Time to Invest in ABcann Global (TSX-V: ABCN)
ABcann Lands $30 Million from Cannabis Wheaton
Some said it would be the biggest legal cannabis IPO of the year.
ABcann Global (TSX-V: ABCN) debuted at $1.50
Today it trades for about a buck
But don’t get too preoccupied with the company’s debut on the TSX Venture. It’s somewhat irrelevant.
While the timing wasn’t particularly perfect, as cannabis stocks were actually selling off when ABcann went public, the company is one of the strongest in the space. It’s actually a bit undervalued at the moment.
In fact, the good folks over at Cannabis Wheaton recently announced they will subscribe for $15 million of ABcann common shares at a valuation of $2.25 per share. That’s one heck of a premium to the current market price, which tells me that ABcann may have a lot more value than the market is giving it credit for.
If you’re unfamiliar with ABcann, here’s what I wrote about the company before it went public ...
ABcann currently has a fully-operational 14,500 sq. ft. facility with a production capacity of 1,000 kg. It’s also in the process of developing a 150,000 sq. ft. facility with a production target capacity of 40,000 kg per year.
In addition to its Canadian operations, it’s also aggressively moving into the European, Australian and Israeli markets. The latter, by the way, could end up being one that really sets ABcann apart from other Canadian producers. And this is all thanks to a company called Syqe Medical
Syqe Medical is an Israeli tech firm that’s developed the world’s first selective-dose pharmaceutical grade cannabis inhaler.
For doctors prescribing cannabis, this is the holy grail as it allows for a level of dosing precision that’s never been seen before. The inhaler uses 100 microgram dosing precision, real-time thermal and flow controllers, lung interfacing and wireless connectivity. This is beyond next-generation stuff, folks. And I’m all over it. So is ABcann.
You see, ABcann has already successfully shipped product to Syqe in Israel and the company is heavily involved in ongoing testing and R&D.
Apparently, the founder of Syqe, Perry Davidson loves ABcann, saying, “After visiting Abcann’s production facility in Canada, I personally witnessed that their production technologies put them in a class with the best in the world in their ability to produce standardized pharmaceutical grade cannabis.”
This is good company to be in.
It should also be noted that Syqe’s inhaler is being marketed by Teva Pharmaceuticals, a major pharmaceutical player with FY 2016 net revenues of $21.9 billion.
But getting back to the basics, ABcann is licensed, operational cultivator in Canada that grows pesticide-free cannabis (a superior niche), and has experienced a YTD customer growth rate of 30% month over month.
The company’s high yields offer a low cost-per-gram product, and its customer retention rate is 94.7 percent, which is very impressive.
The bottom line is that ABcann is a serious player in the legal cannabis space, and at current levels, it’s significantly undervalued.
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