4 Pot Stocks - MMJ, AGH, CAN, EXL

Pot stocks or cannabis related stocks are mushrooming in various parts of the world. In the recent times, Cannabis industry has witnessed a rise in the utilisation of cannabis for therapeutic purposes, post the legalisation of cannabis for both medicinal and leisure purposes across several nations.

Numerous players in the cannabis space have taken a leap towards manufacturing cannabis medicines following the proven healing properties found in it. Besides, cannabis have always been a topic of research, discussions and debates. Medicines which have been made from the purified substance extracted from the cannabis plant have demonstrated effective relief in various kinds of ailments, ranging from insomnia to epilepsy.

Cannabis sector is moving ahead with rapid strides, and the pot stocks’ future seems to be quite bright for the investors to put in their money, for the enhancement of the portfolio.

Let us now glance at four such pot stocks as follows:

MMJ Group Holdings Ltd

Plans to invest in Sequoya & establish in European Union:

MMJ Group Holdings Ltd (ASX: MMJ), an Australian company that invests in Cannabis sector, has planned to invest C$2.5m in Sequoya Cannabis Limited, which is a private company, as notified on 22 July 2019.

MMJ’s Investments, Source: Company’s Report dated 18 April 2019

The investment comprises of C$2.5m convertible note, which will be issued by the Canadian holding company. It would then be converted into ~34 percent of Sequoya’s issued capital in the time frame of 2 years. MMJ’s investment will be done by the company’s 100% owned subsidiary company namely- Phytotech Medical (UK) Pty Ltd. Also, MMJ expects to complete the investments in Sequoya Cannabis before 31 August 2019. MMJ will make this investment through this existing cash reserves of AUD25 million.

Moreover, through this investment the company plans to continue expanding in the European Union (EU), since EU possess a big market for medicinal cannabis. Besides, Embark Ventures would be handling the transaction procedure. Through this investment, it would be reflected the company’s potential to invest in private cannabis businesses, that is easily not available to the retail and institutional investors of Australian region.

The company plans to establish the cannabis extraction operations of Sequoya in Krakow, Poland. The company also intends to become a leader in the supply of CBD extracts and isolate in the European Union. The production of CBD from hemp is legal all over Europe and there are no cross-border tariffs inside the European Union, that will help the company to access high value markets like Germany and Northern Europe without tariffs. Further, the company will not require any specific permits to produce CBD from hemp in Poland.

Meanwhile, MMJ stock has generated a return of 23.40% in the last three months with a P/E ratio of 2.29x. On 23 July 2019, the stock of the company, last traded at A$0.305, up by 5.172% from its previous closing price.

Althea Group Holdings Limited

Trading Halt:

Althea Group Holdings Limited (ASX: AGH) stock has been put on a trading halt at the request of the company till 24 July 2019, pending a release of an announcement related to the acquisition and capital raise. This means that the company is planning to go for fund raising for an acquisition.

Meanwhile, AGH through the wholly owned subsidiary Althea MMJ UK Ltd along with the Drug Science Medical Cannabis Working Group, including the United Patients Alliance, have planned to launch the first national pilot for medical cannabis in UK. There is a plan to make an enrolment of 20,000 patients before the end of the year 2021. Therefore, the name given to the project is ‘Project TWENTY21’ (the Pilot), which is planned to start in the fourth quarter of CY 2019. This was planned to get launched formally on 18 July 2019. In this project, the company will initially target the patients that have Chronic pain, PTSD, Anxiety, Multiple sclerosis and Tourette’s syndrome. The company will then use the data for upcoming new regulatory system for medicinal cannabis in the UK region.

Althea Concierge UK (Source: Company’s Report)

AGH’s stock has given a return of 132.04% in the previous three months period. AGH’s stock last traded on 19 July 2019, at a price of A$1.195.

Cann Group Ltd

Victorian Government Receives the First commercially grown Australian medicinal cannabis resin:

Cann Group Ltd (ASX: CAN) had delivered the first medicinal cannabis that has been grown commercially in Australia to the Victorian Government, as notified on 14 May 2019.

For that purpose, the company had signed the supply contract with the DHHS (Victorian Department of Health and Human Services) for supplying the cannabis plant extract (resin). This has been done through the Office of Medicinal Cannabis (OMC) and has been produced in the Southern Facility in Melbourne, where the company has completed 39 harvests. The company is commissioning the facility Mildura for producing up to 50,000 kilograms of dry flower per year, expected to be completed in the third quarter of fiscal year 2020.

As mentioned in the March quarterly report, CAN expects to generate revenues in the range of approximately $160 to 200 million from 50,000 kilograms at the prevailing wholesale price of cannabis dry flower. The company would start to export after this facility gets commissioned and has already secured the needed export licence from the ODC. Cann is to seek relevant permit for export. The cost of construction of this facility is estimated to be about $130m, which will be funded by using the mix of debt progressing) and existing equity in the balance sheet. The company has signed an offtake agreement with Aurora Cannabis Inc., which is for five years and will cover CAN’s total current & planned future capacity.

CAN’s Major Expansion Program Comprising of World Class Facility (Source: Company’s Report)

CAN’s stock has given a negative return of 9.01% in the previous three months’ time frame. The stock of Cann Group, by the end of the trading session, on 23 July 2019, was at A$2.2, edging up by 3.774 percent from the prior close.

Elixinol Global Ltd

Acquired the intellectual property rights over microencapsulated technology:

Elixinol Global Ltd (ASX: EXL) acquired the intellectual property rights (IP) for microencapsulated technology, which was developed by Bionova, S.L. Further, Bionova will be the exclusive manufacturer and supplier of EXL products in the European Union, that will be made using the microencapsulated technology. This will be based on the minimum volumes for supplying the product as per the intellectual property rights. Moreover, under IP rights, an annual amount of €25,000 is fixed for each non-European Union country in which EXL would utilise the microencapsulated technology, till the time patent rights on the microencapsulated technology have been granted in that nation. The amount will be increased to €50,000 annually once patent rights gets granted in that country.

EXL’s Dietary Supplements (Source: Company’s Report)

EXL stock has given -22.33 percent return in the prior three months period. The stock of Elixinol Global last traded at A$3.9, slipping down by 0.763 percent from its last closing price.


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