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Technical 420

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Michael Berger is the President and Founder of Technical420, an online research firm for marijuana stocks. Michael has been following the cannabis industry since 2012 and has been investing in the stock market for the last seven years. Michael worked for Raymond James Financial Inc. in multiple capacities over the last three years before he decided to quit his job in the Equity Research department to start Technical420. Michael has developed his own proprietary analytics program that merges Technical, Fundamental and Momentum data to yield the most comprehensive analysis possible. Michael utilizes a specialty terminal service provided by Thomson Reuters that sends real time company quotes, news and financials to ensure that his analysis is accurate and up to date.

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Before the market closed yesterday, shares of Emblem Corp. (EMC.V) (EMMBF) were halted at the request of the company.

The halt was due to the announcement of an engagement letter with PI Financial on behalf of a syndicate of underwriters that includes Canaccord Genuity and GMP Securities.

The syndicate agreed to purchase 2,754,821 special warrants at a price of $3.63 for $10 million in aggregate gross proceeds and the offering is expected to close on January 26th. Emblem also granted the underwriters an option to purchase up to an additional 15% of special warrants.

Terms of the Raise

The holders will receive one unit for each special warrant held. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each warrant allows the holder to purchase one share at $4.75 for a period of 36 months from the closing date.

The warrants are subject to an accelerated expiry date if the volume weighted average trading price is greater than or equal to $7 over a period of 10 consecutive trading days.

Use of Proceeds

Emblem intends to use the proceeds to fund the planned expansion of its facility and for general corporate purposes. The company plans to build a 2,500 square-foot extraction and formulation development laboratory on its existing property.

Emblem also hired a team of scientists to focus exclusively on the development and manufacture of advanced dosage forms of cannabinoid medication. With this capital, Emblem will be able to bring several pharmaceutical formulations to market in a much shorter period of time.

In July, Emblem purchased state-of-the-art oil extraction equipment and the company has invested more than $1 million into this division. Demand for cannabis oils, especially high CBD oil, continues to increase and this is an area we expect to see Emblem capitalize on after Health Canada issued the company a cannabis oils license in December.

Increased Institutional Focus

Since inception, Emblem has been dedicated to its existing shareholder base and 92% of all funds raised have been from retail investors.

Emblem was one of the most highly anticipated and most successful initial public offerings in 2016 and institutional investors have taken notice of this. These firms want to help Emblem advance its business plan, specifically in regard to its pharmaceutical division.

Emblem’s pharmaceutical division is led by one of the top pharmaceutical executives in the world, John Stewart. Stewart has over 30 years experience developing and commercializing pharmaceutical products. He has launched 11 new products, including OxyContin, and was the worldwide President and CEO of Purdue Pharma, the largest privately held pharmaceutical company in the world.

In the second quarter of 2017, Stewart plans to lead the launch of cannabinoid-based medications in customary pharmaceutical dosage forms such as liquids, gel caps, oral sprays, and inhalers.

Interested Investors Need to Act Fast

Although this offering is primarily for financial institutions and will most likely be significantly over-subscribed, Emblem has made a limited number of units available to retail investors through a Presidents list.

If you are interested in participating in this offering, please contact us as soon as possible and we will connect you to the Emblem team or email dannybrody@emblemcorp.com

Join Technical420 and Capitalize on the Rapidly Growing Cannabis Industry…

Important Investor Disclosures

Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report

Authored by: Michael Berger

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Canabo Medical closed an $8.4 million financing agreement at a more than 60% premium to yesterday’s closing price with Canadian licensed medical cannabis producer Aphria.

Canabo Medical owns and operates CMC Clinics, the largest chain of medical cannabis clinics in Canada. The company trades in both the U.S and Canadian stock markets under the symbols CMM.V and CAMDF, respectively.

Aphria Inc. (APH.V) (APHQF) purchased 6 million shares of CMM.V at $1.40 a share and CMM.V closed at $0.86 yesterday. Aphria now owns approximately 16.6% of Canabo’s total issued and outstanding common shares (on an undiluted basis) and we are favorable on this strategic investor.

