The last time we focused on High Tide Inc (OTCMKTS: HITIF), the company was trading at key support. In particular, our analysis was that the stock was due for a correction upwards after having flirted with the $0.33 level. The basis for the analysis was that the company was making the right calls in terms of expansion and juicing up of the business model.
How is the stock performing?
However, the analysis fell short of anticipating a massive plunge which saw the stock bottom out at $0.25 on Thursday May 9, 2019. In the initial analysis, the consensus was that the price action which saw the share price decline to $0.33 did not reflect the long-term prospects of the company. Further, the market sentiment for the stock was firming. Also, the company was reporting higher sales growth and a strengthened balance sheet from the closing of a convertible debenture offering which was worth $8.4 million.
Notably, the company reported systemwide gross revenues in the region of $441,000 within the three days from April 19th to April 21st, 2019. In the same three day period in 2018, the company reported close to $132,000. As such, there is a 234% change and this should have jolted the market into giving the stock a better look. However, the share price stalled at $0.33 until later dropping to $0.25.
Signs of life in the stock
Nonetheless, the market sentiment is on the turnaround. Between May 9 and the last trading session, the stock clawed up some value where it traded at $0.25. Further signs of life in the stock are apparent in the behavior of the 50-day moving average.
In the last week of April, the MA (50) established a resistance point at $0.3693 but later dropped substantially to $0.3395 in mid-May. However, the MA (50) dropped just marginally from mid-May to the current value of $0.3281. As such, there is a possibility that the stock will breach the resistance sooner rather than later if the current trajectory is sustained.
What does High Tide Inc do?
High Tide manufactures and retails accessory for the cannabis industry. According to the company management, three quarters of the cannabis accessories which the company retails is produced in-house. So far, the company has curved its place as the premier accessory provider with proprietary products under the Trailer Park Boys and Snopp Dogg brand names and are available in over 3,000 stores globally.
The company describes itself as vertically-integrated and has subsidiaries with interests in the cannabis industry. One of the subsidiaries, Canna Cabana Inc., runs one-stop shopping retail outlets which sell merchandise, accessories and, within Alberta, cannabis.
Expansion of retail stores
In our last coverage of High Tide, we noted that the company was actively involved in expansion of its footprint. In particular, the company was in the process of constructing Kushbar, Smoker’s Corners and Canna Cabana stores. Also, the company was in advanced stages in the plan to open a retail store in Toronto which would be the third.
In light of the plans, the company revealed that it received official nod from Alcohol and Gaming Commission of Ontario (AGCO) to operate another store in Toronto. Notably, Dana Michele Kendal, a High Tide counterparty, won the Retail Operator Licence which will allow a new Canna Cabana Toronto store to open around June 1, 2019.
Additionally, the company recently acquired Dreamweavers Cannabis Products Inc. which adds to its retail prowess. As an advantage, Dreamweavers also operates an appropriately licensed e-commerce business which operates in Saskatchewan. The management of High Tide believe this new acquisition will beat a path for entry into Saskatchewan.
Commenting on the development, Raj Grover, President and CEO of High Tide said, “Our purchase of Dreamweavers is a significant milestone for High Tide as it marks our entry into Saskatchewan, instantly establishes Canna Cabana as an online retailer of cannabis for the first time and adds a fantastic location as our 16th Canna Cabana-branded store to our growing network across Canada.”
Issuance of common shares and stock options
As part of the growth strategy, High Tide decided to offer stock options to stakeholders. In particular, the company granted over 2.6 million shares in stock options to employees, management, and consultants. Another amount totaling close to 2.5 million shares which remained from payment to holders of unsecured convertible debentures was granted to a number of vendors and consultants.
What next for HITIF?
The cannabis industry is still inchoate and there is room for expansion. However, only those companies which are ready to leverage the growth can enjoy the opportunity. Luckily, all the latest strategy moves by HITIF are indicative of a company which desires to give the best return on the investment committed by investors.
