Cannabis is an attractive sector for investors Funding
July 6, 2019
Cannabis business loan funding provided to business owner at the end of 2018, I had a burning desire to share useful information that I process in my professional life and experience that I have accumulated over 17 years of active work in finance and investment. As a result, I created a channel where I try to use accessible language to share valuable, in my humble opinion, information from the field of investments, IPO and shares of promising companies.
In this publication I will talk about the sector in which I sincerely believe and recommend investors to study – medical cannabis.
Cannabis expansion on the world stage
To begin with, recently the conquest of cannabis countries is taking place at an active pace. Canada, Thailand, USA, European countries. It is at least important to keep in mind, plunging into the topic.
It should be noted that the bill on agriculture, which includes the item on the legalization of industrial hemp, has become a serious step in the development of the industry in the USA. Canada, which is part of the G7 sector, shows an impressive increase in the production and sale of cannabis, constantly connecting new territories to the legaliz.
Analysts predict a serious growth in the market for medical cannabis to $ 80 billion in 2020 in the US alone. Now the shares of many manufacturers have adjusted after the crazy growth and are at an attractive level in terms of value. Investors have a good chance to enter company stocks.
Two interesting cannabis manufacturers
Of course, there are more of them, but today I’ll share two that I keep a close eye on. Weekly, new mergers and partnerships take place in the market, which, of course, affect the value of shares. Here are the two heroes of today’s publication.
Tilray (TLRY ticker)
Tilray is another manufacturer that has entered the US stock market. Tilray’s IPO caused a HYIP on the stock exchange, and the stock soared from $ 30 to $ 300. Cool, of course, but then the market put everything in its place, and a lot of disappointed people appeared: the shares dropped to $ 70 and later adjusted to $ 100. Serious zigzags for investors.
On December 18, Tilray (TLRY) announced a partnership with Sandoz, part of the pharmaceutical giant Novartis (NVS). In accordance with this transaction, which led to the strengthening of Tilray shares, Sandoz will market Tilray medical cannabis products. This is good, undoubtedly.
Four days later, Tilray again stirs the market and announces that it will work with Anheuser-Busch (BUD) to explore cannabis-rich beverages. Expanding the product line is good. But…
Tilray takes an interesting position. Unlike other major participants in the industry, Tilray is not interested in receiving investments, since it prefers to remain completely independent and concentrate management in its hands. Is this correct and will the company manage on its own?
I’m not just asking this question, there is a reason, and here it is. TLRY had operating losses of $ 34 million, with sales of $ 27.6 million in the first nine months of the fiscal year. Nervous rate. To take a place in the sun, the company needs deep pockets. But let’s be objective. Reputable partners Sandoz and Anheuser-Busch are clearly not fools to cooperate with an unprofitable company. Same fact.
Moreover, even such transactions will not be able to return the value of Tilray shares to three-digit numbers. But in fairness, I note that Gender is militant and optimistic. He claims that there will be three cannabis companies with an estimated $ 100 billion, and hopes that Tilray will be one of them. It also hopes to become one of three companies in the sector with annual sales of $ 50 billion.
I think this: Tilray’s strategy, on the one hand, is justified, that it does not sell a share at the development stage, planning to cost more, but on the other hand, it is quite risky, because in competition with those companies that have invested billions of investment funds, Tilray can to lose. Cannabis Deutschland is also going to available soon