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.
For the latest updates on HITIF and today’s hottest MJ stocks, sign up below!
Disclosure: We have no position in HITIF and have not been compensated for this article.
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…
Is Cronos Stock (TSE:CRON)(NASDAQ:CRON) A Buy?
Cronos Stock (TSE:CRON)(NASDAQ:CRON) stock fell 9.22% on January 24, marking its steepest decline so far in 2020. The stock plunge followed an important disclosure that you would only expect from a company that is trying to be straight and transparent with investors. Here’s what happened.
On January 22, after market close, Cronos made a regulatory filing detailing changes in its executive team. In that SEC filing, Cronos revealed that David Hsu and William Hilson have stepped down as its chief operating officer and chief commercial officer, respectively. Unfortunately, some investors read bad news in the executive exits and sold their shares in Cronos.
But a careful reading of the filing doesn’t seem to raise any red flags. Therefore, the big stock plunged points to investors panicking to the degree of responding to a mosquito bite with a missile.
There is no doubt that 2019 was a difficult year for cannabis stocks and Cronos Stock is no exception. But before the uncalled for reaction to Cronos’s regulatory filing, we had been at a point where sellers were starting to give way to buyers in Cronos stock. The stock has gained about 8.0% in the past one month. It had gained more than 13% year-to-date before the January 24 big selloff.
About Cronos Stock
Cronos Stock is a Canada-based global cannabis company. Cronos operates through subsidiaries and…