I compare Bitcoin and pot stocks potential to someone in 1998 saying this crazy though: "Buy into the Internet market space" Not so crazy now...
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~~~~~Emerald Health WOWs American Investors~~~~~
Link to article
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Speed. Scale. Science.
These are the big drivers for Emerald Health Therapeutics as it vies to be the world’s dominant cannabis cultivator.
This is according to Bin Huang, the CEO and President of Emerald Health (TSX.V:EMH) (OTCQX: TBQBF), who addressed attendees of a recent MoneyShow.com investment conferencein San Francisco.
There was a packed, standing-room-only audience of around 200 people on-hand at an investment forum which was hosted by the cannabis news site Technical420.com. Not only did Huang make a big impression, but she also made a powerful case for Emerald Health’s vaulted ambitions.
Until recently, Emerald Health has been best known for being an R&D incubator of proprietary intellectual property in the race to innovate cannabis-based medicinal therapies.
This is why it has been such a low-key company — until now.
However, the well-financed start-up is no longer in stealth mode. Instead, an enthusiastic audience, mostly made up of US investors, heard first-hand how Emerald Health -- a publicly-traded Canadian licensed producer of medicinal cannabis -- is about to make the ultimate power play.
Emerald Health aims to out-do its Canadian and American competitors by out-producing everyone else. To this point, it plans to use its massive future output to dominate the burgeoning and extremely lucrative market for “value-added” oil-based cannabis extracts.
That said, there are a few other publicly-traded, licensed cannabis cultivators that have also announced their own plans to capture the lion’s share of Canada’s medical marijuana market, as well as the pending multi-billion-dollar business for recreational pot.
So is Emerald Health really a serious contender to be the biggest and best?
Read on and decide for yourself.
Let’s Start with “Scale”
Each of Emerald Health’s handful of big-time rivals is planning to spend in excess of CDN $100 million to build up to 1,000,000 square feet of state-of-the-art growing facilities. Also, each of these new climate-controlled “cannabis factories” takes considerable time to construct and commission.
The fact that these companies can raise so much money without difficulty these days is impressive. What’s not so impressive is that this can only be achieved via some serious stock dilution, which is very much to the detriment of shareholders.
Will this also be the case for Emerald Health?
Definitely not, according to Huang. Her company has deployed a shrewd leveraging strategy, which is an industry-first. It involves ramping-up output in a big way, and along an aggressive timetable. Indeed, it appears to be an optimal template for seriously scaling-up production, and at a relatively low-cost.
It entails a joint venture partnership with one of North America’s largest volume producers of hydroponically-grown supermarket vegetables.
Specifically, Emerald Health has teamed-up with Village Farms International Inc. (TSX: VFF). Headquartered in Greater Vancouver, Village Farms had sales of around CDN $206 million in 2016. It is also North America’s largest technologically-advanced, low-cost grower of supermarket produce.
This strategic alliance means that an existing network of sophisticated greenhouse growing facilities will be re-purposed to produce recreational cannabis — a much more profitable venture.
Village Farms will initially contribute 1.1 million square feet of existing state-of-the-art greenhouse capacity to the 50/50 joint venture partnership. This represents a growing capacity greater in size than 20 football fields.
This retrofit amounts to savings of at least 50% when compared to building a similar greenhouse capacity.
This significant mitigation of risk has investors particularly excited about this joint venture arrangement. In fact, the scalable retrofit of an initial 1.1 million square feet of greenhouses in the Greater Vancouver area promises to be the proof-of-concept that shareholders are excited about.
Assuming all goes according to plan, as much as 4.8 million square feet of greenhouse infrastructure can ultimately be retrofitted to cultivate cannabis via this arrangement.
This could yield more than 300,000 kilograms of dried flower cannabis annually. Which is about half of the anticipated national demand for cannabis per annum once recreational cannabis is legalized next summer.
Ultimately, this mega-ambitious business model will allow the company to develop value-added downstream products — namely cannabis extracts — which are very high-margin products.
“We want to become one of the biggest extractors of cannabis-based value-added products in the world,” Huang says.
