There weren’t many fresh breakouts in the cannabis space to close out this past week, but one to note blossomed in shares of Emblem Corp (OTCMKTS:EMMBF) on Friday. This is a stock we have been tracking of late with interest given the true downtrend in place over the past two years, and the sudden and clear reversal (including a breakout above the 50-day and 200-day simple moving averages) that has taken shape over the past 3 weeks.
Helping to fuel the surge on Friday, the company just announced today that it has entered into a five-year supply and preferred vendor agreement with Compass Cannabis Clinic to become a preferred cannabis supplier through its wholly owned subsidiary adult-use retail entity Starbuds Canada beginning on October 17, 2018.
Emblem Corp (OTCMKTS:EMMBF) frames itself as a company that produces, distributes, and sells medical cannabis and cannabis derivatives in Canada.
The company also operates medical cannabis education centers to provide education services for making informed decisions about medical cannabis treatment options to physicians and patients. In addition, it provides various accessories. Emblem Corp. has a strategic partnership with GreenSpace Brands to develop and commercialize cannabidiol infused health and beauty products.
The company is headquartered in Toronto, Canada.
According to company materials, “Emblem, through its wholly-owned subsidiary Emblem Cannabis Corporation, is a fully integrated licensed producer and distributor of medical cannabis and cannabis derivatives in Canada under the ACMPR. Emblem’s state-of-the-art indoor cannabis facility and research and development laboratory is located in Paris, Ontario. Led by an experienced management team of healthcare executives, accomplished marketing professionals, and cannabis experts, Emblem is focused on driving shareholder value through product innovation, brand relevance, and access to patient and consumer channels. Emblem is also the parent company of GrowWise Health Limited, one of Canada’s leading cannabis education services. Emblem trades under the ticker symbol EMC on the TSX Venture Exchange.“
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As noted above, the company has just signed on a preferred supplier for a cannabis retailer with forty confirmed leases for locations across Canada representing a mix of operational clinics that are now open, in development, or in preparation with the intended use of becoming retail cannabis stores.
“Emblem’s relationship with Compass establishes another important distribution channel to get our products and brands to cannabis consumers across Canada. As we continue to build our brands and innovate with products, the retail environment will play a critical role in building our awareness with consumers and driving market share,” said Nick Dean, CEO, Emblem Corp. “Compass is a highly regarded, trusted operator of cannabis clinics, and we are confident their Starbuds retail operations will continue in this vein. As the cannabis retail environment continues to develop, Emblem intends to pursue strategic relationships with retailers that will focus on providing a premier retail experience including product education, customer service, and quality products.”
In total, recent action has seen 40% tacked on to share pricing for the name in the past month, a bounce that has taken root amid largely bearish action over the larger time frame. Moreover, the listing has seen a growing influx of trading interest, with the stock’s recent average trading volume running 89% over the long run average.
“Compass has established a strong reputation as a trusted cannabis clinic. Our Starbuds retail operations will lean into this by providing a space for consumers focused on product education and expert service,” Dave Martyn, President of Starbuds Canada and Compass Cannabis Clinic says. “Starbuds is a rapidly developing cannabis brand in Canada and we look forward to building our team, establishing our retail footprint and serving Canada’s cannabis consumers.”
Earning a current market cap value of $155.02M, EMMBF has a significant war chest ($83.8M) of cash on the books, which compares with about $6.1M in total current liabilities. One should also note that debt has been growing over recent quarters. EMMBF is pulling in trailing 12-month revenues of $3.1M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 41.4%. 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 $EMMBF 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 $EMMBF, either long or short, and we have not been compensated for this article.