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Friday, November 27, 2020

Here’s Why Shorts Just Stepped on a Landmine in Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF)

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As noted in our last piece on Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF), we believed the party might just be getting started for this stock. Since that time, we have seen shares rip about 23% higher, with most of that damage done to start this week, and volume kicking up through the roof.

To help foster the move, the company just announced that it has agreed with Aurora Cannabis Inc. to extend Aurora’s exercise deadline of its first milestone option under the TGOD Aurora Investor Rights Agreement by 6 weeks to October 12, 2018. According to the release, “The first Milestone Option entitles Aurora to acquire an additional 8% of the common shares of the Company.”

Green Organic Dutchman Holdings Ltd (OTCMKTS: TGODF) is a research & development company licensed under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”) to cultivate medical cannabis. The Company carries out its principal activities producing cannabis from its facilities in Ancaster, Ont., pursuant to the provisions of the ACMPR and the Controlled Drugs and Substances Act (Canada) and its regulations.

The Company grows high quality, organic cannabis with sustainable, all-natural principles. TGOD’s products are laboratory tested to ensure patients have access to a standardized, safe and consistent product. TGOD has a funded capacity of 116,000 kg and is building 970,000 sq. ft. of cultivation facilities in Ontario and Quebec.

The Company has developed a strategic partnership with Aurora Cannabis Inc. (TSX:ACB) whereby Aurora has invested approximately C$78.1 million for an approximate 17.5% stake in TGOD. In addition, the Company has raised approximately C$290 million dollars and has over 5,000 shareholders. TGOD’s Common Shares and warrants issued under the indenture dated November 1, 2017 trade on the TSX under the symbol “TGOD” and “TGOD.WT”, respectively.

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As noted above, shares of TGODF caught a big boost to kick off the week on news that the company announced that it has agreed with Aurora Cannabis Inc. to extend Aurora’s exercise deadline of its first milestone option under the TGOD Aurora Investor Rights Agreement by 6 weeks to October 12, 2018.

That headline reaffirmed the stock’s resolve above the 50-day simple moving average. In all, recent action has seen 21% piled on for shareholders of the stock during the trailing week. In addition, the listing has witnessed a pop in interest, as transaction volume levels have recently pushed 270% over what the stock has registered over the longer term.

“The Aurora partnership has been incredibly beneficial for both parties to date,” said Brian Athaide, TGOD’s CEO. “In addition to the organic supply agreement, the value of Aurora’s initial investment has increased nearly five-fold. In turn, the assistance provided by the Aurora team has helped accelerate our progress across all divisions, and we look forward to continuing our strategic partnership as we work towards building the largest organic cannabis brand in the world.”

Terry Booth, CEO of Aurora, added, “We are pleased with the progress made at TGOD to date, as reflected by the significant appreciation of our investment. We are now working with the TGOD team on finalizing the details of our go forward partnership, and we will continue to support them as they execute on their strategy.”

Earning a current market cap value of $991.3M, TGODF has a significant war chest ($261.8M) of cash on the books, which must be weighed relative to about $14M in total current liabilities. The company is pre-revenue at this point. 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 $TGODF 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 $TGODF, either long or short, and we have not been compensated for this article.

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