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Wednesday, November 25, 2020

How CannaRoyalty Corp (OTCMKTS:CNNRF) Just Became the Next Big Bang in the Patch

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We recently profiled CannaRoyalty Corp (OTCMKTS:CNNRF), suggesting that it could be an interesting breakout play in the space (see “Is CannaRoyalty Corp Next Up in the Cannabis Breakout Parade?”). In the meantime, we have seen new all-time highs come about in shares. The move has come during a pullback for many other stocks in the space, and on rising volume, which suggests its importance.

Helping to drive the action, 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 U.S. 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, CNNRF shares have been breaking out, at least in part fueled by news that it has entered into a binding letter of intent with Tidal Royalty Corp., a leading provider of royalty financing to licensed U.S. 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.

In response, we’ve witnessed 31% during the past month in terms of shareholder gains in the company. Furthermore, the name has seen interest climb, with an increase in recent trading volume of greater than 240% over the long run average.

“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.

Now commanding a market cap of $281.92M, CNNRF has a significant war chest ($12M) of cash on the books, which stands against about $4.5M in 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%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. 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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