An Execution Story

Earlier this month, Canabo announced a letter of intent with Peak Medical Group. Under the agreement, Peak will provide clinic space and physicians to assess up to 20,000 new patients under Canabo’s medical marijuana assessment, prescribing, educational procedures and protocols.

Peak Medical Group immediately began to provide training for up to 60 physicians and educators in Canabo’s proprietary training protocols with all resulting patients under this agreement to be enrolled in Canabo’s medical data collection program.

Conducting a Study on 7,500 Patients

When Canabo first announced Aphria’s investment, the company also announced plans to complete a 7,500 patient observational study with Andrew Davis, Ph.D., of Acadia University in 2017.

The study is expected to publish its initial results in late 2017 and complete study findings in 2018. The study will focus on correlations within the patient database in three specific areas:

The relation of opioid use following therapies by condition and patient category
The relation of benzodiazepines use following therapies by condition and patient category
The change in quality of life measurements following therapies by condition and patient category
An Attractive Opportunity

Canabo benefits from having three primary revenue streams: physician consultations, database subscriptions and independent medical evaluation consulting.

We continue to remain favorable on Canabo and expect to see a favorable reaction from the market today. From a valuation standpoint, Canabo is an attractive opportunity and today’s developments further strengthen our opinion on the company.

Important Investor Disclosures

Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report

Authored By: Michael Berger

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Although the North American cannabis industry has remained under pressure this month we are keeping a close eye on trading activity after the industry bounced well off its lows yesterday.

According to The Marijuana Index, during the course of this month the Canadian cannabis sector has significantly underperformed the United States cannabis sector. This is a significant change from November and we continue to closely monitor this trend.

Since the beginning of the month, the Canadian index and United States index have fallen15.2% and 9.6%, respectively. In November, the Canadian index moved approximately 20% higher while the United States index plunged more than 25%.

Weakness Creates Opportunity

Although a Canadian federal task force issued favorable recreational cannabis recommendations last week, stocks levered to this development have continued to move lower after the market initially responded favorably.

The United States cannabis industry has been under pressure since early November and this weakness has come despite favorable state-wide election results. We believe that a lot of this pressure has been the result of President-elect Donald Trump’s cabinet nominations and that much of this weakness is overdone.

Investors looking for a new growth opportunity should take advantage of the recent weakness within the North American cannabis industry and focus on companies that will see remarkable growth for years to come.

We want to recap some of the significant price movements as well as some of the companies that after this recent weakness represent attractive investment opportunities.

Licensed Organic Cannabis Producer Trading at a Discount

The increased selling pressure within the Canadian cannabis industry has created several attractive investment opportunities for growth investors and this weakness has made us increasingly more favorable on one company in particular.

OrganiGram Holdings (OGI.V) (OGRMF) is undoubtedly one of the best licensed producers of medical cannabis. Organigram has been able to differentiate itself from the competition through the following:

1) It is the only fully licensed producer that is east of Quebec with bilingual branding and services, 2) The company has been selling a certified organic product since October 2014, 3) It entered into a production and distribution agreements with The Green Solution and NectarBee as well as a licensing agreement with the Trailer Park Boys , 4) The company recently completed the acquisition of a property adjacent to its existing facility and announced a fully funded expansion that will increase its annual production capacity to 26,000 kilograms.

The difference between organically grown cannabis and synthetically grown cannabis is not merely due to the use of particular fertilizers and nutrients. Organic cannabis sells for a premium more on account of the longer grow process and smaller-on-average plant yields.

