MYM Nutraceuticals Inc: A Risky Cannabis Penny Stock With Massive Potential

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MYM Nutraceuticals Inc

If you’re tired of reading about the same cannabis stocks, perhaps it’s time to focus your 4:20 gaze on MYM Nutraceuticals Inc (OTCMKTS:MYMMF, CNSX:MYM).

But be forewarned, MYM Nutraceuticals Inc is not for the faint of heart. It’s a risky marijuana stock that has been overlooked by investors.

But if its marketing plan is to be believed, it is on the verge—over the next year or so—of becoming a major international player in the cannabis and hemp industry. Over the last few months, MYM has made a number of key acquisitions and has  taken strides to meet this objective.

On April 9, the company entered into a partnership to grow 3,000 acres of hemp on Navajo Nation land in New Mexico. While it’s still in the development phase, the company has a footprint of 3,205 acres for production, which could yield more than 30.2 million pounds of cannabis and hemp annually.  (Source: “MYM Partners to Grow 3,000 Acres of CBD-Rich Hemp on the Navajo Nation,” PR Newswire, April 9, 2019.)

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MYM Nutraceuticals Inc Overview

MYM Nutraceuticals is a Vancouver, British Columbia-based cannabis company focused on building cultivation facilities worldwide. It is also in the business of the acquisition and growth of other cannabis-based businesses and brands. (Source: “About,” MYM Nutraceuticals Inc, last accessed April 9, 2019.)

Properties

Navajo Nation: MYM has partnered with the Navajo Nation to grow 3,000 acres of hemp in New Mexico. The passing of the Agriculture Improvement Act of 2018 opened the door for farmers to legally grow hemp and, therefore, cannabidiol (CBD).

MYM’s one-year target for this property is 100 acres of CBD farming, with a five-year target of 3,000 acres. At full capacity, total annual production is expected to hit 30.2 million pounds.

Laval, Quebec, Canada: MYM Nutraceuticals is working on a 37,000-square-foot indoor facility in Laval that will focus on high-quality specialty “craft” cannabis varieties that it will harvest every 21 days.

At 10,000 square feet, Phase 1 is complete and awaiting licensing from Health Canada, which is expected to come in the second quarter. Cultivation for validation with Health Canada will occur in the third quarter of 2019. At full capacity, total annual production will be 5,690 pounds.

Weedon, Quebec, Canada: The company’s Weedon facility has the potential to be one of the largest greenhouse cultivation projects in Canada. The 1.5-million-square-foot project has been approved by the City of Weedon, and a license application has been submitted to Health Canada.

The initial construction of the 30,000-square-foot greenhouse is underway. Total annual production at full capacity will be approximately 353,000 pounds.

Nevada: MYM Nutraceuticals has a partnership with Elite Ventures to grow 125 acres of CBD-rich hemp in Nevada. Based on previous crops grown on the property, the company expects 119,000 pounds per harvest, with a potential revenue of $26.0 million. With this deal, MYM is entitled to $13.0 million (50%) of total revenue.

Medellin, Colombia: Colombia is turning into one of the hotbeds for legal cannabis production and exportation. MYM has acquired 80% of Colombia Organica, a Colombian company that holds three licenses: production of tetrahydrocannabinol (THC) cannabis derivatives, cultivation of psychoactive cannabis, and cultivation of non-psychoactive cannabis. Total annual production, at full capacity, will be 1.3 million pounds.

Australia: MYM Nutraceuticals is currently exploring projects in Australia, which legalized medical marijuana in 2017. Although construction has yet to take place, the company has established MYM Australia Pty Ltd. and expects its first cultivation in 2020.

Australia recently said that it will allow manufactured medicinal cannabis products to be exported, expanding its position in the global marijuana market. 

MYM Nutraceuticals Inc Stock

MYM Nutraceuticals Stock Information
Market Cap $51.1 million
Beta 1.47
52-Week Change -71.6%
52-Week High $1.60
52-Week Low $0.33
Shares Outstanding 120.1 million
Float 100.5 million
50-Day Moving Average $0.41
200-Day Moving Average $0.52

(Source: “MYM Nutraceuticals Inc. (MYMMF),” Yahoo! Finance, last accessed April 10, 2019.)

Suffice it to say, MYM Nutraceutical stock has been pretty underwhelming. At a time when most cannabis stocks have been soaring, MYMMF stock has been tanking.

And that’s not something you can blame on the fourth-quarter 2018 marketwide sell-off. It doesn’t help that the company isn’t generating any revenue but is spending lots of cash.

That said, MYM has made some great moves over the last nine months and is, relative to the last 16 months, trading in an attractive range.


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Q2 Results

In late January 2019, MYM Nutraceutical announced its financial results for the second quarter ended November 30, 2018.

The company didn’t generate any revenue in the second quarter. In fact, MYM reported that its net loss widened to $6.2 million from a net loss of $918,165 in the same period in 2017. (Source: “MYM NUTRACEUTICALS INC.” MYM Nutraceuticals Inc, January 28, 2019.)

At the end of the second quarter, MYM Nutraceuticals had cash and cash equivalents of $912,650, compared to $6.6 million on May 31, 2018.

That’s not a lot of cash to rest your corporate laurels on. Fortunately, on January 13, 2019, the company announced that it executed a definitive agreement for a $25.0-million equity investment by Alumina Partners LLC. (Source: “MYM Announces Definitive Agreement with Alumina Partners LLC for $25,000,000 Equity Investment,” MYM Nutraceuticals Inc, January 13, 2019.)

Alumina is a New York-based private equity firm that has made substantial investments in the cannabis space on a private placement basis.

The private placement can be drawn over a two-year period, subject to agreement by Alumina.

If you judge MYM Nutraceuticals just by its share price, you might not take a second (or even first) look at it. But that could be a mistake. The company has been taking great strides to turn itself into a world-class cannabis and hemp company.

In June 2018, the company announced its purchase of 329 acres in Weedon, Quebec and announced that it had started construction of its facility in that township.

In July 2018, MYM announced that it had entered into an investment agreement with Colombia Organica. The two companies have made progress with negotiations and MYM expects to finalize and announce an amended agreement in the next quarter.

On August 1, 2018, the company announced that it had entered into a two-year agreement with Dutch Passion Seed Company, an international cannabis seed company, for the production and distribution of Dutch Passion branded products and seed genetics in Australia. (Source: “MYM Partners with Award Winning Dutch Passion for the Production and Distribution of Cannabis Seeds in Australia,” MYM Nutraceuticals Inc, August 1, 2018.)

On August 8, 2018, MYM announced it entered into a second agreement with Dutch Passion for the production and distribution of Dutch Passion branded products and seed genetics in Colombia. (Source: “MYM Partners with Award-Winning Dutch Passion for the Production and Distribution of Cannabis Seeds in Colombia,” MYM Nutraceuticals Inc, August 8, 2018.)

On September 26, 2018, MYM announced that it entered into a third agreement with Dutch Passion, for the exclusive rights in Canada to produce and distribute all products that Dutch Passion currently sells and may sell. (Source: “MYM Partners with Award Winning Dutch Passion for the Production and Distribution of Cannabis Seeds in Canada,” MYM Nutraceuticals Inc, September 26, 2018.)

MYM is also pursuing funding opportunities to meet the company’s short-term liquidity needs and funding for capital projects.

Analyst Take

Admittedly, MYM Nutraceuticals might not be the kind of stock you’d invest the kids’ college funds in, but it’s definitely one worth keeping a close eye on.

MYMMF stock has been beaten down recently, but the company has taken big strides on its path to becoming a major international competitor.