Vapen MJ Ventures Corp: Why I’m Digging This New $1.33 Pot Stock

Vapen MJ Ventures Corp Why Investors May Like This $1.33 Pot Stock
iStock.com/LARISA SHPINEVA

A New Pot Stock to Think About

We often hear that cannabis is a new industry, but the reality is that most of the well-known pot stocks have been around for more than a year, some more than two years. We’ve seen their surging share prices and we’ve seen their downturns.

For those who got bored of seeing the familiar cannabis names mentioned in financial media over and over again, here’s a new pot stock to consider: Vapen MJ Ventures Corp (OTCMKTS:VAPNF, CNSX:VAPN).

Vapen MJ Ventures Corp is the company behind the “Vapen” brand. Through its wholly owned subsidiaries, Vapen MJ Ventures Corp utilizes a full vertical integration business model to oversee and executive all aspects of cultivation, extraction, manufacturing, retail dispensary, and wholesale distribution of cannabis and hemp products under the Vapen brand.

While the company is headquartered in Vancouver, British Columbia, Canada, its focus is on the U.S., particularly the state of Arizona. According to the company’s latest investor presentation, Vapen is a leading cannabis extracts brand in Arizona and is sold in most of the dispensaries across the state. (Source: “Investor Presentation 2019,” Vapen MJ Ventures Corp, last accessed August 22, 2019.)

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Vapen MJ Ventures Corp listed its shares on the Canadian Securities Exchange under the ticker symbol “VAPN” on May 13, 2019, so it is a very new name to the stock market. American investors interested in purchasing this pot stock can find it over the counter under the symbol “VAPNF.”

Vapen MJ Ventures Corp is Running a Fast-Growing Business

Still, despite being a new pot stock, Vapen MJ Ventures Corp has already been churning out some very impressive growth figures.

In 2017, the company generated $14.8 million in revenue and $6.1 million in earnings before interest, tax, depreciation, and amortization (EBITDA). In 2018, Vapen’s revenue grew to $18.5 million, while its EBITDA also improved, to $6.2 million. (Source: Ibid.)

The growth momentum is continuing at this newly listed pot stock. Vapen MJ Ventures Corp reported earnings last week. It showed that in the second quarter of 2019, the company’s gross revenue surged another 43% year-over-year to $6.7 million. (Source: “Vapen MJ Reports 43% Revenue Increase, 23% Increase in Net Income, for Second Quarter of 2019,” Vapen MJ Ventures Corp, August 21, 2019.)

The bottom line improved as well. In the second quarter, Vapen MJ’s net income came in at $1.2 million, up from the $1.0 million earned in the year-ago period.

Looking around, there are plenty of pot companies that are growing their revenues at a double-digit clip. However, not all of them can turn a profit at the bottom line. And that’s what makes VAPNF stock stand out: the company is not only running a profitable business but has also managed to grow its profit as time went by.

What’s also worth noting is the brand’s presence on social media. You see, due to the current regulatory environment, it’s very difficult for pot companies to use traditional advertising methods like cable TV, radio, and newspapers to promote their products. But Vapen MJ Ventures Corp has found a new method: social media.

The chart below compares the number of Instagram followers for some of the leading cannabis brands as of August 22, 2019. As you can see, despite being a small player in the cannabis industry, Vapen actually has quite a few more followers than some of the most established pot companies:

Number of Social Media Followers of Cannabis Brands

Source: Instagram

Now, keep in mind that Arizona currently represents the third-largest medical marijuana market in the U.S. and is expected to legalize recreational pot in 2020. Due to the Vapen brand’s entrenched position in Arizona, the company is well-positioned to capitalize on the state’s expected recreational marijuana boom.

Meanwhile, Vapen MJ Ventures Corp has plans to expand the brand’s presence across the U.S. In particular, the company is negotiating revenue and profit-sharing arrangements with license holders in California, Nevada, Oklahoma, Massachusetts, Ohio, Kentucky, Arkansas, and Hawaii.

Analyst Take

At the end of the day, we know that sentiment hasn’t exactly been bullish towards the cannabis industry in the second quarter of 2019, during which Vapen stock went public. Unsurprisingly, the company’s share price did not really shoot through the roof.

Still, VAPNF stock surged 11.3% in the trading session following its latest earnings report. If the company can keep up its growth momentum, VAPNF stock—which trades at $1.33 apiece—could see further upside.