MYM Nutraceuticals Inc Has Massive Upside Potential
MYM Nutraceuticals Inc (OTCMKTS:MYMMF, CNSX:MYM) has, like the broader cannabis industry, seen a selloff in its stock. During the fourth quarter 2018 selloff, MYMMF stock tumbled 58% and lost an additional 55% of its value during the May/June period.
As with any selloff or correction, there are some stocks that were attractive before, during, and after the tumble. MYM Nutraceuticals is one of those companies. Admittedly, it’s a riskier marijuana stock—a true penny stock—but there is a lot going on at the company that makes it worth keeping a close eye on.
In 2019 alone, MYM Nutraceuticals Inc has made a number of strategic acquisitions; negotiated a number of hemp production and distribution agreements in North America, South America, and the South Pacific; partnered to grow 3,000 acres of cannabidiol (CBE)-rich hemp on Navajo National land in New Mexico; seeded 400 acres at its properties in Saskatchewan; and seen its joint venture sign a purchase agreement to sell 163,000 pounds of hemp biomass.
MYM Nutraceuticals isn’t a revenue-generating company yet, but all of that will change later this year and especially in 2020. Wall Street isn’t paying much attention to MYM Nutraceuticals right now, but that will change in the coming quarters.
MYM Nutraceuticals Inc Overview
Through a variety of global partnership in cannabis-friendly areas around the world, MYM Nutraceuticals is actively working to position itself as a global leader in CBD-rich cannabis, hemp, and seed cultivation.
The Vancouver, B.C.-based company currently has three hemp cultivation and extraction projects, two medical cannabis cultivation projects, and three cannabis distribution offices located around the world. (Source: “Production Facilities,” MYM Nutraceuticals Inc, last accessed July 12, 2019.)
In Saskatchewan, MYM acquired 50% of BioHemp Naturals to cultivate 400 acres of hemp in the 2019 grow season, expanding to 3,000 acres in 2020. Annual production at full capacity is 4.5 million pounds. (Source: “Strategic Plan Q2 2019,” MYM Nutraceuticals Inc, last accessed July 12, 2019.)
In Nevada, the company partnered with Elite Ventures Group LLC to grow 120 acres of hemp. Estimated production is 120,000 pounds per harvest; MYM is entitled to 50% of the potential $26.0 million in per-harvest revenue.
MYM Nutraceuticals acquired 80% of Colombia Organica, a Colombian firm that owns three licenses for the production of tetrahydrocannabinol cannabis derivatives, the cultivation of psychoactive cannabis, and cultivation of non-psychoactive cannabis. The licenses are approved for exportation. At full capacity, annual production is projected to be 79,366 pounds.
The company is building a 37,000-square-foot indoor grow facility in Laval, Quebec focused on “craft” varieties of cannabis. Once planted, it will be harvested every three weeks. The 10,000-square-foot Phase 1 is complete and awaiting licensing from Health Canada. Annual production will peak at 5,290 pounds.
The company has been approved to develop a 1.5 million-square-foot greenhouse project in Weedon, Quebec. The initial 30,000-square-foot buildout of the facility is underway; once completed, the project will be one of the largest production facilities in Canada, with total annual production of 352,000 pounds.
MYM Nutraceuticals has made a number of key announcements over the last month which will have an immediate impact on revenue and profitability. The company is also exploring opportunities in Australia, Mexico, and Europe.
MYMMF Stock Information
|Market Cap||$38.0 Million|
|50-Day Moving Average:||$0.25|
|200-Day Moving Average:||$0.37|
(Source: “MYM Nutraceuticals Inc. (MYMMF),” Yahoo! Finance, last accessed July 12, 2019.)
MYMMF stock has been trending downward since the start of 2018. It took an accelerated dive during the fourth-quarter selloff and then again in May and June.
It’s tough to find cannabis stocks right now that are downright bullish. The reason? In the run-up to legalization of recreational marijuana in Canada in October 2018, exuberant investors got ahead of themselves and sent cannabis stock valuations into nosebleed territory.
Earnings are rolling in and most pot stocks aren’t living up to management’s lofty predictions. Revenues are solid, but operating costs are soaring and profitability is rare. As a result, the cannabis industry is going through some growing pains.
Instead of looking to jump on the bandwagon of the hottest pot stock, investors need to hunker down and focus on those cannabis players with great potential.
It’s not as if the cannabis industry is going away. It’s barely in its infancy. Again, recreational pot only became legal in Canada in October and it’s only legal in 11 U.S. states. Eventually, adult-use recreational cannabis will become legal in the U.S. on a federal level—certainly not with this Congress, but eventually with another.
Chart courtesy of StockCharts.com
On April 24, MYM Nutraceuticals announced its financial results for the third quarter ended February 28, 2019. The company didn’t report any revenue in the third quarter or first nine months of fiscal 2019. (Source: “MD&A,” SEDAR, April 24, 2019.)
As expected, the company’s net loss widened as it prepares for commercialization and its first sales. The net loss for the third quarter of 2019 widened to $3.96 million, or $0.03 per share from a loss of $1.8 million, or $0.02 per share in the same period last year.
The company ended the quarter with cash and cash equivalents of $1.7 million, compared to $10.1 million at the end of the third quarter in 2018.
No, that doesn’t sound like a lot of money, but the company has $9.5 million in commitments to fully fund its strategic plan through 2020. Of that total, $5.5 million comes as loan from Trichome Financial Corp and $4.0 million of equity from Alumina Partners LLC. (Source: “MYM Announces Commitments to Fully Fund its Strategic Plan Through 2020,” MYM Nutraceuticals Inc, June 11, 2019.)
As part of the company’s strategic plan, it expects to cultivate over five-million pounds of hemp biomass, which is expected to generate 240,000 pounds of CBD isolate. Which, the CEO of Trichome believes, will help “deliver extremely attractive returns.”
Further, on July 5, the company announced $6.0 million in a non-brokered private placement at a price of CA$0.324.
With marijuana stocks pulling back, investors can now take their time to conduct some due diligence and find the cannabis stock that best suits their investing strategy.
MYMMF stock has been battered since the start of 2018, but thanks to recent developments, it has great near and long-term growth potential.