This little-known marijuana company is the only real entry point into the multi-billion-dollar Canadian pot market, and it’s also the first marijuana company to pay a dividend to its shareholders.
Pot stocks were already skyrocketing—in some cases beyond 1700%--in anticipation that the Canadian government would put legislation on the table to legalize marijuana for recreational use in April.
That’s already happened, and now stocks are going wild because it should all be legal by July 1st, 2018. This is the making of a multi-billion-dollar market overnight.
And this company could be the way in ...
Meet Invictus MD (TSX:IMH.V; OTC:IVITF)—a small-cap that has redefined savvy in this sector and will be walking with the jolly green giants by this time next year—when high valuations will slam doors shut and only billionaires will emerge.
The Fast-Track to Profits—The Lucrative Pot Pre-Approval
In what will prove to be the biggest multi-decade opportunity for investors, Invictus has already won pre-approval by the Canadian health authority to produce 15 strains of marijuana.
And this is only one of many firsts for this small-cap.
Right out of the gate, Invictus MD, owner of two of only 50 licenses, has demonstrated that it will lead the way. And it’s cashed up and already generating dividends—a feat unheard of in the pot industry.
That’s why it’s called ‘Canada’s Cannabis Company’—it’s already cemented market share for medical marijuana use, and now it’s one of the first in and ready to fill the supply gap for a massive recreational push.
It’s also the first licensed medical marijuana company to pay a dividend to shareholders, and with its strains reaching into everything from pain management, cancer, epilepsy, anxiety and – most lucratively of all—recreation, the sky is the limit here.
Supply Deficit Looming—This is Bigger Than Beer
We’re now just shy of a year away from the start date of legal recreational use, and there are already predictions of a looming supply shortage.
The industry is scrambling to add greater capacity once these legal barriers are tossed aside.
Deloitte estimates this industry could be worth a whopping $22.6 billion annually. That’s more than the combined sales of beer, wine and spirits.
We’re going to be playing some serious catch-up, which is a producer’s dream.
• Legalizing recreational marijuana could result in demand of about 400,000 kilograms of cannabis in its first full year in Canada, according to Canaccord Genuity analysts. (And that’s just for recreational use.)
• Demand for medical cannabis is also growing at a significant pace, and the total combined demand for the first year could be 575,000 kilograms.
• Arcview Market Research of San-Francisco predicts that legal marijuana sales will reach close to $22 billion by 2021—up from nearly $7 billion last year. That’s an annual growth rate of 26 percent, and it’s in line with Deloitte’s own estimations.
• In Canada alone, Canaccord Genuity predicts that the recreational marijuana industry could reach $6 billion in sales by 2021.
That’s what happens when you end ‘prohibition’ for a market that is already huge—it’s just hiding under the table. But this will blow away the billion-dollar industry that was reborn the moment alcohol prohibition ended on December 5, 1933.
Investors get it. That’s why shares of medical marijuana producers more than tripled last year—just at the anticipation, and now that it is set to become legal, there is no telling what could happen.
• AXIM Biotechnologies (NASDAQOTH:AXIM): exploded 1,720 percent
• Corbus Pharmaceuticals (NASDAQ:CRBP) was up 431 percent
• Aphria (NASDAQOTH:APHQF) grew 381 percent
• Aurora Cannabis (NASDAQOTH:ACBFF) was up 299 percent
• Canopy Growth Corp. (NASDAQOTH:TWMJF) up 259 percent
• Medical Marijuana (NASDAQOTH:MJNA) up 254 percent
• GW Pharmaceuticals (NASDAQ:GWPH) was up 64 percent
In early April, Canada launched its first marijuana exchange-traded fund (ETF), giving investors diverse exposure to this tantalizing sector. The Horizons Medical Marijuana Life Sciences ETF (TSX:HMMJ) launched on the 4th of April on the Toronto Stock Exchange with 11 Canadian-listed stocks and four U.S.-listed stocks.
On 23 June, Invictus was included in the ETF.
Way Ahead of the Game, with a Massive Pot Pipeline
Invictus MD (TSX:IMH.V; OTC:IVITF) has multiple projects in its Canadian investment pipeline—all of them bolstered by some extremely savvy acquisitions. And they’re not afraid of picks and shovels; they’re all about hard work, if it’s smart.
