Here's an Article that was written up on $ISOLF by 420 this morning.
Earnings season is coming to a close and cannabis companies have been reporting much stronger numbers on a year-over-year basis. When it comes to considering a company as a potential long-term opportunity, two trends you want to see are improving fundamentals and continued execution.
One company that meets this criteria is Isodiol International Inc. (ISOL:CNX) (ISOLF). The company is a global Bioactive Phytoceutical innovator specializing in the development of pharmaceutical and nutraceutical products.
We are favorable on Isodiol due to its strategic partnership with leading cannabis companies such as Canopy Growth (WEED:APH) (TWMJF), Nuuvera (NUU:APH) and Namaste Technologies (N:CNX) (NXTTF), as well as its continued execution where Isodiol remains laser focused on increasing its global footprint.
Quarterly Numbers Show Strong Growth
Last week, Isodiol released third quarter financial and operating results. During the quarter, the CBD innovator generated almost $6 million in revenue which is incrementally higher than the same period last year.
Isodiol attributed the growth and profit increase to greater distribution, reduced manufacturing costs, portfolio diversification, and the continued integration of wholly owned subsidiaries.
Over the last year, Isodiol has been nothing short of an execution story and has become a global CBD leader. During this time, the company expanded operations and has continued to gain traction in international markets such as Latin America and Europe.
Isodiol has made some significant announcements over the last quarter and during this time, the company has strengthened its balance sheet by completing a $30 million non-brokered private placement at $1.25 per unit.
The stronger balance sheet allows Isodiol to continue to pursue additional global growth opportunities. The company has also made significant traction in operations with wholly owned subsidiaries such as ISO-Sport, Be Tru Wellness, and Bradley’s Bioscience, which provides several catalysts for growth.
Isodiol Secures Two Strategic Canadian Partners
Among the most significant developments in 2018 have been the strategic partnerships that Isodiol has entered into. During this time, the company has announced a LOI with Nuuvera (NUU.V) pertaining to importing CDB as well as a supply agreement with Namaste Technologies (N.CN) (NXTTF).
Isodiol and Nuuvera have agreed to import 99%+ pure, bioactive pharma-grade CBD isolate into Canada from Isodiol’s GMP-certified production facility in the United Kingdom. The product will be imported into Canada through Nuuvera’s subsidiary, ARA - Avanti Rx Analytics Inc., a Health Canada GMP-certified laboratory holding a dealer license.
The agreement with Namaste, is mutually beneficial for both companies. The agreement offers a new domestic and international sales channel for Isodiol to distribute its products and adds significant value to Namaste’s product offering on a global scale. Namaste intends to distribute the products in regional markets where cannabinoid products are available.
Continues to Expand Via Organic and Inorganic Growth Initiatives
Isodiol continues to grow through organic and inorganic growth initiatives. We are favorable on this multi-faceted growth strategy and will monitor the impact it has on revenue numbers over the coming quarters.
In mid-January, Isodiol signed a LOI to acquire 100% of the CBD assets of Green Island Naturals, a formulator, marketer and seller of a proprietary line of hemp extract products that are distributed in retail and online channels in Canada. In 2017, the company generated $2 million in revenues and with the support of Isodiol expects to see exponential growth this year.
In late 2017, Isodiol entered a binding agreement to acquire the Biosynthesis Pharma Group (BSPG), an industry leading producer of industrial hemp. Through BSPG’s proprietary extraction methodologies, the company produces cannabinoids that are used in pharmaceutical applications. From Hong Kong to Austria and from China to the U.K., BSPG is comprised of multiple entities that will benefit Isodiol.
In early December, Isodiol entered a binding agreement to acquire Be Tru Organics, a formulator, marketer, and seller of a proprietary line of hemp extract products. Shortly after completing the acquisition, Be Tru Organics started the process of distributing products to Erewhon Natural Foods, a supermarket chain in California that has been providing organic foods and products to consumers since the late 1960s.
With the recent capital raise, Isodiol is well positioned to grow these strategic assets and build on the existing revenue streams. We expect these acquisitions to prove to be accretive and are favorable on the strategy.
Continues to Execute and Deliver Results
When we analyze marijuana companies, we look for companies that are executing on previously announced initiatives. This is important because many cannabis companies simply just release news for a short-term spike.
Isodiol is a company that continues to execute on previously announced initiatives and is led by a management team with a proven track record. We are favorable on these traits and believe investors need to keep an eye on Isodiol.
Isodiol has been laser focused when it comes to executing on initiatives, raised capital at $1.25 per unit, and is trading below this level. Despite the recent announcements, Isodiol has been under pressure in 2018 and the shares are down more than 20%.
This pullback has created a great opportunity for new and existing investors. We think the recent developments have Isodiol positioned for significant growth and will keep an eye on how the shares move from here.
