Emblem Corp.: Canada’s Next Publicly Traded MMPR LP
Ryan Allway
December 12th, 2016
News, Top News
Canada’s cannabis industry has been growing at a rapid pace with nearly 100,000 registered patients, according to Health Canada. There are 36 licensed producers selling nearly 5,000 kilograms of dried marijuana and 2,500 kilograms of cannabis oil each quarter, which has generated millions of dollars in revenue that continues to grow at a triple-digit pace for many publicly-traded companies operating in the space.
Emblem Cannabis Corp. (TSX-V: EMC) is the latest publicly-traded licensed producer that was priced at $1.15 per share with a ½ share warrant that raised C$36 million in cash. With a book that was nearly two and a half times oversubscribed, there was strong demand for the new public offering in the country’s burgeoning cannabis industry. Investors interested in the space may want to take a closer look at the compelling opportunity.
The company’s management team has personally invested more than $6 million into the business and has extensive experience in the pharmaceutical, legal, and the cannabis industries. With incentives that are aligned with shareholders, management has sent a clear message to the market that they believe in what they’re building and aim to become one of the best marijuana companies in Canada over the long-term.
Unlike many other licensed producers, Emblem has focused on developing a fully-integrated business that handles all parts of the medical cannabis experience. The company’s Phase I production is already in place and Phase II will expand production to 2,100 kilograms by the second quarter of 2017. It has a further planned expansion to 11,600KG by Q3 2017 and potential capacity on all lands of up to 21,000KG. Its pharmaceutical division will focus on oils, gels, sprays, patches, and pills as alternative delivery mechanisms with potentially higher margins.
The company is also focused on educating patients as a form of marketing and retention. By establishing education centers within existing medical clinics, the company aims to develop a comprehensive educational footprint without the cost of setting up independent clinics – although it does plan to open a few stand-alone medical clinics.
On a financial level, the company aims to produce cannabis at $1.52 per gram and sell it at $8.50 per gram, which yields a 71% profit margin at full Phase II production. These high margins could enable the company to deliver a positive net income as early as the third quarter of next year, which could catalyze the stock price over the next nine months.
Key stats:
- Share Issued: 63M
- Performance shares: 14M
- Mkt cap: 88.5 million
- Management Ownership: 23.8%
- Institutional Ownership: 15%
- Cash: $28 million
For more information, visit the company’s website at www.emblemcorp.com.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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