48North Cannabis Corp (OTCMKTS:NCNNF, CVE:NRTH) is a low-priced pot stock that has been trading under the radar. But the company has the kinds of characteristics that should put it in the spotlight.
48North has one of the largest legal outdoor cannabis operations on the planet, it’s one of the lowest-cost marijuana growers, and it has expanded from Canada into the United States.
On top of that, the company recently reported triple-digit first-quarter revenue growth (swinging to profitability) and completed its first outdoor harvest.
Management says that, starting in the next quarter and going forward, it will be reporting increased revenue from the sale of its dried marijuana and other marijuana products.
2019 was a transformational year for 48North and, by all accounts, 48North Cannabis stock should soar in 2020.
NCNNF Stock Overview
48North Cannabis Corp is a seed-to-sale marijuana company that is focused on the health and wellness market. In addition to developing its own proprietary products, it has positioned itself as a contract manufacturer for third parties. (Source: “Investor Presentation — November 2019,” 48North Cannabis Corp, last accessed November 27, 2019.)
48North was the first publicly traded cannabis company to have an outdoor cultivation site approved by Health Canada.
The company’s assets include “Good:Farm,” a 100-acre, low-cost outdoor farm—the largest licensed organic marijuana farm in Canada.
At full capacity, 48North expects to cultivate 40,000 kilograms (88,185 pounds) of marijuana annually at Good:Farm. It’s expected to be the lowest-cost pot growing operation in the country.
In the first quarter of 2020 (ended September 30, 2019), the company’s total cost per gram was $0.25.
How does that fare in comparison to other producers? The average price for indoor-grown marijuana is $2.00 per gram while greenhouse-grown marijuana averages $0.90 per gram.
Ten minutes away from Good:Farm is “Good:House,” a 46,000-square-foot indoor processing and propagation facility.
“DelShen” is the company’s other indoor cultivation facility. The expected annual cultivation capacity at the 40,000-square-foot space is 2,500 kilograms (5,512 pounds) of dried cannabis.
48North’s expanding portfolio of brands includes “Latitude” (a women’s marijuana platform), “Mother & Clone” (nanosprays), “Apothecanna” (topicals), “Avitas” (vape products), and “F8” (accessories).
The Toronto, Ontario, Canada-based 48North Cannabis Corp has been making headway into the U.S. market.
In August, the company acquired Quill, a manufacturer of disposable vape pens that are available in Oregon and Washington. The company also has plans to expand into California and Nevada.
In September, 48North inked a contract with Iverson Family Farms for 1.0 billion milligrams of “high-quality active” cannabidiol (CBD) oil.
And in October, 48North announced it acquired Sackville & Co., which designs cannabis accessories and CBD products for women, including bongs, grinders, rolling papers, and rolling trays.
NCNNF Stock Information
|Market Cap||$44.4 Million|
|Shares Outstanding||170.9 Million|
|50-Day Moving Average||$0.40|
|200-Day Moving Average||$0.57|
(Source: “48North Cannabis Corp. (NCNNF),” Yahoo! Finance, last accessed November 28, 2019.)
First-Quarter Revenue Advances 229%, Swings to Profitability
On November 25, 48North announced that its revenue for the first quarter of 2020, ended September 30, 2019, jumped 229% to $1.6 million, from $484,000 in the fourth quarter of 2019. (Source: “48North Cannabis Corp. Announces Fiscal Q1 2020 Results After Completing First Outdoor Harvest,” 48North Cannabis Corp, November 25, 2019.)
The company reported first-quarter net income of $2.2 million, compared to a loss of $1.0 million in the same period last year. 48North ended the quarter with $40.4 million in cash, $99.2 million in assets, and $8.3 million in liabilities.
During the first year of outdoor operations, 48North harvested 12,000 kilograms (26,455 pounds) of dried marijuana.
The company met its initial projections for 2019, but its harvest volume was reduced because of delays in the availability of licensed drying space. The company, however, says that the problem will be resolved for the 2020 growing season.
Subsequent to the end of the first quarter, 48North completed construction at its CO2 and ethanol extraction facility, acquired Sackville & Co., and signed an exclusive licensing agreement with U.S.-based APCNA Holdings LLC to sell its topicals brand “Apothecanna” in Canada.
48North also launched its dried marijuana flower brands “First Harvest” and “Trail Mix.” They are expected to hit store shelves in winter 2020. Trail Mix is expected to be among the lowest-cost legal weed brands in Canada.
There are a lot of excellent marijuana penny stocks that are poised for massive growth, and one of them is 48North Cannabis stock.
As mentioned earlier, the company owns the largest licensed outdoor organic marijuana farm in Canada, has one of the lowest pot production costs in the country, and is expanding its operations into the United States.
48North Cannabis Corp’s finances massively improved in the last-reported quarter, and the numbers did not even include revenue from its outdoor cultivation facility. That revenue will begin to appear in the next quarterly report.
All this means things are looking good for NCNNF stock.