Origin House (CNSX:OH) (OTCMKTS:ORHOF) formerly CannaRoyalty has recovered from a harrowing plunge that saw the stock shed more than 50% in market value in the second half of the year. The stock has since bounced back from all-time lows as investors continue to react to another quarter of record revenues.
CannaRoyalty Price Analysis
The bounce-back has also coincided with reports that Cresco Labs is closing on a deal that will see it acquire Origin House in an all-stock deal. Revenue growth at the back of the takeover news has continued to bolster CannaRoyalty sentiments, in the market depicted by strong price action activity.
Likewise, the stock has bottomed out from the $2.80 level in what appears to be a materialization of a bull trend. After the recent bounce back, the stock faces immediate resistance at the $4 level. A rally followed by a close above the critical resistance level should reaffirm the emerging uptrend setting the stage for the stock to continue powering high.
Failure to take out the $4 a share level could leave Origin House susceptible to further drops in continuation of the long-term downtrend.
Origin House formerly CannaRoyalty casts its self as a cannabis brand and distribution company. The company is engaged in the cultivation processing and distribution of cannabis in the U.S and Canada. The company currently operates six licensed facilities in California in addition to providing distribution manufacturing and marketing services to brand partners.
Cresco Labs Merger
CannaRoyalty market sentiments have inched higher in recent weeks, having emerged it is an acquisition target for Chicago based marijuana operator Cresco Labs. The merger is close to completion as part of a deal valued close to $823 million.
Cresco Labs is acquiring Origin House as part of an effort to strengthen its footprint in California, a major market for cannabis. Origin House has already established a robust footprint in the state with more than 50 brands and 500 plus dispensaries that allow it to be a key player on medicinal cannabis
A merger of the two companies will result in a combined company with licenses for up to 51 retail locations. The combined company will also boast of 1.5 million square feet of cultivation across 11 states in the U.S.
Amidst the acquisition drive, Origin House has continued to fire on all angles as it continues to work on its core business. A 244% increase in revenues in the third quarter that came in at $22.8 million underscores a company in a phase of robust growth.
Revenue Growth & Margin Expansion
During the quarter, CannaRoyalty also continued to register continued gross margin expansion thanks to the optimized brand portfolio at the back of triple capacity increase. Origin House also continued to streamline its brand portfolio with a view of focusing on category winners including onboarding of Cresco products
In a bid to accelerate sales growth, Origin House has redesigned its sales and operations process in California. The restructuring seeks to align the company’s sales operations to take advantage of strong cannabis demand as the market continues to mature.
Even as CannaRoyalty continues to explore ways of accelerating sales growth, it also continues to restructure its operating costs in a bid to shore the bottom line. The company has already reduced its operating costs by $1.2 million ahead of the integration with Cresco labs.
Cost cuts have also coincided with the raising of additional capital through a secondary listing. In November, the company closed a $30 million non-brokered financing. The balance sheet also received a boost on the company receiving an additional $15 million debt financing from Opaskwayak Creek Nation poised to fund the construction and expansion of a key cannabis production facility in Sonoma County.
“We have substantial room to continue expanding revenue and margins over time, driven by a threefold increase in ultra-premium flower capacity at our FloraCal and Cub City facilities, the streamlining of vendor relationships to focus on category winners, and a steady increase in capacity utilization at our facilities in California,” said Chairman Marc Lustig.
The formation of a medium-term ascending trend line could signal bears are increasingly exiting their positions after running the stock lower since May. Improving fundamentals depicted by revenue growth ahead of the Cresco Labs merger are some of the developments that continue to support a break out from current lows.
CannaRoyalty looks set to continue powering higher as it appears to be trading at a discount relative to its long-term prospects, especially on merging with Cresco Labs.
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Disclosure: We have no position in CannaRoyalty and have not been compensated for this article.
Forget APHA and ACB, Buy GTBIF and TCNNF
There are a lot of misconceptions going on when it comes to US legalization. Many investors are buying Aphria (APHA) and Aurora Cannabis (ACB) hoping to bank on what’s happening in the US. However, they are Canadian Licensed Producers and have no business in the US. Investors are buying them because they trade on the major exchanges, but that is the wrong move. The correct move is to buy the US multi-state operators like Green Thumb Industries (GTBIF) and Trulieve Cannabis (TCNNF).
On Election Day voters in New Jersey, Arizona, Montana and South Dakota voted to legalize recreational marijuana. South Dakota and Mississippi voters also approved measures to legalize medical marijuana.
There’s also the prospect of a more pot-friendly White House with President-elect Joe Biden. Vice Presidential Candidate Kamala Harris said at the debate a Biden administration would decriminalize marijuana at a federal level and expunge criminal records of people with marijuana-related offenses.
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves.
Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection.
The company also owns and operates rapidly growing national retail cannabis stores called Rise™ and Essence. Headquartered in Chicago, Illinois, Green Thumb has 13 manufacturing facilities, licenses for 96…
What Do Investors See In Medical Marijuana Stock (OTCMKTS:MJNA)?
Medical Marijuana Stock (OTCMKTS:MJNA) has emerged as one of many investor’s favorite pot stocks in the legal cannabis universe in 2020. The stock is already up about 10% in 2020, demonstrating how investors have warmed up to the stock early on in the New Year.
Following a disastrous 2019, cannabis investors lost money but have also learned that their best bets are stocks with strong fundamentals. They are looking for companies that have positioned themselves well in the cannabis industry and have what it takes to go for the opportunities. That is why MJNA stock is catching a lot of investor attention in 2020 because of how it has positioned itself in the cannabis market.
Robust revenue growth and strong financial position have also helped put MJNA on the radar of investors hunting for quality cannabis stocks. Revenue at MJNA more than doubled from $26.5 million in 2017 to $60 million in 2018. MJNA is also not in financial distress as may be the case with other cannabis companies out there. The company finished the third quarter, the most recent reported period, with $5.5 million in cash reserves.
Moreover, MJNA has recently taken steps to expand into new international markets and invest in companies that are leaders in their segments. These prudent actions are helping lift Medical Marijuana stock as more investors learn about them.
About Medical Marijuana stock
Is Tilray Inc (NASDAQ:TLRY) A Buy Or Sell?
For Tilray Inc (NASDAQ:TLRY) and the rest of cannabis stocks, 2019 was no doubt a bad year. But 2020 is shaping up to be a promising year for the stock. To start with, Tilray stock has already gained 8.35% year-to-date. If that says anything, it shows following the broad selloff in Tilray stock last year, we’ve got to a point where sellers are giving way to buyers in the stock.
There are several catalysts that should continue driving NASDAQ:TLRY as you’re about to see. First, below is a brief profile of the company we’re discussing.
Tilray is a Canada-headquartered global cannabis company. It is engaged in activities of cannabis cultivation and processing as well as marketing and distribution of cannabis products. Tilray already has several cannabis products brands to its portfolio. It operates across five continents through subsidiaries in Canada, Australia, Germany, and Portugal.
Following the broad collapse of cannabis stocks in 2019, investors are looking for cannabis stocks that can make a positive impact on their portfolios in 2020. Tilray stands out as an attractive cannabis stock pick in 2020. Here are some of the exciting things about the company.
Tilray CEO sees a bright future for the cannabis industry
On January 25, Tilray CEO Brendan Kennedy spoke on Bloomberg. In that interview, Kennedy framed a rosy outlook for the…