Prior to October, when it entered the license producer market, Invictus MD was busy acquiring all the ‘picks and shovels’ of the cannabis space. Invictus MD has made one smart move after another, and it’s always the ‘pick and shovel’ guys who have real longevity. First, they acquired a fertilizer company that was cash-flow positive, and then they sold one of its lighting divisions for $5 million, having paid only $900,000 for it less than a year before. That’s how they managed their first shareholder dividend.
They’ve been targeting small- and mid-size companies with significant growth potential and direct their strategies towards profitability. And this business savvy gives them everything they need to produce cheaply and to corner this market—but still maintain a valuation far below their peers. That why this is a very real entry point into this market for potential outsized gains.
The pipeline is impressive:
• 33% ownership in AB Laboratories Inc., which received its cultivation license in the third quarter of last year. A sales license is expected any day.
• The AB facility has a capacity for 1,000 kilograms, with active expansion plans underway.
• Invictus just closed its acquisition of 100 acres with AB Ventures Inc., and is targeting production here of 25,000 kilograms by 2020.
• In Alberta, Invictus owns 100% of Acreage Pharms, which has a license to cultivate under ACMPR and has a purpose built 7,000 square foot facility and a 30,000-square-foot phase 2 expansion plan with capital to expand an additional 75,000 square feet..
So, what we’re looking at here is a wildly undervalued company that has an amazing set of assets and a pipeline to produce which is poised to explode onto a recreational market that is already bursting at the seams.
They Actually Pay Dividends. Need We Say More?
No one expects pot producers to pay dividends—yet. It’s still early days, even with medical marijuana. Even so, Invictus has already rewarded its shareholders, to everyone’s surprise. It was a Christmas bonus no one expected, and its speaks volumes about this company and its management.
In the words of Invictus Chairman and CEO, Dan Kriznic, “It made sense to give back to those who supported us.”
Kriznic has been rated one of Business in Vancouver’s ‘Top 40 under 40’, and he’s put Invictus on the fast track to the market.
This CEO has turned $10-million companies into $150-million annual revenue generators. They’ve got a license to grow in more ways than one, and while they might not be a ‘green giant’ just yet, their undervaluation suggests they could be.
This company’s not only rewarding shareholders early, but it’s not afraid of hard work, and it has prime real estate for a cash crop that’s going to keep growing.
• The company has a funded production capacity of about 18,000 kilograms. Compared to its peers, this suggests significant undervaluation.
• And not only are its strains pre-approved by the health authorities, but they will reach into every corner of the market. It’s a marijuana octopus that has left no stone unturned.
• Invictus MD’s market cap to funded capacity is about 5 times the industry standard.
This is the only door to walk through to the land of marijuana profits, but it won’t be open much longer.
Other companies worth watching:
Constellation Brands, Inc. (NYSE: STZ) is another solid pick in the realm of “sin stocks.” The company represents some of the most identifiable beers on the planet. Constellation Brands, Inc. operates in 5 countries and its products are sold in countless others. Established in 1945, this Fortune 500 company with a market cap of over $37B is a more than a safe bet.
Ball Corporation (NYSE:BLL) is another company that really knows how to take advantage of a booming industry. As a producer of metal packaging for food, personal care, and most notably, beverage industries, Ball Corporation is taking advantage of the craft beer boom in a way others may have neglected. Perhaps even more interesting; Ball Corporation is also involved in a number of other industries, including data exploitation solutions, cyber security, and spacecraft instruments. An ambitious stock to follow, that is for sure.
Ag Growth International Inc (TSE:AFN): The agricultural industry is sure to take advantage of the legal cannabis boom in Canada, and AG Growth International is as good a place as any to find value. With a nice dividend and a strong first half of 2017.
CanniMed Therapeutics Inc (TSE:CMED): This Canada-based plant biopharmaceutical company was the first licensed marijuana producer to sign a deal with a national pharmacy chain. With its stock trading at nearly a 52-week low, there is certainly value to be found in this company when the new Marijuana legislation kicks in.
Theratechnologies Inc (TSE:TH): Possibly the best performing pharmaceutical stock of 2017, Theratechnologies has seen its stock soar nearly 300 percent since January 1st. It will remain a stock to watch in drug markets, and if its current growth trend continues investors will be seeing some incredible returns.
By Charles Kennedy
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