In fact, oils that can be ingested as edibles (think chocolate brownies) or in medicinal formats (think gel capsules) are experiencing a doubling of sales in Canada every 90 days.
All told, the joint venture partnership represents a “transformational opportunity”, according to Huang.
Speed: Leveraging the Early-Mover Advantage
The joint venture partnership with Village Farms will allow significant economies of scale to be realized as yields get increasingly larger. This promises to make growing costs less than $1 per gram.
This exponential growth of output can also be achieved on an expedited timeline. The initial retrofit is expected to commence this November once Village Farms’ tomato crop is harvested. The first cannabis crop in the re-purposed growing facility is expected to be harvested as early as the middle of next year.
This gives Emerald Health a distinct early-mover advantage.
This is very strategic. With a looming multi-billion dollar legal recreational market in-the-offing, the company wants to be in pole position to capture significant market share.
In fact, there exists an unprecedented opportunity to earn brand loyalty among as many as an estimated eight million Canadians.
This mainstreaming of cannabis consumption is expected to be worth up to CDN $10 billion a year, according to investment industry analysts. It bears repeating that this new marketplace will open up as early as next summer.
Using Scientific Innovation to Unlock a Multi-Billion-Dollar Market
An accomplished scientist, Huang is also very focused on making Emerald Health a key player in Canada’s burgeoning big-dollar medical marijuana market.
With aPhD in plant cell biology, as well as an MBA, she certainly has the professional credentials to oversee the company’s commitment to pioneering medicinally-effective, cannabis-based therapies.
She also has a strong background as a senior executive with research-focused life sciences companies, and her skill set includes helping to bring pharmaceutical products to market.
Now she hasassembled a team of similarly talented scientists and researchers to advance Emerald Health’s pipeline of cannabis-based products.
Huang comments, “Our team has a great depth of experience in the biopharmaceutical industry, especially with developing innovative medicines.”
In particular, the company’s scientists are using advanced plant genetics to develop optimal cannabis strains and cannabis oils that can be dialled-in to treat specific types of pain and sleep disorders.
This steadfastness to the company’s core competency can be seen in Emerald Health’s undertaking to develop 100,000 square feet of state-of-the-art, indoor growing facilities in Greater Vancouver.
The new operation will also include a laboratory to incubate the company’s intellectual property, specifically plant genetics and innovative products.
The company’s existing pilot facility in Victoria will continue to focus on R&D, manufacturing oils and servicing medical patients.
Both of these operations are intended to operate independently of the joint venture arrangement with Village Farms. In fact,this new indoors in-development facility is where all of Emerald Health’s cannabis-based oils are expected to be manufactured.
Huang sees a big future for medicinal oils, which command very high margins. To this end, Emerald Health expects to become a leading brand.
“Ultimately, we're aiming to provide innovative, standardized pharmaceutical dosage medicinal cannabis in a pill or capsule format,” she says.
Investment Synopsis
Emerald Health’s smart application of leverage for high-impact, expedited expansion promises to be a powerful strategy for success in the capital-intensive business of growing vast quantities of premium-grade cannabis.
It certainly represents a key differentiator that should allow Emerald Health to be ready to fully embrace a looming multi-billion-dollar recreational market for cannabis.
The fact that this can be done cost-effectively also offers the company another major competitive advantage.It will also allow the joint venture partners to be among Canada’s lowest-cost producers.
Hence, Emerald Health’s joint venture partnership with Village Farms is a game-changing differentiator that should ensure that significant market share is captured in the early going.
Ultimately, much of the company’s revenue growth will be derived from the mass-production of high-margin cannabis oils. And this is where the company aims to out-perform all of its competition.
Furthermore, let’s not forget that Emerald Health is also poised to become a market leader — perhaps even a household name — in the blossoming medical marijuana sector.
In summary, Emerald Health is poised to capitalize on several different market verticals which should generate lucrative revenues streams for many years to come.
In this regard, it’s not hard to see how Emerald Health is an investment opportunity that has unlimited upside potential within the next 24 months, and beyond.
