Investing in the Emblem Cannabis IPO
Check Out This New Legal Marijuana IPO
Legal cannabis investors rejoiced last week after eight of nine ballot measures legalizing marijuana were approved.
From new medical cannabis programs that’ll soon be rolled out in Florida and Arkansas to new recreational marijuana programs in Maine and California, the cannabis industry in the U.S. is about to get another major shot of steroids.
Unfortunately, most investors have already missed the boat or, even worse, bought into the obligatory sell-off that typically comes with this kind of news. Buyer’s remorse is certainly a tough pill to swallow. But the reality is, despite the industry being white-hot at the moment, opportunities for retail investors are not only limited, but many are also incredibly risky.
If you were to take a few minutes to sift through all the public cannabis companies trading right now, you would find that nearly all are penny stocks trading over the counter. And of all those companies, maybe 3% actually have viable, revenue-generating businesses. But that still doesn’t mean they’re good investments.
And for the legal cannabis companies that are solid, moneymaking ventures, those stocks are trading at all-time highs, with some even starting to look a little top-heavy. That’s not to say you still can’t come out ahead with these stocks, but the big money’s already been made.
Take Canopy Growth Corporation (TSX: CGC), for instance.
Arguably the strongest legal cannabis company operating in Canada, CGC was trading for less than two bucks back in September 2015. Today, shares are going for more than $9.00. Check it out...
Or look at OrganiGram Holdings (TSX-V: OGI). This organic cannabis producer that’s pretty much locked down the Maritimes region has watched its stock launch from $0.25 a share back in October of last year to more than $3.00 a share today.
That's a gain of more than 1,100%!
While these companies are considered two of only a handful of major players in the space, there’s still only so much higher they can climb.
Bottom line: Investors who waited on the sidelines for the past two years have limited options when it comes to finding a solid legal cannabis play that’ll deliver the kinds of gains we’ve already seen with companies like Canopy Growth Corporation and OrganiGram. But that doesn’t mean they don’t exist.
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The Biggest Legal Cannabis IPO of the Year
In a couple weeks, investors will finally have a new legal cannabis stock to buy. And it’s one that I suspect will get a huge boost when it goes public.
The company is called Emblem Corp., and it could end up being the biggest legal cannabis IPO of the year.
Emblem is a licensed cannabis producer in Canada that was co-founded by John H. Stewart, the former President and CEO of Purdue Pharma. If you’re unfamiliar, Purdue Pharma is one of the largest privately held pharmaceutical companies in the world. It’s the maker of OxyContin, which generated $3 billion in revenues just a few years ago.
Emblem currently operates a state-of-the-art 23,500-square-foot facility that was licensed by the Canadian government last year. Production actually started in October. It has a total licensed land expansion capacity of 15,000 kg.
Here are some pictures from its manufacturing facility...
At the moment, Emblem is producing 500 kg. in two rooms, and it's got another 1,500 kg. (five rooms total) under construction.
Potential revenue from total production of these seven rooms is $11.25 million. With the full development of the 15,000 kg. expansion, you're looking at about $120 million in revenue at full production.
Of course, it should be noted that Emblem isn't growing cheap commodity cannabis. It's growing pharmaceutical-grade, which does command a premium.
Emblem’s also producing oils, and those projected operating margins look even better.
The target date for Emblem to go public is November 28. It will trade on the TSX Venture under the symbol “EMC” and is expected to debut between $1.60 and $2.00 a share.
Now, for the sake of full disclosure, I did get some members of my Green Chip Stocks investment community in this one earlier this year at a pre-IPO price of $0.50. They’ll likely be sitting on gains in excess of 220% the second this thing goes live.
That, dear reader, is how you build fortunes.
Of course, that deal closed months ago. So if you want in on Emblem, you’ll have to get it on the open market. But if you get in early enough, you should still do quite well.
That being said, if you’d prefer to get in on companies like this before they go public, you can sign up to become a member of Green Chip Stocks by clicking here.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially-responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.