Record revenues representing a 168% year-over-year increase explain why Medicine Man Technologies Inc. (OTCMKTS:MDCL) shares are flying high. The confirmation that the acquisition of MedPharm Holdings and Medicine Man Denver will take the company’s annual run rate to over $40 million is another development that continues to ramp up the stock’s market sentiments.
Medicine Man Technologies Price Analysis
Just as was the case in the first quarter, Medicine Man Technologies has continued to edge higher as investors sentiments continue to inch higher. The stock is already up by more than 150% for the year after succumbing to bearish pressure in 2018.
A spike to two-year highs has reaffirmed the stock’s breakout credentials as it continues to outperform the overall cannabis market. A minor correction from the $4 a share handle to the $3 a share level appears to have paved the way for the stock to edge higher as a pullback play.
Standing in the way of the stock registering a new higher high is the $4 a share resistance level. Failure to breach the resistance level could see the stock resorting to trading sideways in a $3 to $4 trading range.
Conversely, a sell-off followed by a close below the $3 a share mark could result in the acceleration of the sell-off back to the $2.30 support level.
What Does Medicine Man Technologies Do?
Medicine Man Technologies casts itself as an integrated operator in the cannabis sector. The company offers consulting cultivation supplies and equipment to licensed cannabis producers, processors, and retailers.
Why is Medicine Man Technologies Surging?
Medicine Man Technologies is flying high after delivering an impressive financial export for FY2018. Revenues for the 12-month ended December 31, 2018, increased 168% to $3.5 million. The company attributes the increase to an increase in new clients as well as expansion into new states that adopted cannabis legalization initiatives.
Gross profit for the year increased 208% to $6.9 million from $2.2 million reported a year earlier. Net income, on the other hand, skyrocketed to $2.2 million compared to a net loss of $5.2 million reported in 2017.
According to Chief Executive Officer, Andy Williams, 2019 is a pivotal year as they work on the next phase of growth.
“Our focus now is to leverage the entire management and leadership experience as we continue to further develop our growth strategies with the two pending acquisitions of Medicine Man Denver and MedPharm Holdings, LLC, expected to close in late 2019 or Q1 2020, in which post-acquisition is expected to generate a minimum of a $40+ million-a-year run rate,” explained Mr. Williams.
MedPharm and Medicine Man Denver Acquisition
The MedPharm acquisition is a big achievement as the company comes with a cannabis research license that will allow Medicine Man Technologies to come up with pharmaceutical grade products. In addition, the company’s two licensees MX LLC and MedPharm Iowa should help strengthen Medicine Man Technologies’ brand.
With the acquisition of Medicine Man Denver, Medicine Man Technologies will gain access to 4 Colorado retail locations as well as a 40,000 sq. ft. cultivation operation. The acquisition is poised to add $25 million of annual revenue.
Medicine Man Denver acquisition would expose the parent company to industry-best harvesting operation and expertise that currently stands at 650 grams per square foot.
“These acquisitions will greatly benefit from our existing relationships in 18 states and seven countries. They will also position us to drive revenue through traditional partnerships only reserved for pharmaceutical companies as the only cannabis company with a federal research license,” explained Mr. Williams.
Separately Medicine Man Technologies has confirmed that one of its investors, Tigran Muradyan has joined the management team as a director of products. Under the role, the new director will work with the executive management team on the development and execution of an array of products and services in the effort of furthering the company’s revenue growth.
Muradyan has since invested $1 million into the company, on the purchase of 600,000 shares previously owned by Joshua Haupt.
What Next For Medicine Man Technologies
Medicine Man Technologies remains well positioned to continue edging higher as investors react to a string of positive developments that underscore underlying growth. After a minor correction, the stock is likely to power through the immediate resistance level, on its way to registering higher highs.
For early movers, the stock should be an exciting pull back play once it powers through the $4 resistance level.
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Disclosure: We have no position in MDCL 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…