Though the shares of this marijuana-related company have retreated a bit, its new collaboration offers an opportunity to participate in this growing sector at a discounted value. Our second recommendation is a sale on a company that is not living up to its promise.
Emerald Health Therapeutics, Inc. (EMHTF)
From The National Investor
Emerald Health Therapeutics, Inc. (EMHTF) is a company I have been getting to know better for quite some time. My interest was ramped up greatly earlier this summer when I was invited to attend a luncheon presentation put on by Emerald management in the Orlando area.
The clincher for me came in just the last few days via the company’s announcement of a major new collaboration, and as I realize that this company still has nowhere near the market cap of peers who—for now—are getting all the attention.
While there’s no guarantee that EMH shares are going to repeat their 15% gain of yesterday today, I think that when you consider the above chart, the odds are pretty good that this stock wants to break out.
Victoria, B.C.-based Emerald, http://emeraldhealth.ca/, covers pretty much all the bases; and has had the wisdom to make early deals with partners who give it an edge over others. As you can learn at Emerald’s web site (and I’ll have more color of my own on the company in the very near future separately) its aggressive growth will before long have it rivaling the overall growing capacity of some better-known (and FAR more expensive) competitors.
But what its competitors do not have is the first major collaboration of a marijuana grower with an established, large scale green house. In its deal announced last year with Village Farms, International (VFFIF) Emerald joined its specific expertise on cannabis cultivation with Village Farms’ industry-leading know-how and economies of scale in running greenhouses (http://villagefarms.com/)
Their 50/50 collaboration in the company Pure Sunfarms should over time—among other things—render the company one of the more efficient and least expensive growers. The companies have jointly announced several things in recent weeks, augmenting their overall capacity and more.
One of the items you’ll find on the news page is this: Emerald’s announcement Monday that it has signed a term sheet to form a strategic alliance with Factors R&D Technology, Inc. (“FTI”), a division of Factors Group of Nutritional Companies Inc. Provided all moves forward according to plan, this will add to Emerald’s “team” Canada’s largest nutritional supplement manufacturer and marketer; and give Emerald yet another key advantage over competitors.
Said Emerald’s Dr. Avtar Dhillon, Executive Chairman, “This strategic alliance with FTI will provide us industry leading expertise and capacity through FTI’s proprietary phytochemical extraction technology. Accessing FTI’s infrastructure will allow us to dramatically shorten our commercial ramp-up from years to a few months, allowing us to leapfrog competitors attempting to build out their own extraction and encapsulation facilities.” (Emphasis added.)
And besides things like this to position Emerald to move ahead of the pack when it also comes to packaging and selling nutrition supplements and the like based on cannabis and/or its derivatives, Emerald is looking elsewhere for opportunities as well. I also learned this week that Emerald owns a majority position in a little Costa Mesa, California-based biotech company Nemus Bioscience, Inc. (NMUS) —a fascinating company whose most research-stage offerings include a couple so-called prodrugs.
As I was speaking a couple days ago with one of my contacts at Emerald and we discussed this, of course our discussion turned to Vitality Biopharma and its unique prodrug science and far more advanced candidates. And that only makes sense that Emerald is interested in this science, as Dr. Dhillon is also a Co-founder and Chairman of Vitality!
It appears to me that the pieces have been put in place for Emerald to overtake the others as its collaborations and everything it has been putting in place bear fruit, and eventually put it right up there with the leaders. And that we have a company with a fraction of the market cap of many of the big names is especially compelling today.
Chris Temple, The National Investor, www.nationalinvestor.com, 224-308-2587, August 30, 2018