Why Flowr Stock (CVE:FLWR)(OTCMKTS:FLWPF) Will See A Better 2020

Flowr Corp (CVE:FLWR)(OTCMKTS:FLWPF) had an excellent start to 2019 rallying by more than 40% to one year high before coming under immense bearish pressure in the second half of the year. After experiencing a deep pullback, Flowr stock is once again trying to make a comeback.

Flowr Stock Catalysts and Price Analysis

A confirmation that the company is on its way to cash flow break-even in the second half of the year is one of the catalysts that continues to strengthen the stock’s market sentiments. With insider ownership standing at more than 50%, the board’s interest remains aligned with that of current and future investors.

While the company’s third-quarter revenues did fall short of expectations, the ramping up of production activities as well as sales and marketing activities continue to affirm the company’s long-term prospects.  The focus in 2020 is on scaling up the business as Flowr Corporation seeks to reinvigorate its growth prospects and pursue opportunities for growth globally.

That said, it does not come as a surprise that the stock has started experiencing positive price gains as well as an increase in trading volumes in the market. After consolidating near all-time lows for months, Flowr stock has once again started bouncing back in what appears to be the materialization of a positive uptrend.

The $2 zone is the immediate resistance level standing in the way of Flowr breaking out from one-year lows. A rally followed by a close above the $2 mark should pave the way for bulls to push the stock to the $3 zone.

Conversely, failure to take out the $2 resistance level would leave the stock susceptible to further drops in continuation of the long-term downtrend.

About Flowr stock

Headquartered in Toronto, Canada, Flowr Corporation is a cannabis-focused company with operations in Canada, Europe, and Australia. The company boasts of a purpose-built GMP designed indoor cultivation facility in Kelowna BC. From the facility, the company produces and distributes recreational and medicinal products for domestic use and exploration.

Recent developments

The cannabis industry has come under immense pressure in recent months, with a majority shedding a substantial amount of market value. Pricing pressure and growing investors’ concerns about companies’ ability to generate profits are some of the tailwinds that have seen a number of investors shun the sector.

While Flowr Corporation is one of the stocks that has underperformed in the industry, the tide is slowly changing. The Chief Executive Officer, Vinay Tolia, has already confirmed they remain open to raising additional capital. Additional capital should help the company pursue opportunities for growth as well as execute on global growth strategies.

“Despite the recent market volatility, we continue to be bullish on the growth opportunities in our businesses globally in 2020 and beyond. As we stated in our Q3 update, we believe we’ll be cash flow break-even in the second half of 2020 with the capital available to us today,” said Mr. Tolia

Europe Australia Expansion

The sentiments came hot on the heels on the company completing the acquisition of an 80.2% interest in Holigen Holdings Limited in the Third quarter. The acquisition paves the way for the creation of a cannabis company with access to over 7 million square feet in EU-GMP compliant outdoor-grown cannabis. Likewise, the acquisition should allow Flowr Corporation to expand and strengthen its prospects in the European and Australia medicinal markets.

Likewise, Flowr Corporation has strengthened its financial position with the closing of a $43.5 million equity financing and a $25 million credit facility. A solid financial position should allow the company to ramp up cannabis cultivation and processing activities to address the growing demand for medical and recreational cannabis.

Bottom Line

Flowr stock has ramped up sales and marketing operations as it looks to accelerate revenue growth after falling short of expectations in the third quarter. Likewise, the company has ramped up the construction of production facilities, as it looks to ramp up its production capacity.

The ramping up of cannabis production should allow the company to expand its operations in Europe. Likewise, a solid financial position should help support strategic initiatives crucial to the generation of long-term value.

That said, Flowr stock looks set to continue bottoming out as it is currently trading at a discount relative to the company’s tremendous potential and improving fundamentals.

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