Also, not 100% sure if this applies to US trading/SEC rules for OTC but I do know it applies to the Canadian exchange; if you are using a purely investment type of trading account (where you pay taxes on gains), set your shares for sale using a GTC limit order at an exaggerated price like $50 USD. This will prevent brokerages from lending your shares out to those who want to short the stock. (Brokerages lend those available shares to their clients or institution trader who want to short the stock).
Individually it doesn't have much effect, but in numbers this strategy does limit their manipulation powers and increases the risk each brokerage is faced with when deciding how many shares they want to lend out. End result, the back office financial analysts allow less house shares to be shorter to stay in line with house risk guidelines.
Trust me, I was them for a little while... ;)
Do your American brokerage accounts allow you to buy Canadian shares?
I've been playing around with about 10K CAD selling EMH Canadian side and buying EMHTF when Canadian bids and US asks gives a decent trade off. Considering exchange rates plus forex fee and trade costs of course. On a few occasions in the last 12 months (maybe 5 or 6) I've managed to make this move and net 1.5% gain. On one occasion my theory is that marker makers were sleeping or not paying attention but I managed to trade in-kind from EMHTF to EMH that resulted in a 6% net gain.
Asking mostly out of curiosity but also giving you guys a heads up that MMs will make that more first thing tomorrow morning and EMHTF will likely drop a few points in early trading. Either be ready to buy on the dip or sell first to buy back immediately after the MMs do their CAD/US trades. Or safely do nothing and hold tight because everyone knows this is going to 20$ a share in a few years ;)
I'll post it for you tomorrow if I remember.
How do you guys feel about the new CEO coming in?
I was worried when I first read the news because usually a new CEO is a bad sign for a company. Thankfully this move is a huge plus for EMH. Mr. Wagner has an impressive track record to say the least. Also happy to see that Bin Huang is remaining in the company as president.. her bio is a big factor in my decision to invest big in the company.
Haven't checked in here in a while. How my American EMH investor friends doing?
Hope you are all up to date with the province of British Columbia developments. The provincial government started working on legalization plan. Patiently waiting.
I hear ya.. but that kind of money for someone in their 20s is significant.. at that point id build a balanced portfolio and be set for life!
There is a good chance the 4M sq ft facility will become reality. Think about the situation Village Farm is in... they are currently profitable growing peppers, cucumber, tomatoes etc, and have the opportunity to switch from growing those to growing weed!! Profit margins are probably 10x higher. The way i see it, the only reason i can think of for them not to decide to convert all their operation from veggies to weed is if they have some sort of emotional attachment to partially keeping their business the way it is, say if perhaps to continue a family heritage. Aside from that, the clear business decision is to go all out weed growers.
At work we have a name for young clients who made a fortune in weed stocks in recent years... baby weed millionaires lol
Its now a normal thing to see 20 year olds with 250K in tax free accounts who made initial investments of aroind 20k...
I want to be one of them so bad!
I say itll hit that price in 2018 but im biased as all hell being heavily invested here already!
EMHTF currently a better buy than EMH given CAD to USD exchange.
Ive been on the down low the past week on the boards... finalizing a friendly termed loan with a wealthy family member in order to triple my position in Emerald and I want to buy the shares as cheap as possible. We are part of the lucky fee at this point aware of EMHs potential.
Clearly because both of you know what the f*** you are actually doing!
Here's to the huge amount of cash we will make with EMHTF!
ANNUAL-REVENUES-OF-$1.8-BILLION ESTIMATED-$EMHTF$
Production is estimated to yield more than 300,000 kg of cannabis annually and could supply a considerable portion of expected future cannabis demand in Canada or for export abroad.
1kg = 1000 grams
300,000kg = 300,000,000 grams
If on average each gram is being sold for more or less $6, EMH will have annual revenues of $1.8 Billion.
ANNUAL REVENUES OF $1.8 BILLION ESTIMATED.
Production is estimated to yield more than 300,000 kg of cannabis annually and could supply a considerable portion of expected future cannabis demand in Canada or for export abroad.
1kg = 1000 grams
300,000kg = 300,000,000 grams
If on average each gram is being sold for more or less $6, EMH will have annual revenues of $1.8 Billion.
