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Sunniva Stock (CNSX:SNN) (OTCMKTS:SNNVF) Poised To Ride The California Cannabis Market

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Sunniva stock

The year just ended was challenging for the broader cannabis industry. As of Q2 2019, state authorities revealed that the amount earned from the excise tax on cannabis was $74.2 million. Although this was a gain from the previous quarter, the figures were way below estimates. Cannabis stocks, on the other hand, lost significant value during the year. In the last six months of 2019 alone, Sunniva Stock (CNSX:SNN) (OTCMKTS:SNNVF) lost 92.9% of its stock value. However, optimism levels in the growth of the industry are in a positive trajectory, which bodes well for Sunniva stock and others.

Sunniva stock analysis

In the first three days of 2020, Sunniva stock has jumped over 15% to $0.22. This is the strongest indication so far that the New Year is different from 2019. Besides Sunniva’s commitment to restructuring and to re-strategize for growth’s sake, sentiments in the broader cannabis markets are positive.

This year is particularly defining for the cannabis industry because many more US states could lift the ban on the recreational use of marijuana. In addition, Illinois threw open the recreational marijuana market with legalization late last year. This year, six states among them Arizona and the Dakotas will ask its citizens to decide on the question of legalization of recreational marijuana during the 2020 State and Federal elections.

About Sunniva stock

Sunniva is a cannabis company with a commitment toward vertical integration. To that end, the company controls several wholly-owned subsidiaries, each with unique operations. CP Logistics, for instance, is a limited liability company licensed to extract various products from hemp and other cannabis plants. On the other hand, LTYR Logistics, LLC runs the distribution segment of Sunniva. The subsidiary’s operations are confined to California and it distributes products with Sunniva labels exclusively. Other subsidiaries under Sunniva’s ambit include Full-Scale Distributors, LLC and Sunniva medical Inc. (which could be sold to CannaPharmaRx if the two agree).

Improved market opportunity in 2020

Some of the challenges that Sunniva stock faced last year had a lot to do with shrinking market opportunity. Particularly, the shrinkage of the opportunities came from a huge tax burden that was, sometimes, asynchronous among county governments and local city councils. For example, the retail sales tax falls between 9% and 11% but lack of a synchronized approach meant that some local authorities’ retail sales tax goes beyond this range.

In this New Year, state authorities in California are working on a set of laws that will change the taxation landscape as far as the cannabis industry is concerned. Particularly, Assembly Bill 37 (AB 37) wants to include commercial cannabis businesses in the category of businesses allowed to claim tax credits and deductions. AB 37 already went through Governor Newsom’s office and received his assent.  

A further reason for the improved market opportunity in 2020 is the SAFE Banking Act. First brought to the Congress in mid-2017, the act protects cannabis businesses against unfair treatment by financial institutions. This includes denial of services such as share insurance and deposit of finances. Already, the act passed the House test and is awaiting to jump the Senate hurdle and the President’s assent.

Recent developments for Sunniva

Interestingly, the last few months have not been all bleak for Sunniva stock. There are several developments that could provide much-needed impetus for the growth of the company’s stock. Some of the developments are discussed here.

Disposing off Canadian assets

Sunniva is undergoing fundamental restructuring to adopt lean operations. Notably, the California cannabis market has great potential for the company to grow its bottom line but that depends on its operational efficiency. To that end, the company has divested and it is in the process of divesting some wholly-owned subsidiaries. On December 19, 2019, Sunniva revealed the closing of the commitment to divest Natural Health Services Ltd. to Cura-Can Health Corp. Notably, the transaction was worth $9 million CAD in cash and stock.

Sunniva is in the process of disposing of Sunniva Medical Inc., another Canada-based asset. In a December 23, 2019, press release, the company detailed that the SMI transaction between Sunniva and CannaPharmaRx was nearing completion. According to the Chairman and CEO of Sunniva, Dr. Antony Holler, the disposing off of the company’s Canadian assets to focus on the California market.

Scaling down California operations

In the last three months, Sunniva has faced several legal disputes concerning the Finder’s Fee Agreement and the Build to Suit Lease dispute. However, the company assured investors in an update that the issues were under control. Specifically, the company committed to scaling down operations in California to preserve funds to settle the disputes. The move is critical towards swinging market sentiment in the company’s favor.

Bottom line

Although 2019 was tough, Sunniva stock managed to drag it out without significant casualties. The company faces a New Year with promises of greater growth and wider expansion of its activities in California. Particularly, the divestment of Canadian assets gives the company more operational space and more funds to pursue growth opportunities in the world’s largest cannabis market. With Sunniva stock already up 15% since the start of 2020, there is the confidence that the market is yet to see the best of Sunniva stock.

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Disclosure: We have no position in Sunniva stock 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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