We still believe that the 234% growth in retail sales for the company will drive more growth in revenue. In addition, the expansion strategy effected by management will certainly sway the stock sentiment in the positive direction.
In a word, our resolve remains that High Tide is a potential bounce-back play.
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Disclosure: We have no position in HITIF and have not been compensated for this article.
Terra Tech Corp (OTCMKTS: TRTC) A Bounce Back Play As Net Loss Narrows And Gross Margins Expand
Terra Tech Corp (OTCMKTS: TRTC) has retraced lower ever since it clocked 2019 highs at the end of the first quarter. The stock has crumbled under soaring bearish pressure. Amidst the steep pullback, the stock is a potential bounce-back play as it is currently trading at the lower end of a tight trading range.
Terra Tech Price Analysis
A plunge to the lower end of the $0.63 to $1 trading range leaves the stock in a precarious position. A plunge lower could elicit further selling pressure while a bounce back could result in the stock making run for this year highs.
In our view, the stock could bounce back on investors reacting to a string of positive developments that affirm the Company’s prospects. For starters, Terra Tech is fresh from launching a legal cannabis delivery services as it continues to pursue growth opportunities in California.
The Company is also fresh from delivering impressive financial results that indicate gross margin expansion as net loss from operations continues to narrow. The sale of Blum Desert is another development poised to strengthen the company’s financial position.
Terra Tech commencing cannabis sales to the adult use market should continue to excite investor’s, ideal for fuelling an upswing in the stock’s price action activity. With the stock appearing to have hit the floor after the recent pullback, a correction higher could be in the offing at the lower end of the trading range.
Namaste Technologies Inc (OTCMKTS: NXTTF) A Bounce Back Play On Robust Revenue
Namaste Technologies Inc (OTCMKTS: NXTTF) has had to contend with wild price swings, as investors reacted to delays in the filling of audited financial results and ousting of Sean Dollinger as the CEO. That could soon change, as the Company has come through and filled results that affirm robust revenue growth.
Namaste Technologies Price Analysis
However, concerns over widening net loss could hurt the stock’s sentiments in the market, at a time when it is in dire need of, groundbreaking catalysts to avert further slides. While the stock has bottomed out, it remains engulfed in a long-term bear trend.
The descending trend line could attract short selling pressure on the filling of negative news that arouse concerns about the Company’s long-term prospects. A spike to the $0.65 level essentially means the stock is at a critical resistance level.
Failure to rally and find support above the resistance level could elicit some form of selling that could see the stock trading sideways. Immediate support on any pullbacks from current highs is seen at the $0.40 mark.
A sell-off followed by a close below the $0.40 mark could result in Namaste Technologies resuming its downtrend, as has been the case for the better part of the past year. Conversely, a rally followed by a close above the $0.66 mark should pave the way for the stock to make a run for the $1.20 mark, seen as the next…
Cannex Capital Holdings Inc. (OTCMKTS: CNXXF) A Long-Term Play Despite Price Slump
A strategic merger with 4Front coming on the heels of Pure Ratios holding acquisition affirms why Cannex Capital Holdings Inc (OTCMKTS: CNXXF) prospects can only get better despite the recent price slump. The transformational events expand the Company’s operations into six U.S states signaling push for market value in the burgeoning cannabis sector.
Cannex Price Analysis
While Cannex has taken a significant hit in the market, it is still up for the year after an excellent start that saw it rally by more than 200%. The stock has since pulled lower in what appears to be a correction phase.
The ongoing pullback has since exposed the stock to a crucial support at the $1 a share level. A breach of the support level would leave the stock susceptible to further drops probably back to the $0.80 mark, a critical technical level.
For the stock to resume its uptrend, it first needs to rise and stabilize above the $1.20 mark, the immediate resistance level. The stock rallying and finding support above the $1.2 mark would open the door for bulls to fuel a rally back to 52-week highs.
Cannex is a diversified company that leases real estate properties and sells supplies to cannabis cultivators. The Company also offers financial services as well as branding and IP services to licensed cannabis operators. It is also focused on premium indoor cultivation extraction and branding of edible…