THC Biomed Intl Ltd (OTCMKTS:THCBF) is an interesting stock to watch right now. Given news that the US Federal Gov’t is moving, under the direction of Attorney General Jeff Sessions, to make it harder for state-level marijuana legalization to protect private sector companies involved in the cannabis game, most of the sector got walloped on Thursday. But THCBF fared far better than most. Was this because the stock came into the day without big recent gains? Hardly. Shares of THC came into Thursday’s trading session with seven consecutive higher closes amounting to nearly 300% in gains over that short stretch.
However, the catalyst igniting that move suggests something about why the stock held up so well: strong momentum outside the reach of Mr. Sessions. Specifically, the company launched its shares higher on its announcement in late December that its subsidiary, THC2GO Dispensaries Ltd, has officially submitted its application to operate cannabis retail stores in the province of Manitoba. In other words, the company is looking to lock down end-market footprint share where legislation is already in place on a rock solid basis.
THC Biomed Intl Ltd (OTCMKTS:THCBF) trumpets itself as a Canadian federally Licensed Producer of Medical Marihuana strategically located in Kelowna, BC Canada that is devoted to Research & Development, plant innovation and life sciences, with the emphasis on Medical Cannabis.
According to company materials, “THC is an authorized licensed producer and seller of dried Marihuana for Medical Purposes, fresh Marihuana, Cannabis oil and starting materials (plants). Please see THC’s website at www.thcbiomed.com for more information on all of its products and how to become a customer… THC’s vision is to be on the leading edge of scientific research and development of products and services related to the medical cannabis industry while creating a standard of excellence. Management believes that as the industry develops, it will become more important to focus on scientific research and development of products and services related to medical cannabis and that THC is well positioned to be in the forefront of this rapidly growing industry.”
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Incidentally, aside from the application toward retailing of cannabis, the company also announced that Health Canada has amended its ACMPR license to include 4 additional Grow Rooms. According to the release, ”these additional Grow Rooms will allow THC to ramp up production, substantially adding an additional 400kg per annum. THC expects in the next few months to be the first Licensed Producer to offer a consistent supply of 21 different strains. The 4 Grow Rooms went into production on Friday the 15th December 2017.”
Here’s the big point: when you see headlines that imply sector-wide pain, it’s always a good idea to look for spots of relative strength – even if those stocks are seeing red action as well. The combination of being less red and seeing high volume often implies smart money moving in to take shares off the hands of those with less information advantage.
THCBF might be a great example of that principle in action right now.
We’ve witnessed in excess of 270% piled on for shareholders of the name during the trailing month. This is emblematic of the stock. THCBF has a track record that includes a number of dramatic bounces. In addition, the company has witnessed a pop in interest, as transaction volume levels have recently pushed just under 760% over what the stock has registered over the longer term.
Now commanding a market cap of $221.1M, THCBF has virtually no cash on the books, which compares with about $125K in total current liabilities. THCBF is pulling in trailing 12-month revenues of $60K. However, the company is seeing recent declines on the top-line on a sequential quarterly basis, with revenues falling at -41% as of its latest reporting period. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $THCBF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $THCBF, either long or short, and we have not been compensated for this article.