In order to be considered an organic grower, you need to have a certified facility, a certified property, a certified standard operating procedure (SOP), and to be considered certified organic each ingredient (from soil to fertilizers) must meet certification standards. All nutrients and pesticides used must be of natural origin. Some of the benefits include:

The growing process does not include any synthetic nutrients, pesticides, herbicides or additives
It promotes healthy growing through the use of beneficial organisms
The growing process is biodegradable and has no negative impact on the environment
Results in the plants having higher terpene levels
Although it is harder to grow organic cannabis, there is a reason why it sells for a premium and is typically sold out. Companies like Organigram that sell organic cannabis are usually sold out of their product and cannot seem to grow enough product as demand remains at very elevated levels.

Organigram will soon be able to meet some of the increased demand. The company’s fully funded expansion will increase its annual production capacity to 26,000 kilograms.

We continue to remain favorable on OrganiGram as it possesses several traits that make it an attractive investment. The company sells a premium organic product that continues to see revenue growth and margin expansion, it has established products lines that have strong brand recognition and it has significant expansion opportunities that can be self-funded on account of the company’s solid balance sheet.

Medicine Man Signs 20+ New Clients in 2016

One company we continue to remain favorable on is Medicine Man Technologies (MDCL). The company released an update late last week and Medicine Man said it will end the year with at least 23 new clients in eight states including clients in California, Oregon, Maryland, Pennsylvania, Arkansas, Colorado, Florida, and Puerto Rico.

Of the 23 new clients, 12 were signed during the fourth quarter and the company continues to increase its market share, improve its geographic diversity and expand its relationships and influence in the industry.

Medicine Man is pursuing strategic acquisitions that will allow it to offer additional products and services to clients as it continues to work toward completion of the acquisitions of Pono Publications and Success Nutrients.

We remain favorable on MDCL and view the company as a long-term investment opportunity for the following reasons: 1) Medicine Man is led by a management team with a proven track record, 2) The company continues to execute on its business initiatives and secure new clients around the country, 3) It has a strong parent company, and 4) We expect to see significant growth over the next 12-24 months.

Social Media Cannabis Business Announces Major Acquisition

The market has responded favorably to MassRoots’ (MSRT) acquisition of Whaxy and Cannabuild and the shares have rallied more than 7% since then.

We continue to remain favorable on MassRoots and believe that this acquisition will enable the company to improve and enhance its social media platform. Once the acquisition is completed, MassRoots will be able to offer a full suite of dispensary software solutions (online ordering, marketing and real-time inventory management) to cannabis businesses.

Whaxy’s platform seamlessly integrates with nearly every major point-of-sale system used by dispensaries and will readily connect to the MassRoots network allowing for live pricing, online ordering and product feedback. Since launching in May 2016, Whaxy’s menu management and online ordering platform for licensed cannabis businesses has processed over $5 million worth of business through 40,000 unique transactions.

This announcement came shortly after MassRoots reported that MJ Freeway’s API will power live menu pricing for its dispensary clients. MJ Freeway is one of the leading point-of-sale and compliance management platforms focused on the cannabis industry. This partnership will enable seamless communications between MJ Freeway’s thousands of dispensary clients and MassRoots’ community of cannabis consumers.

MassRoots is one of the largest and most active technology platforms for cannabis consumers, businesses and activists. This social network formed in April of 2013 as an online community for people who smoke cannabis but has since evolved into much more. We continue to remain favorable on MassRoots and view the company as an attractive ancillary investment opportunity.

Kush Bottles Bounces Off its Lows and We Remain Favorable

One cannabis stock that has bounced well off its monthly lows is Kush Bottles (KSHB) and we continue to remain favorable on the shares after they moved 3% lower yesterday.

KSHB has rallied more than 18% off its lows on December 14th and the shares are trading right below the $3 level. Although we view the shares as fairly valued at current levels, we consider KSHB to be one of the highest quality OTC cannabis stocks and view the company as a long-term investment.

Kush Bottles is trading right below the $3 price target issued by Cowen and Company in mid-September. The analyst assigned the shares a Buy rating and a $3 price target because of its unique exposure to the high growth emerging cannabis industry.

