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.”
Authored By: Michael Berger
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | email@example.com