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CannaRoyalty (CNSX:OH) (OTCMKTS:ORHOF) Surging On Cresco Labs Deal and Record Revenues

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CannaRoyalty

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.

About CannaRoyalty

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.

Bottom Line

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.

We will be updating our subscribers as soon as we know more. For the latest updates on CannaRoyalty, sign up below!

Disclosure: We have no position in CannaRoyalty and have not been compensated for this article.

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Is Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) A Good Bet Right Now?

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Neptune Wellness Solutions

There is no doubt 2019 was a tough year for the hemp/cannabis businesses. However, there are a few hemp/cannabis stocks that still managed to make their investors proud. Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) is one of those stocks. Investors who put their bet on Neptune at a time like this saw their investment increase 130% by July of last year.

Neptune Wellness Solutions is already off to a strong start in 2020. The stock has gained more than 15% in the past week alone. Looking at how Neptune has positioned itself in the hemp/cannabis market, you cannot dispute 2020 is shaping up to be a great year for the stock. Then you notice that Neptune insiders are deeply invested in the stock. Insiders own more than 17% of all shares in the company. The company’s market cap of $280 million shows that insiders alone have sunk $48 million in the stock.

You are about to find out more reasons why Neptune Wellness Solutions looks to be a good pick right now. But first, here’s what you should know about the company we’re discussing.

About Neptune Wellness Solutions

Neptune Wellness Solutions has been around since 1998 and is headquartered in Laval, Canada. It is engaged in the extraction, formulation, and packaging of value-added cannabis products for both Canadian and global markets.

This is shaping up to be Neptune’s year for a number of…

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Is Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) A Smart Pick?

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Tetra Bio-Pharma

Investors will remember that 2019 wasn’t a great year for cannabis stocks, especially Canadian stocks. Issues from uncertainty over Canada’s national elections to shortage of cannabis retail stores in Ontario greatly weighed on Canadian cannabis stocks last year. These problems are largely out of the way and investors can now spot cannabis stocks with a promising outlook in 2020. Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) is one play poised for a big breakout in 2020 as its drug products go on sale.

Tetra Bio-Pharma is one of the most promising cannabis stocks in 2020 and investors have really warmed up to the stock. At $0.50, Tetra stock has already gained more than 60% year-to-date. But that is just the beginning and we feel there is a great story to tell here. First, however, it is important for investors to understand the company we’re discussing.

About Tetra Bio-Pharma

For investors who may have just come across Tetra Bio-Pharma for the very first time, this is a Canadian cannabis company. It is focused on developing cannabis-based drugs for a variety of conditions, including cancer.

Tetra Bio-Pharma about to begin commercializing its drug products

As a drug company, Tetra Bio-Pharma is insulated from many challenges that face conventional cannabis companies. For example, companies that make adult-use cannabis products must cope with cutthroat competition in the market. Moreover, Canadian cannabis companies have Continue Reading

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Why Investors Are Warming Up To Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF)

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Fire & Flower Holdings

The disastrous 2019 taught investors the importance of carefully screening cannabis stocks for great picks that can withstand industrywide shocks. That explains why investors are warming up to Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF) in 2020.

Fire & Flower Holdings has positioned itself to take full advantage of the recently expanded cannabis market under Cannabis 2.0. Investors are realizing that FFLWF is one pick that can make a huge difference in their cannabis portfolio. Fire & Flower Holdings has already gained more than 25% year-to-date, a testament to the strong investor interest in the stock in 2020.

About Fire & Flower Holdings

Fire & Flower Holdings is a Canadian cannabis company. It operates as a cannabis product retail chain. It operates a network of dozens of cannabis retail outlets in Canada. FFLWF currently has licenses to operate cannabis retail stores in Alberta and Saskatchewan provinces. In addition, it runs a cannabis distributor business in Saskatchewan.

Investors will no doubt remember that 2019 was a tough year for the cannabis sector, with a widespread collapse of many cannabis stocks big and small. That shows why in 2020 investors are looking for cannabis stocks that can deliver excellent returns and make them forget the pain of the past year. FFLWF has emerged as one of the favorite cannabis stock picks for investors early on in 2020. There are several reasons behind that and here are…

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