The company offers several child resistant and non-child resistant exit bag solutions, all of which are fully customizable, allowing Kush Bottles’ customers the opportunity to creatively market and brand themselves. We find this aspect of its offering to be extremely important as companies compete to become a recognized brand amongst consumers.

We are favorable on Kush Bottles due to the product it provides, its geographic diversity, its growth potential following positive state-wide election results, and its continued execution.

Important Investor Disclosures

Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report

 

Authored by: Michael Berger

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Despite favorable state-wide election results, concerns among cannabis investors have increased and cannabis stocks continue to move lower following an overextended industry wide rally as well as highly questionable cabinet nominations by president elect Donald Trump.

Although the recent downward trend is concerning, this weakness has created an opportunity for investors to purchase high quality cannabis investments at a considerable discount.

Today, we want to take the time to highlight three recent trends and price movements that investors should be aware of.

Kush Bottles Falls Almost 20% from Last Week’s High

Kush Bottles (KSHB) has fallen more than 18% from its highs on Tuesday and the shares are now trading below the $3 price target issued by Cowen and Company in mid-September. The analyst assigned the shares a Buy rating and a $3 price target because of its unique exposure to the high growth, emerging cannabis industry.

This correction has created a great opportunity for investors as consider Kush Bottles to be one of the best cannabis investment opportunities. We are favorable on Kush Bottles due to the product it provides, its geographic diversity, its growth potential following positive state-wide election results and its continued execution.

The company offers several child resistant and non-child resistant exit bag solutions, all of which are fully customizable, allowing Kush Bottles’ customers the opportunity to creatively market and brand themselves. We find this aspect of its offering to be extremely important as companies compete to become a recognized brand amongst consumers.

Zynerba Fall More than 12% from Friday’s Highs

Zynerba Pharmaceuticals (ZYNE) fell approximately 3% yesterday and we are monitoring ZYNE closely as the shares are down almost 12% from its highs on Friday. This move lower has caused momentum to plunge and we remain favorable on ZYNE at current levels.

Investors should take note of Zynerba’s recent correction since it has followed a more than 15% rally so far this month. We consider Zynerba to be one of the top biotech cannabis investment opportunities due to:

1) its product pipeline, which will create catalysts for the shares over the next few years, 2) its attractive size (from a market cap standpoint) as it is a takeout candidate for a larger pharmaceutical company looking to enter the cannabis sector, and 3) its attractive valuation as the shares come down from recent highs.

Canadian Licensed Medical Cannabis Producers Bounce Back

Although yesterday’s trading activity within the cannabis sector was mixed, certain sub-sectors performed better than other and we are monitoring this activity closely. Canadian licensed medical cannabis producers saw strength yesterday and each member of the Big Five (Canopy Growth, OrganiGram, Aphria, Aurora, and Mettrum) ended the day in positive territory.

Yesterday, Emblem Corp (EMC.V) lived up to the hype during its initial public offering as trading activity exceeded our already high expectations. Emblem is a licensed medical cannabis producer in Canada uniquely positioned within the rapidly growing medical and recreational cannabis industry.

We are favorable on Emblem for the following reasons: 1) The company operates three distinct divisions which can create value for each other, 2) Its initial public offering saw remarkably high interest from the marketplace, 3) Its Emblem Cannabis division started selling medical cannabis in August and we expect to see continued growth on a month-over-month basis, and 4) It is led by a management team that has a proven track record of building successful multi-billion dollar companies.

Important Investor Disclosures

Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report

Authored By: Michael Berger

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Activity within the Canadian cannabis industry has picked up over the last two weeks and we believe this is just beginning as the month of December has been highlighted by increased M&A activity, company funding agreements and new investment opportunities.

One of the most highly anticipated initial public offerings (IPO) will take place today as Emblem Corp is set to commence trading on the TSX Venture Exchange this morning under the symbol EMC.V.

Emblem is a licensed medical cannabis producer in Canada uniquely positioned within the rapidly growing medical and recreational cannabis industry.

