Why be bullish on marijuana stocks? Besides the obvious opportunity to get involved in an industry that has truly just begun to develop, there are companies in the market that have been methodically carving their own market niche. Companies like GW Pharma and Insys have recognized the opportunity that cannabis presents within the biotech space, and now several companies are working to establish a market leading position within traditional medical marijuana.
Where many marijuana stock plays tend to be more short term, there’s no denying that a buy and hold strategy can pay off when looking at companies holding a good mix of the right fundamentals, a clear development plan, and a solid investor base to build from.
We don’t stand behind EVERY marijuana stock as a “long” because the truth is that most of them aren’t. But when you find something during its infancy that’s just beginning to build, it’s important to pay close attention. The handful of “longs” that we’ve called out have all gone on to post significant gains over several months. One of last year’s “long” calls was CannaGrow Holdings Inc. (CGRW). At the time we called it out in mid-late October, we said we thought it would fit the mold of a strong candidate for “buy and hold” potential. Clearly a multi month move from $0.04 to highs of $1.05 suggests that we were on the money with the first run, but where many stocks that have such massive runs tend to fall apart, CGRW has maintained a relatively high level of support compared to where it was trading in October.
We wanted to take a moment to reiterate that we’re still bullish on CannaGrow for many reasons and we remind you of this now because the company is head and shoulders above where it was last year, from a growth stand-point. Just from the most recent announcements, the Company has laid out a clear play by play since initiating plans for their Buffalo Ranch facility.
But why is this so much of a focus? Simply put, if you had a shot at GWPH or INSY before they posted trial results and positive corporate updates, would you have been scrambling for a seat at the table and would you have had the foresight to find an opportunity to take advantage of the dips these two stocks had during their current bull runs? If you have bought and held winning stocks before, you know why it’s important to be early and ready to ride out any small storms along the way toward a much bigger gain. The fact is, CGRW has proven to be capable of such a run (last year $0.04 to $1.05) and now the company is on the verge of finally breaking ground on what could prove to be Colorado’s premier growing facility.
Medical marijuana has taken more of a focus for America’s favor of legalization and it just so happens that greenhouse growing produces more of the resins needed in formulating quality extracts. States like New York and Illinois for example only permit the use of a non-smoke based form of medical use. Over $118million worth of marijuana have already been sold in Colorado during the first quarter of 2015 and the market continues to grow month over month according to sales data. Green house growing is preferred when it comes to extracting the most resin from the cannabis plant and the trend to grow weed in greenhouses has come at a time that warehouse space is becoming more expensive and difficult to find. Since voters approved legalizing marijuana for recreational use in 2012, growers have absorbed more than 1 million square feet of industrial space, according to the industrial Market Trends report by Newmark Grubb Knight Frank. The total space occupied by the industry is more than 4 million square feet.
The benefits of working with CannaGrow from the perspective of a company like NuGro is that they have someone like Dr. John P. Janovec on board to help with the design and cultivation logistics for a successful growing environment. Dr. Janovec has more than twenty years of experience in the areas of research & development involving botanical and horticultural sciences and has served as the lead investigator of numerous scientific projects supported by governmental agencies, private and non-profit organizations, and private donors.
This isn’t about hyping anything. The direction of the market is leaning toward more of a medical basis (for now) and we feel that those companies that can achieve a leading roll early will most likely have the greatest potential of capitalizing. Realistically the last thing the company has to do is finally break ground on the Buffalo Ranch site. The Company that CannaGrow is acting as liaison for, NuGro Industries, has obtained a Conditional Use Permit for the land and has also been granted a Land Use Application, which will put things in motion, a lot more quickly.
The final steps to this have to do with CannaGrow’s ability to finalize the Bennett Roadway improvements and in a recent PR, management stated that Butte Valley Construction LLC is accomplishing this efficiently and is on schedule to be completed by the end of June, barring any inclement weather. On top of this, CannaGrow has engaged Latcon Corp., a licensed general contractor, for the day-to-day oversight of the various trade subcontractors, for services like HVAC, Mechanical, Electrical, Plumbing, Security Systems, Site Grading, and Concrete Foundations.
Once construction documents have been submitted to the County and the contingent requirements have been satisfactorily completed, Latcon can then apply for the various construction-building permits to be issued which will allow construction activities to begin on Lot 61. So it’s becoming more evident that CannaGrow’s current project is on the verge of breaking ground and we want to be there when it happens.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
