The company’s investment strategy is focused on companies producing higher quality/higher margin flower and extracts combined with strong branding strategies.
() () share price rose by 14% from 10.5 cents to 12.5 cents over the course of November and the stock is up a further 36% to date in December, last closing at 17 cents.
As cannabis becomes more mainstream, consumer market data that is emerging from several US states appears to show an increasing demand for higher-priced products which indicates increasing brand loyalty and consumers becoming more discriminating in terms of quality.
This is a trend seen in the alcohol and beverage sector in the past as consumer palates become more sophisticated.
MMJ is witnessing similar trends within the Canadian space as well which bodes well for its investment strategy of focusing on companies producing higher quality/higher margin flower and extracts combined with strong branding strategies.
Updates from MMJ’s investment portfolio:
Embark Health
Embark Health Inc. announced that it has been granted an amendment to its Health Canada licence for the sale of cannabis extracts, cannabis topicals and edible cannabis products from their facility in Delta, British Columbia.
The amendment to the Health Canada licence permits sales of Cannabis 2.0 products directly to Canadian Provinces & Territories and allows the company to further expand its existing and future product offerings to the medical and recreational consumer markets with concentrates, extracts and nano-emulsified topical and edible products.
WeedMD
. () () (FRA:4WE), a federally-licensed producer and distributor of medical-grade cannabis, recently announced its financial results for the three and nine months ended 30 September 2020.
CEO Angelo Tsebelis said: “Our revenue growth quarter-over-quarter demonstrates the current momentum we are seeing in our business, particularly in our adult-use segment where consumer appeal for our Color Cannabis products continues to grow.
“With our expanded national sales team, we are making steady traction in establishing new retail accounts and shipping product across the country at a faster pace.
“We remained highly focused on delivery of our expanding quality product portfolio to consumers during the quarter in the adult-use market and our proprietary direct-to-patient medical channel leading to improved margins going forward.”
For the three and nine months ended 30 September 2020, WeedMD recorded net sales of C$6.3 million and C$24.4 million, respectively, compared to about C$6.7 million and C$18 million for the same periods ended 30 September 2019.
Net revenue increased 8%, as compared to C$5.9 million during the second quarter of 2020.
MMJ’s 2020 annual general meeting
MMJ held its annual general meeting virtually on 30 November 2020.
Chairman Peter Wall said that “the MMJ Board is delighted that our shareholders have strongly supported the recommendations by the Board including the proposal to broaden its existing investment mandate to include strategic investments in sectors outside of cannabis, such as but not limited to, natural resources, pharmaceuticals and software services technology, which will comprise no more than 25% of the company’s total consolidated assets at the time the investments are made.”
MMJ’s funding position
MMJ is well-positioned to create value from its e existing portfolio with a liquid balance sheet and cashflows from investments:
Total assets of A$39 million with immaterial current liabilities.
Cash of A$3.7 million and a portfolio of listed equities (C$4.3 million), listed convertible loans (C$1.8 million) and unlisted loan securities (C$3.2 million) which provide MMJ interest income with flexibility to fund flow on investments, effect timing of investment exits and MMJ’s operating requirements.