EMERALD-HEALTH-most-undervalued-Canadian-weed-producer!
US: EMHTF
TSXV: EMH
• They signed contract with VillageFarms (TSX: VFF, they supply greenhouse grown fruits and vegetables to Walmart,Safeway, and Loblaws just to name a few) to transform an initial 1.1M Sq. Ft. of their current greenhouses to weed producing greenhouses. Transition work begins November 2017. Once complete they will be the world's largest weed producer. Contract also includes the option to increase Sq. footage of weed producing greenhouse space to 4.8M Sq. Ft. thus making EMH the world's largest weed producer by a long shot.
• Target total production cost of $1/gram once greenhouse work complete. They will have the lowest production cost in North America (and likely worldwide). Immense profit margins are a given.
• They have the strongest corporate team of any Canadian producer. Read the company's corporate profile for details.
• In addition to being the largest producer, they have an additional edge on the rest with their pharmaceutical research and background. CEO was president of a multination pharmaceutical giant for several years.
Here is the press release about the joint venture with VillageFarms.
News Release
There are several other positive fundamental analysis facts about the company I did not cover in this post as well as strong current technical analysis.
Emerald is a true gem and the opportunity of the decade!
Hit me up for more information about it.
Cheers.
April 10th a venture capital company bought (via bought deal basis, meaning they assumed all risk) $17.5M CAD worth of shares of EMH at $1.85 CAD.
It's rare to be able to buy shares for this much less than a company doing a bought deal. They have highly educated (and paid) financial analysts who decided it was worth the risk to invest $17,500,000 CAD into EMH @$1.85 CAD.
Just another reason this company is currently a gem for investors.
Link to press release
How can EMH not be on the list? They are preparing to become not only Canada's largest weed producers, but the WORLD's largest weed producers!
1.1M square foot greenhouse work to begin in November 2017. Greenhouse is currently set up for tomatoes (VillageFarms VFF) and conversion of facility to be ready for recreational legalization July 1st 2018.
Unclear why EMH is still so under the radar!
News release
Emerald-Health-set-to-become-the-world's-largest-producer-1.1M-Sq.Ft.-Greenhouse
No bullshit here, this a legit TSX Venture company who just signed a game changing contract with VillageFarm (VFF also on the TSX, supplies greenhouse grown fruits and vegetables to companies like Walmart and Safeway, just to name a couple).
They will have the lowest production cost out of all the LPs in Canada.
Get in while they are still cheap!!!
US symbol: EMHTF
They definitely will. Corporate team is made of all stars. They will make it happen. July 2018 is a date that represents incredible change for Canada and businesses operating in the industry. It'll be revolutionary really... They won't miss the date.
And I retire way early ;)
But also, with the low float here any surge in volume will make the stock price sky rocket.
U.S. investors can easily make this happen through EMHTF.
Hopefully iHub members can find this gem soon!
1.1 MILLION Sq.Ft. Weed Producing Greenhouse-November 2017
The work to modify the current greenhouses at VillageFarms into weed producing greenhouses set to start in November 2017.
Once completed, Emerald Health will not only become Canada's LARGEST weed producers but also the WORLD'S LARGEST weed producer!!!
Expect this stock to be around $4/share by 2018.
Those invested here now and in for massive short term gains.
The company stated they are confident they will achieve 1$/gram of total production cost, thus having the lowest production cost of all licensed producers and highest profit margins.
Private MorningStar Research Report sets current fair value for EMH (August 2nd 2017) at $1.50 CAD or $1.20 USD with current exchange rates.
All 5 analysts who worked on report place EMH in the Very Undervalued bracket.
No surprise here but they also all say EMH is Very High Risk.
Estimate revenue growth in 2018 set at 562%.
I'll fix up the intro for the board to make it easier for potential new investors to do their DD
Need 4 posts to become moderator.
Funny you bring MYM up. I traded it for a while between 0.05 and 0.10 a year ago or so. If only I held the shares lol... don't know much about the company though. Based on technicals I wouldn't get in now as a trade.
It's been almost a year since my last iHub post but just dropping by to say it's good to see my American friends discovering Emerald!! You guys should drop by the Stockhouse EMH board (aka the Canadian iHub) and share your thoughts about EMH.