An Attractive Cannabis and Biotech Investment

We are favorable on Emblem for the following reasons: 1) The company operates three distinct divisions which can create value for each other, 2) It recently completed a capital raise that was oversubscribed and the company has seen remarkably high interest from the marketplace, 3) Its Emblem Cannabis division started selling medical cannabis in August and we expect to see continued growth on a month-over-month basis, 4) It is led by a management team that has a proven track record of building successful multi-billion dollar companies, and 5) Its current valuation is attractive as we expect to see incremental growth on a year-over-year basis.

Emblem’s pharmaceutical efforts are led by President John Stewart who will lead the launch of cannabinoid-based medications in customary pharmaceutical dosage forms such as liquids, gel caps, oral sprays, and inhalers. Stewart has launched 11 new products, including OxyContin and was previously the CEO of Purdue Pharma, the largest privately held pharmaceutical company in the world.

By using a more natural cannabis extract, Stewart is trying to create safe standardized dosage medication in pill form. The development of a product like this would allow Emblem to compete in the global pain and sleep market, the largest pharmaceutical markets in the world.

An Attractive Management Team and Valuation

Emblem is led by its founders and a management team with a proven track record of success. Since inception, management has invested over $6 million and executed on its plan to build a state-of-the-art facility that produces world class products.

The company’s flawless execution and excellent capital structure (includes over 1,000 shareholders) makes Emblem incredibly attractive to the capital markets.

Its pre-IPO valuation is $63 million ($90 million on a fully diluted basis) which is very attractive as it is significantly lower than other licensed medical cannabis producers in Canada.

We expect Emblem to see rapid growth on account of its unique three-pronged approach: dedicated to the production of premium quality cannabis, patient and physician education creating easy access and a pharmaceutical approach that is second to none.

Canadian Broker-Dealer Releases Report on Emblem

PI Financial released a report on Emblem that provides insight to the business. The analyst, Jason Zandberg, issued the company a Buy rating and a $3.25 price target within the first 12 months.

Zandberg said, “Emblem has a number of things in its favor, including a strong management team, a state-of-the-art facility in Ontario, a solid patient onboarding strategy, and a pharmacy background, which he thinks will prove to be important because he expects pharmacies will ultimately act as distribution points for marijuana.”

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Authored By: Michael Berger

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    In less than two weeks, the cannabis industry will take a significant step forward as nine states vote on legal cannabis ballot initiatives. Of those nine states, none are more significant than California which is poised to expand the legal recreational marijuana market to almost a quarter of the American population.

    We expect to see Proposition 64 which would legalize recreational cannabis in California pass as polls continue to show strong support. The passage of this ballot initiative would not only have a significant impact on the landscape of the legal cannabis industry but would also serve as a major catalyst to California-based cannabis businesses.

    The Fastest Growing Industry in the World

    In 2015, California accounted for $2.7 billion in sales of medical cannabis product. If Proposition 64 passes, the medical and recreational cannabis market should be a $6.5 billion industry by 2020. The Guardian expects to see $1.6 billion in sales of recreational cannabis products in the first year of legalization.

    From an investor standpoint, there are several ways to capitalize on this opportunity but the best and easiest avenue is through investing in publicly traded companies. Although the cannabis sector continues to fly high, we believe that several high-quality publicly traded cannabis companies are still flying under the radar.

    One such company is Finore Mining Inc. (FIN: CSE) (FNREF: OTC), which is levered to the California cannabis industry following its acquisition of KushTown USA LLC, a California based cannabis infused products company that is a leader in the cannabis beverage industry.

    Levered to the California Cannabis Industry

    Finore entered into an agreement for the acquisition of KushTown on late Thursday and the market responded very favorably, sending FIN and FNREF 23% and 103% higher.

    KushTown specializes in medicated water, soda, hot sauce, and barbecue sauce products infused with cannabis. The company offers 20 different varieties of medicated sodas on its website and its mission is to become an integrated cannabis brand across all of North America as deregulation measures continue to open new markets.

