76) and Newstrike Brands Ltd. (“Newstrike”) (TSX-V: HIP) had announced in March that they had entered into a definitive arrangement agreement (the “Arrangement Agreement”) under which HEXO will acquire all of Newstrike’s issued and outstanding common shares in an all-share transaction valued at approximately $263 million. The Transaction gives HEXO the capacity to produce approximately 150,000 kg of high-quality cannabis annually. The Transaction also provides HEXO access to four cutting-edge production campuses totaling close to 1.8 million sq. ft. of near-term cultivation space and diversified growing and production techniques. This is in addition to HEXO’s 579,000 sq. ft. facility for a manufacturing and product development center of excellence in Belleville, Ontario. HEXO Corp has its headquarters in Gatineau Canada and it produces and sells most of its cannabis products in the country.
The Brantford, Ontario-based Newstrike Brands were granted a cultivation license on 16 December 2016 and the company expects its harvest to be about 42,000 kg of cannabis. Although the company has not been around for long compared to HEXO, it has high capacity for cannabis production. HEXO recently announced that it had completed the first harvest in its 1 million sq. ft. expansion, marking an important execution milestone in the Company’s continuous growth.
HEXO Corp., through its subsidiary, HEXO Operations Inc., produces, markets, and sells cannabis in Canada. The company offers dried cannabis under the Time of Day and H2 lines; Elixir, a cannabis oil sublingual mist product line; and Decarb, an activated fine-milled cannabis powder product. It provides its products under the HEXO and Hydropothecary brand names. The company serves medical and adult-use markets. As one of the largest licensed cannabis companies in Canada, HEXO Corp operates with 1.8 million sq. ft of facilities in Ontario and Quebec and a foothold in Greece to establish a Eurozone processing, production and distribution center.
Auxly Cannabis Group Inc. (CBWTF) (Market Cap: $377.528M; Share Price: $0.62279) recently released its fourth quarter and full year 2018 financial results. These filings and additional information regarding Auxly are available for review on SEDAR. For the year ended December 31, 2018, Auxly recognized $747,000 of research revenues from the recently completed acquisition of KGK in the third quarter of 2018. Auxly realized a gross loss of $188,000 in 2018 comprised of revenues less KGK expenses of $1,078,000 in support of third-party research contracts.
Today, it announced that its wholly-owned subsidiary, Robinsons Cannabis Inc. (“Robinsons”), has been granted standard cultivation and processing licenses by Health Canada pursuant to the Cannabis Act and Cannabis Regulations. The licenses give Robinsons the ability to begin cultivation at its fully constructed 27,700 square-foot facility in Kentville, Nova Scotia, which was purpose-built to produce high-quality cannabis.
Auxly Cannabis Group Inc. operates as a cannabis streaming company. It provides funding for cannabis production and holds contractual rights and minority equity interest relating to the operation of cannabis facilities. The company was formerly known as Cannabis Wheaton Income Corp. and changed its name to Auxly Cannabis Group Inc. in June 2018. Auxly Cannabis Group Inc. was incorporated in 1987 and is headquartered in Vancouver, Canada.
Aphria Inc. (APHA) (Market Cap: $1.925B; Share Price: $7.65)announced on April 5 that its German subsidiary, Aphria Deutschland GmbH, has been selected by the German Federal Institute for Drugs and Medical Devices to receive a license for the domestic cultivation of medical cannabis. The provisional decision announced by BfArM is subject to a mandatory 10-day standstill period for public contracts, which permits unsuccessful bidders to challenge the decision before the final contract is signed.
On April 17, it announced the pricing of US$300 million aggregate principal amount of 5.25% convertible senior notes due 2024 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Act”), and outside the United States to non-U.S. persons in compliance with Regulation S under the Act. Aphria also granted the initial purchasers of the notes an option, exercisable within a 30-day period, to purchase up to an additional US$50 million aggregate principal amount of notes. The sale of the notes to the initial purchasers is expected to settle on April 23, 2019, subject to the satisfaction of customary closing conditions. Aphria intends to use the net proceeds from this offering to support its international expansion initiatives, for future acquisitions and for general corporate purposes, including working capital requirements, in jurisdictions where federally and nationally legal.
Aphria Inc. produces and sells medical cannabis in Canada and internationally. The company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. It serves patients and health professionals. The company also sells its products online. Aphria Inc. is headquartered in Leamington, Canada.
Aurora Cannabis Inc. (ACB) (Market Cap: $9.147B; Share Price: $9.00)confirmed that further to its press release dated April 5, 2019, the public appeal process related to the German cannabis production tender has been completed, and Aurora’s contract with the German Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte BfArM) has now been finalized.
Aurora Cannabis and Hempco Food and Fiber Inc. (“Hempco”) announced on April 16 that the companies have entered into a binding letter agreement (the “Letter Agreement”) in regard to the basic terms and conditions upon which Aurora will acquire all of the issued and outstanding common shares of Hempco (“Hempco Shares”) not already owned by Aurora. In consideration of the transaction, Aurora has agreed to pay $1.04 per Hempco Share, payable in common shares of Aurora (“Aurora Shares”), reflecting a valuation of approximately C$63.4 million on a fully diluted basis. Through its combined hemp assets, Aurora is well positioned to drive growth through the sale of hemp products to more than 100 countries around the globe.
Headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg per annum and sales and operations in 24 countries across five continents, Aurora is one of the world’s largest and leading cannabis companies. Aurora is vertically integrated and horizontally diversified across every key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis and hemp production, derivatives, high value-add product development, home cultivation, wholesale and retail distribution.