Our company is clearly a huge winner. We simply need more investors, big and small, to invest for the long run and the share price will soar!! Cheers, I'll be stopping by here every now and then.
Just dropping by to give a genuine piece of advice for my fellow Canadians!
I've enjoyed a nice bottle of wine tonight and had the sudden urge to mention this huge mistake I see way too often working in wealth management for one of the big Canadian Banks.
This is mostly directed to young and novice investors who have made massive gains in the recent green rush within their self directed TFSAs. Never withdraw more than the current maximum allowed contribution limit!!!
On several occasions lately I've seen 20 something year olds who hit big with risky investments, such as using a 20K personal line of credit to buy stocks like APH and OGI one year ago to see their TFSA account equity grow to as much as $230,000 today(I shit you not!!!), sell their shares, and make a full withdrawal. If only they knew they will never be able to put that amount back in to their TFSA.
I'm sure a lot of you are reading this saying this is obvious but I don't care about what you have to say because I am drunk. Hopefully this can benefit at least one person!
If this person is you and you want unbiased free advice one the options you have, it will be my pleasure.
As a rule of thumb though, never withdraw more than the current allowed contribution (currently 46,500), and look for high quality dividend paying stocks for what ever is left over. In the example I gave before, he should have withdrew 20K to pay back his line of credit, paid off any other debts up to a maximum combined amount of 46,500, and if any of that was left over I would suggest strippers and co.... sorry about that. Industry standards.
But seriously, assuming 46,500 withdrawal that guy would have been left with 183,500 in his account. Spread out into blue chip stocks, he would have benefited from minimum 4% annual dividend income TAX FREE. That's 7,340$ per year or $611 monthly... with a near 100% guarantee. TAX FREE. Could have used that toward roughly a 150K mortgage. Or he could have opted for DRIP (dividend reinvestment plan) and watched his quarterly dividends grow exponentially.
If you are still reading my heart-filled iHub rant to help fellow Canadian in, you clearly have nothing better to do on this cold Saturday morning. But on the other hand here I am getting more intoxicated with every sentence.
Anyways, the above example is a dream type scenario. Most won't have the luck to choose such a stock, the balls to take such a risk, and the discipline to not take profits early. At the end of the day, don't withdraw more than the contribution maximum unless you absolutely need it!
Cheers,
MarketShark
Alliance Growers Corp (ACG) new Canadian pot stock that has yet to see any huge gains!
We will eventually start receiving dividends for being shareholders here. Give it a few years!
Haha! I need to look at where the company is now before I make my decision. It definitely has its pros and cons! Technical analysis looks promising, fundamental analysis however not so much.
I've been eyeing the BBD.C shares for a little while now. They have relatively the same growth potential for capital gains as the BBD.B shares and on top of that they pay dividends with about a 9% annual yield. They seem like a no brainer, what do ou think?
You still believe in this one...? I'll go through the Q2 earnings out of curiosity but not sure I'd get back in here.
Although it is currently right around it's 4-5 year low...
For sure. The bought deal shares had to start being sold at some point... They waited for the stock price to be high enough and then started realizing their gains!
Holy smokes looks like we are going to gap up 10% this morning... all the pot stocks will be opening about 10% higher!!!
Just holding on to the rest of my 1.49s and enjoying the ride!
Including the over allotment option included in the bought deal, Dundee Securities has unrealized gains of $7.8M at current share price... Some analyst will be getting a nice bonus...
1.74!
New annual high 1.68 and climbing!
No chance it goes back that low. Bought deal means the company won't be diluting since they received the cash up front from Dundee. They won't dilute because if they needed more financing, today's bought deal would be larger. Dundee won't sell us the shares they paid for less than they paid. Only current major shareholders (insiders) would benefit from selling under 1.30, but they won't do that because OGI is only going up!
Unfortunately that is your opinion since you probably only invest in penny stocks and micropennies. I would agree that news in the OTC leads to the stock dropping because they use the PR to dilute. This is not true for real investments that trade on exchanges! Just a friendly FYI