WeedMD Inc: Small Cannabis Player With Massive Potential
WeedMD Inc (OTCMKTS:WDDMF, CVE:WMD) is an overlooked cannabis stock that has been bucking the trend.
Yes, the Horizons Marijuana Life Sciences ETF (OTCMKTS:HMLSF, TSE:HMMJ) is up 37% in 2019, but not all cannabis stocks are performing well.
In fact, some of the biggest names have been leaving marijuana investors exasperated. Tilray Inc (NASDAQ:TLRY) has lost 42% of its value in 2019, MedMen Enterprises Inc (OTCMKTS:MMNFF, CNSX:MMEN) has lost 22%, and Insys Therapeutics Inc (NASDAQ:INSY) has lost 77.5%.
WeedMD stock, meanwhile, has advanced 38.5% year-to-date, and for good reason: the company reported strong fourth-quarter and full-year 2018 financial results, it has a strong cash position, and it has multiple distribution channels.
WDDMF Inc Overview
WeedMD is a small cannabis player that could experience huge gains over the coming quarters.
The Toronto, Canada-based company produces and sells medical marijuana (including dried marijuana), cannabis oil, marijuana plants, and marijuana seeds throughout most of Canada. (Source: “Investor Presentation,” WeedMD Inc, last accessed May 30, 2019.)
The company is looking to expand globally and develop high-margin cannabis-infused products, including edibles, beverages, and concentrates.
The business has over 600,000 square feet of indoor greenhouse production and 110 acres of outdoor production.
The first harvest from its greenhouse was expected to begin in March 2019 and the first harvest from 27 acres of its outdoor cultivation is expected for the fall of 2019.
In the third quarter of 2019, WeedMD expects a license amendment to add an additional 308,000 square feet of traditional greenhouse space, helping the company reach its target of 50,000 kg (about 110,200 lb) of production by 2020. Its target for outdoor production is double that.
With the outdoor cultivation of cannabis, WeedMD expects its production costs to be among the lowest in the industry, which would more than likely boost the WDDMF stock price quite a bit.
Once the indoor and outdoor cultivation areas are fully realized in 2020, the consolidated production space will total 4.8 million square feet (112 acres).
The company’s numerous supply agreements include deals with the Ontario Cannabis Retail Corporation, the BC Liquor Distribution Branch, and Shoppers Drug Mart, Canada’s largest retail pharmacy chain.
Furthermore, WeedMD Inc is the only licensed marijuana producer to establish multiple preferred supplier agreements with long-term care facilities. It’s also the first to sell and export cannabis genetics to Australia and is one of the only companies to sell and export them to Israel.
|WDDMF Stock Information|
|Market Cap||$154.8 Million|
|Shares Outstanding||111.3 Million|
|50-Day Moving Average||$1.33|
|200-Day Moving Average||$1.25|
(Source: “WeedMD Inc. (WDDMF),” Yahoo! Finance, last accessed May 30, 2019.)
2018 Revenue Up 465%
On May 1, WeedMD announced that its full-year revenue, for the period ended December 31, 2018, soared 465% year-over-year to $8.2 million. (Source: “WeedMD Reports Fiscal Year 2018 Financial Results,” WeedMD Inc, May 1, 2019.)
Revenue growth came from increased medical cannabis sales, supply agreements for Canada’s recreational marijuana market, and the sale of wholesale cannabis and genetics to other licensed producers.
WeedMD reported a 2018 net comprehensive loss of $895,128, a significant improvement from its 2017 net comprehensive loss of $8.8 million. The company also reported an earnings loss per share of $0.01 in 2018, versus a loss of $0.15 per share in 2017.
WeedMD ended the year with a cash balance of $21.2 million.
All that should be good for the WeedMD stock price.
WeedMD Inc has been extremely busy over the last year and a half, with new brands, new partnerships, new suppliers, the shipping of its products internationally, and landmark agreements.
And there’s still the increased production that the company expects heading into 2020.
There’s a lot going on at WeedMD, and investors could start seeing really big results from WDDMF stock in the coming months.