Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) has been pulling back a little over the past two weeks after an explosive rip higher during the first half of January. EMHTF is still trading well above its key longer-term moving averages at this point, but is testing support at the 20-day EMA. The story is still extremely compelling, and lower prices may be quite welcome as an opportunity as this narrative builds out.
As a case in point, the company recently announced that it has signed a Letter of Intent with Namaste Technologies Inc. (OTCMKTS:NXTTF) whereby Namaste and Emerald propose to enter into a definitive agreement to collaborate on strategic business opportunities worldwide and develop a fully-integrated e-commerce platform to serve as a retail channel for Emerald’s patients. According to the release, “under the terms of the Proposed Agreement, the companies would leverage Namaste’s existing consumer databases, site traffic and e-commerce technology for marketing purposes along with Emerald’s pharmaceutical and biotech expertise to develop medical cannabis downstream products tailored to specific markets and patients.”
Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) trumpets itself as a licensed producer of medical marijuana under the Access to Cannabis for Medical Purposes Regulations, which allows the company to produce and sell medical marijuana and cannabis oils to clients and other licensed producers.
Individuals may become clients of the company by registering with the company through its secure online portal or via telephone after the individual has received a medical document signed by a licensed health care practitioner setting out the daily quantity of dried marijuana, in grams, that the practitioner authorized for the person.
According to company materials, “Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) operates through Emerald Health Botanicals Inc., a wholly owned subsidiary and Licensed Producer under the Access to Cannabis for Medical Purposes Regulations. Botanicals is authorized to produce and sell both dried medical cannabis flower and medical cannabis oil in Canada. Botanicals currently operates an indoor facility in Victoria, BC, and is progressing on expansion plans for a 32-acre property in Metro Vancouver and a partnership with Village Farms, called Pure Sunfarms, utilizing a 25-acre existing greenhouse complex in Delta, BC. Botanicals is one of Canada’s most medically focused licensed producers, with a team highly experienced in life sciences product development and large-scale agribusiness. Its vision is to be a leading provider of cannabis products through its production capabilities, proprietary genetics, value-added products and branding, and superb customer experience. Emerald Health Therapeutics is associated with the Emerald Health group, which comprises multiple companies advancing diverse botanical, nutraceutical and pharmaceutical products that may provide wellness and medical benefits by interacting with the body’s endocannabinoid system.”
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According to the company’s release, the e-commerce platform will be developed using Namaste’s technology, including machine-learning algorithms and advanced on-site optimization techniques, and is planned to be available on desktop and mobile devices.
That suggests that Namaste would make available its full product catalog of over 1000+ cannabis delivery devices to Emerald for sale to its patients through its platform, which is potentially a major opportunity.
“Emerald’s goal is to offer a broad selection of cannabis products to adult consumers through various legal channels, including digital and physical stores,” said Avtar Dhillon, Executive Chairman of Emerald. “We believe that combining Namaste’s online marketing tools and expertise, large and growing customer base, and its array of cannabis delivery products with our proprietary cannabis strains and product development expertise can build significant incremental sales in legal markets in Canada and internationally.”
Sean Dollinger, President and CEO of Namaste comments: “We see great value in working with Emerald to develop a vertically integrated platform, starting with driving site traffic through to acquiring patients and offering them high quality medical cannabis products. Our goal with Cannmart is to offer the largest selection of medical cannabis products to our patient base in Canada. We look forward to exploring similar opportunities with Emerald internationally. Thanks to Emerald’s management team and Executive Chairman for the amazing communication and collaboration in developing this concept and we look forward to bringing this vision to reality.”
Earning a current market cap value of $593.2M, EMHTF has about $28M in cash on the books, which is balanced by roughly $14M in total current liabilities. The company has pulled in about $470K in TTM revenues. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $EMHTF 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 $EMHTF, either long or short, and we have not been compensated for this article.