    KushTown has a proven track record of success and has been selling cannabis infused products since 2008. The company’s products are sold in more than 500 dispensaries across California. The company is focused on penetrating new markets within California as demand for cannabis infused products continues to grow.

    KushTown was founded by Peter Moret in 1999 after his mother was diagnosed with breast cancer. Peter successfully created a medical cannabis tincture that he gave to his mother in tea and it improved her appetite, made her more active, and made it easier for her to deal with cancer related pain. In the following year Peter’s mother won her battle against cancer. The decision was then made to manufacture and distribute the tincture called KushTown.

    Product Expansion Should Significantly Increase Market Penetration

    Over the next two years, KushTown plans to expand its product line to include mints, sublingual strips, fudge bars, capsules, chocolate truffles, and oil cartridges for vaporizer pens.

    KushTown plans to become a vertically integrated cannabis company across the United States and it is focused on controlling the entire cultivation process, from seed-to-sale, which will provide increased transparency and visibility into the product quality and integrity.

    Not only does vertical integration improve transparency but it will also have a significant impact on margins and will improve the company’s bottom line through economies of scale.

    Focused on Growth

    KushTown plans to expand through strategic partnerships and is actively seeking partners to license its brand in states where medical and recreational cannabis is legal.

    KushTown is also focused on expanding through acquisitions as well as license applications in states with a legal recreational market and states that are preparing to legalize recreational cannabis. The company plans to roll out a national branding and marketing strategy across all of its product lines while expanding into new state markets.

    Aside from the 500+ dispensaries selling KushTown’s products, several California-based delivery services distribute its products to clients across the state. The company is currently building an e-commerce platform that will lead to increased revenue opportunities as it will allow for direct sales to distributors and consumers.

    Attractive Opportunity Due to Upcoming Catalysts and Recent Acquisition

    Although the shares are trading near its 52-week high, we are favorable on Finore due to the following reasons: 1) Through KushTown, the company is levered to the California cannabis industry which is poised to see massive growth on a year-over-year basis, 2) The company has a proven track record of sales and it has an extensive product line that is in high demand, 3) Cannabis infused products represent a huge part of the legal cannabis industry and it continues to see strong growth, 4) The company is led by a management team with a proven track record of success, and 5) It is levered to the results of the election and market sentiment which should cause its shares to move significantly higher if recreational cannabis is legalized in California.

     

    Authored By: Michael Berger

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    With the presidential election right around the corner and a record number of states voting on legal cannabis ballot initiatives, 2016 will be a banner year for the cannabis industry.

    We believe that the 2016 election will be a watershed moment for the cannabis industry as states like California and Florida vote to expand existing cannabis programs. California will vote on recreational cannabis and Florida will vote on medical cannabis. These two states could have a significant impact on the legal cannabis industry.

    Democratic presidential candidate Hilary Clinton is considerably ahead of Republican presidential candidate Donald Trump in the polls and has repeatedly said that she would like to re-categorize cannabis from a Schedule 1 to a Schedule 2 substance so that researchers can better investigate its uses and limitations.

    Top Five Pre-Election Cannabis Stocks

    Although the legal cannabis industry has gained a lot of ground in the last two years we are still in the first inning of a multi-decade growth cycle. From an investor standpoint, there are several ways to capitalize on this opportunity but the best and easiest avenue is through investing in publicly traded companies.

    Although many cannabis stocks have already had remarkable rallies, we think this is just the beginning and want to highlight five stocks that we expect to benefit from the election:

    Medicine Man Technologies (MDCL) provides cultivation consulting services focused on cannabis growing technologies and methodologies. Medicine Man has clients in Arizona, California, Florida, Maryland, Nevada, Oregon, Ohio, Oklahoma, Ohio, Pennsylvania, Texas, and Puerto Rico. We have been favorable on the company as it would directly benefit from a positive election result.

