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Tuesday, November 24, 2020

Is CannaRoyalty Corp (OTCMKTS:CNNRF) Next Up in the Cannabis Breakout Parade?

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For those looking for new breakout candidates in the embers of the recent cannabis flame-up, CannaRoyalty Corp (OTCMKTS:CNNRF) is an interesting case. The stock is testing key resistance and just set a new closing all-time high to kick off this week. Growth has been big on the top-line and traders are taking notice of the nature of recent catalysts.

As a case in point, the company just announced that it has entered into a binding letter of intent with Tidal Royalty Corp., a leading provider of royalty financing to licensed US cannabis operators, whereby Tidal Royalty will acquire the Company’s equity stake and royalty entitlement in Alternative Medical Enterprises LLC for a consideration of $8 million. According to the release, “CannaRoyalty will maintain the right to license MÜV products in California, Nevada, Canada and other select markets.”

CannaRoyalty Corp (OTCMKTS:CNNRF) promulgates itself as a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world’s largest regulated cannabis market.

By building a world-class logistics platform and supporting contract manufacturing assets, the Company intends to support the growth of new and established cannabis brands.

The Company believes California, home to some of the world’s most discerning consumers and a nexus of information and trends, will be the point of inception for the global cannabis brands of the future. CannaRoyalty has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support its existing brands, partner products and distribution networks.

The Company’s leadership and staff combines passion and a hands-on understanding of the cannabis industry, with proven financial and legal expertise. CannaRoyalty’s shares trade on the Canadian Stock Exchange (CSE) under the symbol CRZ and in the US on the OTCQX under the symbol CNNRF.

According to company materials, “CannaRoyalty Corp (OTCMKTS:CNNRF) is a private equity firm specializing in acquisitions. The firm invests in the legal cannabis sector with a focus on research and intellectual property, consumer brands, and industry infrastructure. It seeks to invest in the United States and Canada. CannaRoyalty Corp. is headquartered in Ottawa, Canada.”

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As noted above, the stock may be flirting with a serious breakout to new record highs if recent momentum can sustain itself. Recent action has seen 31% tacked on to share pricing for the company in the past month. In addition, the name has benefitted from a jump in recent trading volume to the tune of just under 240% beyond its prior sustained average level.

“The sale of our equity stake and royalty in AltMed advances our stated strategy of realizing value for shareholders on assets that are deemed non-core to our business. The substantial gains from our successful investment in AltMed will provide CannaRoyalty with capital to continue to expand its distribution and brand network in the California market while offering CannaRoyalty shareholders a significant return on investment,” said Marc Lustig, Chairman and CEO of CannaRoyalty. “We were early to identify the long-term potential in AltMed and MüV as vital players in the North American cannabis value chain and are confident that the businesses will be valuable additions to Tidal Royalty’s diverse portfolio. As CannaRoyalty continues to grow and build a solid presence in California, we look forward to partnering with the experienced team at Tidal Royalty.”

Earning a current market cap value of $262.5M, CNNRF has a significant war chest ($12M) of cash on the books, which is balanced by virtually no total current liabilities. CNNRF is pulling in trailing 12-month revenues of $4.7M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 280.9%. 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 $CNNRF 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 $CNNRF, either long or short, and we have not been compensated for this article.

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