A Fresh Take on Cannabis Wheaton Income Corp (OTCMKTS:CBWTF)

A Fresh Take on Cannabis Wheaton Income Corp (OTCMKTS:CBWTF)


Cannabis Wheaton Income Corp (OTCMKTS:CBWTF) shares have been consolidating in recent action, but holding onto key support in the $1.25/share zone. Aiding in recent resilience, the company just announced that “further to its previously announced letter of intent”, it has entered into a binding definitive agreement with its streaming partner FV Pharma Inc. to develop all aspects of FV’s cannabis cultivation facility in mutually agreed staged phases, with the potential to build out the largest indoor cannabis cultivation facility in the world.

Chuck Rifici, Chairman and Chief Executive Officer of Cannabis Wheaton commented, “As a cornerstone asset in the Cannabis Wheaton portfolio, we are excited to start this journey with the FV Pharma team to build-out a truly world-class facility. As I previously mentioned, this project is special to us as it will not only create additional and much-needed supply for the medical and recreational Canadian cannabis markets but also has the potential to create hundreds of jobs for the City of Cobourg.”

Cannabis Wheaton Income Corp (OTCMKTS:CBWTF) trumpets itself as an investment company that seeks to provide investor returns through streams and capital appreciation in the Canadian cannabis industry.

The company operates as a cannabis streaming company. It provides funding for cannabis facility expansions, operations, and initial construction in exchange for minority equity interests and a portion of the cultivation production.

The company was formerly known as Knightswood Financial Corp. and changed its name to Cannabis Wheaton Income Corp. in May 2017. Cannabis Wheaton Income Corp. was incorporated in 1987 and is based in Vancouver, Canada.

According to company materials, “Wheaton Income is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.”

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The technical pattern here still looks promising, but we want to see more progress in terms of working out the top-line growth issues. The company is operating in a growth sweetspot and should be able to start putting up numbers rather than just buzz and hype. Its most recent deal will hopefully help to push this story toward more tangible financial success.

According to the release, the FV Pharma facility was formerly a food manufacturing center for Kraft Foods and features as much as 620,000 square feet of building space. Company management also notes that the location is a positive in this case given that it just about an hour from Toronto with multiple easy points of access to Ottawa and Montreal.

Thomas Fairfull, President and CEO of FV Pharma said, “We couldn’t have asked for a better joint venture partner for the development of our world-class facility and the execution of our business plan that we expect will create hundreds of quality skilled jobs for the City of Cobourg. We are excited at the opportunity to build and operate something special with Cannabis Wheaton and to set the gold standard for cannabis cultivation and for cannabis-derived consumer products.”

We’ve witnessed 5% piled on for shareholders of the company during the trailing week. This is emblematic of the stock. CBWTF has a track record that includes a number of dramatic bounces. Furthermore, the name has registered increased average transaction volume recently, with the past month seeing 29% over what the stock has registered over the longer term.

At this time, carrying a capital value in the market of $258.8M, CBWTF has a significant war chest ($26.1M) of cash on the books, which is balanced by virtually no total current liabilities. CBWTF is pulling in trailing 12-month revenues of $51K. However, the company is seeing dramatic declines on the top-line on a quarterly y/y basis. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $CBWTF 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 $CBWTF, either long or short, and we have not been compensated for this article.

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