    American Cannabis Company (AMMJ) provides advisory and consulting services for cannabis businesses in the United States and Canada. American Cannabis generates revenue from the sales of products used in the cultivation, processing, and sale of cannabis. The company also generates revenue through its consulting clients across the country. American Cannabis is levered to the election via its consulting clients as well as its product business.

    MassRoots (MSRT) has been called the Instagram of the cannabis industry and its mobile app can be downloaded only in states where medical cannabis is legal. The election is a significant event for MassRoots because a successful outcome would enable the company to reach more users and businesses in states that pass cannabis ballot initiatives.

    GW Pharmaceuticals (GWPH) is the bellwether of the cannabis industry and tends to benefit from any positive development in the cannabis industry. We continue to view GW Pharmaceutical as the best long-term cannabis investment due to its deep pipeline of products, its successful FDA testing results, its Wall Street coverage, and its valuation as its shares are trading well below the average Wall Street price target.

    Kush Bottles (KSHB) is focused on providing exit bag products that are in compliance with regulations. We see a lot of opportunity for growth as new state markets open and existing markets develop. We are favorable on Kush Bottles due to the product it provides, its geographic diversity and its continued execution.

    Authored By: Michael Berger

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    marijuana

    Cannabis stocks continue to run higher and this rally has shown no signs of stopping with the election less than a month away.

    Legal cannabis is coming and the election will be one of the most significant event-driven catalysts for cannabis stocks as a record number of states are voting on some form of legal cannabis.

    With California voting on legal recreational marijuana and a legal medical marijuana initiative on the ballot in Florida, the elections represent a watershed moment for the cannabis industry.

    Cannabis Ballot Initiatives Ahead in the Polls

    Not only are a record number of states voting on legal cannabis, but the polls show that legal cannabis is leading in every state where there is such an initiative on the ballot.

    The legal cannabis industry has gained a lot of ground in the last two years but we are still in the first inning of a multi-decade growth cycle.

    The cannabis industry is the fastest growing industry in the world and Wall Street has taken notice of this. We believe that the elections will be the tipping point for the cannabis industry and if cannabis is legalized in California (recreationally) and Florida, we expect to see a lot more money from Wall Street enter the sector.

    How to Capitalize on the Cannabis Movement

    From an investor standpoint, there are several ways to capitalize on this opportunity but the best and easiest avenue is through investing in publicly traded companies.

    Although many cannabis stocks have already had remarkable rallies, we think this is just the beginning and we continue to see value in many cannabis stocks. Some stocks you should keep an eye on include:

    GW Pharmaceuticals (GWPH): Continues to be our favorite investment in the cannabis sector and we are even more favorable on GWPH after Goldman Sachs initiated coverage with a Buy rating and $189 price target. GW Pharma has the most Wall Street coverage in the cannabis sector, it has the best pipeline of prodcuts, and it continues execute and delivery value to its shareholders.

    Canopy Growth Corp (CGC) (TWMJF): We are favorable on Canopy Growth due to the following reasons: 1) its leading Canadian market share, 2) its management, which continues to execute on initiatives and create value for shareholders, 3) its partnerships and recent acquisitions, and 4) its growth potential. We are also favorable on

    MassRoots (MSRT): The shares have rallied more than 66% since September 30th, which was when MSRT traded at a new all-time low of $0.38. Technical420 remains favorable on MSRT at current levels and our investment thesis is based off the company being able to grow revenues while keeping its costs the same. We expect to the company to issue an update highlighting its recent improvements from a fundamental standpoint soon and we see upside to current levels.

    Authored By: Michael Berger

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    Although the United States cannabis industry offers investors a lot of upside, it offers even more risk as a majority of the companies are fraudulent. Many of the cannabis companies that trade on the OTC exchange are led by management teams focused on creating value for themselves, and rely on the sale of stock to stay in business. Canada Remains a Bright Spot of the Industry

    The Canadian medical cannabis industry continues to be a bright spot in the cannabis sector as its constituents are led by management teams that continue to execute on business initiatives and create value for shareholders. One the biggest developments in 2015 was the victory by Justin Trudeau and the Liberal Party in the Canadian general election.

