Canadian Cannabis Valuations up 200% in two years
250 acres of cultivation space stretching from Alberta to Ontario
Paid out $1,000,000 in Dividends representing $0.07 per Share
It might just be that Invictus MD Strategies Corp. (OTC: IVITF) (TSX.V: IMH) (FRA: 8IS) has adopted as a motto the elevating penultimate line from William Ernest Henley’s immortal poem Invictus: “I am the master of my fate”. Canada’s Cannabis Company appears completely unafraid as it ploughs ahead with its strategy to become a dominant company in Canada’s cannabis space. That boldness is paying off; Invictus is one of only a handful of cannabis companies declaring dividends. Now, with 250 acres of cultivation space stretching from Alberta to Ontario under management, Invictus is poised to deliver product to Canada’s medical and recreational marijuana markets, as Ottawa reiterates its determination to implement a legal framework for adult use by July 2018 (http://nnw.fm/a9CPC).
In executing that market domination strategy, Invictus’s management has pulled off some savvy deals since the company went public, under the symbol IMH, on the Canadian Securities Exchange (CSE) in December 2014. In March 2015, Invictus took up a 20 percent stake in hydroponic service company Future Harvest Development (FHD). Just four months later, it quickly increased that investment to acquire a majority holding and then sold off FHD’s Sunblaster Lighting division in February 2016. Those breathtaking developments provided a 216% return on investment; Sunblaster, sold for $2,850,000, had an acquisition cost of $900,000. Invictus now holds 82.5% of FHD.
Cannabis Health Sciences was another successful exit. The company, which publishes the Cannabis Health Journal, was bought for $45,000 and later sold for $230,000, earning Invictus a hefty return of 411 percent.
Invictus’ current portfolio companies have equal potential. Wholly-owned Acreage Farms of West-Central Alberta is currently valued at $34.5 million. The division received its cultivation license under the Access to Cannabis for Medical Purposes Regulations (ACMPR) on March 29, 2017, and is already operational. A 6,800 sq ft purpose built concrete and steel facility has already been constructed, and a planned expansion of 27,400 sq ft on the 150-acre property is imminent. Cultivation started in May 2017, and the unit is expected to reach output of 3,000 kg in 2018, 10,000 kg in 2019 and 25,000 kg by 2020.
In addition, together, associated companies AB Laboratories and AB Ventures are likely to do even better. Their joint production capacity is planned, by 2018, to hit 5,000 kg before climbing to 15,000 kg in 2019 and a level of 25,000 kg in 2020. AB Laboratories already has a cultivation license, received on October 21, 2016. The company, in which Invictus has a one-third stake, expects to get its sales license very soon and is currently valued at $30 million. Its facility in Hamilton, Ontario, covers about 16,000 sq ft.
AB Ventures is Invictus’s “startup” operation. The division closed a 100-acre acquisition in May 2017 and has filed an ACMPR pre-license application for that planned facility. It is aiming to develop 100,000 sq ft (about 2¼ acres) of cultivation and production space by 2019. The unit, in which Invictus also has a one-third stake, is valued at $22.5 million.
There is no doubt that halcyon days are ahead for Invictus. Valuations of cannabis companies have risen over 200 percent over the past two years, with some high fliers crossing the 300% mark. Valuations of ancillary businesses, those that supply services and equipment to the cannabis industry, are rising on the swell, too. Invictus was able to pay out a $1 million dividend to shareholders on December 5, 2016, representing $0.07 per share, because of its divestment of Sunblaster Lighting. With the Canadian recreational cannabis market projected to reach $6 billion, Invictus, now listed on the TSX-V under the symbol IMH, has a fate that looks decidedly promising.