    The outcome of the campaign was a huge victory for the Canadian cannabis industry and will serve as a catalyst for stocks levered to this industry. Justin Trudeau and the Liberal Party have said they will make cannabis legalization a priority.

    A Growing Program

    In 2014, Canada created a federal medical cannabis program called Marihuana for Medical Purposes Regulations (MMPR). The program has enabled the country to move from a system that allowed patients to buy from a single government‐approved grower or to either grow their own or purchase from non‐commercial growers, to a system of multiple commercial providers. The Canadian medical cannabis industry is growing at an impressive 10% per month and it now has more than 75,000 patients. There are currently 31 federally licensed medical cannabis producers in Canada under Health Canada’s MMPR.

    Catalysts Ahead

    Canada has announced plans to legalize recreational cannabis in spring 2017. Before recreational cannabis is legalized, we expect to see consolidation within the industry.

    The government’s plan to legalize cannabis has made several licensed medical cannabis producers attractive investment opportunities to institutional investors, hedge funds, and investments, banks. Licensed medical cannabis producers have raised more than $50 million so far this year and we expect this number to increase exponentially during the back half of the year.

    This has made capital much easier to access, which has supported growth initiatives like land acquisitions, construction costs, license/company acquisitions, production capacity increases, etc. The number of investments like this have increased significantly this year as licensed producers prepare for an extended period of accelerated growth following these various event-driven catalysts.

    Authored By: Michael Berger

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    Marijuana retailers preparing for this holiday

    In less than one week, Colorado recreational marijuana users will celebrate a holiday that might even be better than April 20th. This is due to Colorado’s tax law which forces the state to suspend taxes on recreational marijuana for one day.

    Colorado has frequently rejected sales-tax holidays on things like school supplies, clothing or energy-efficient appliances and this is very unusual for the state. Colorado state officials expect this holiday to cost the state around $3 to $4 million!

    This holiday will save recreational marijuana users approximately $20 to $40 per ounce, but it is not completely tax free. A 2.9% sales tax still applies to marijuana purchases but that is nothing compared to the normal tax rate.

    How much is too much

    Dispensary owners are stocking up their inventory to prepare for huge crowds. Many dispensary owners had to speak with their attorneys to make sure this was real because it is very unusual for Colorado.

    Marijuana retailers will need to be careful with how they prepare for this holiday. Although owners expect huge demand, if they stock up too much and do not sell all inventory they will not be entitled to the one-day waiver on the 15% excise tax they pay wholesalers.

    An industry in its infancy

    The Colorado cannabis industry is in its infancy. The industry is in the first inning of what will be a multi decade growth cycle. Colorado has seen a significant increase in the amount of marijuana taxes collected during 2015. The state has generated over $60 million in tax revenue during the first half of the year, more than double what they collected during the same period last year.

    The increase in tax revenue can be attributed to increased number of dispensaries in Colorado. The state now has 380 recreational marijuana dispensaries and 480 licensed recreational marijuana cultivators.

    Outlook

    In November, Colorado voters will decide if they should keep the $58 million in taxes from recreational marijuana last year. If voters vote against this measure, sales taxes will drop from 10% to 0.1% for six months and around $20 million would go back to marijuana cultivators who paid it through excise taxes.

     

    Authored by: Michael Berger
    Michael Berger is the president and founder of Technical420, an independent research firm focused specifically on the cannabis sector. He was working for the equity research department at Raymond James Financial Inc., when he recognized a need for a service that provides up-to-date research and analysis on companies that operate in the cannabis industry. Mr. Berger studied finance and economics at Florida State University and is working toward achieving his CFA charter.

    Sincerely,

    Michael Berger

    Founder/President 

    Technical 420 LLC

    Original Article:

    https://technical420.com/cannabis-article/marijuana-retailers-preparing-holiday

    Michael Berger

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