Is the Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) Breakout On?

Is the Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) Breakout On?


Shares of Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) broke out to close the week on Friday. The stock’s move represents a pop above the 200-day simple moving average as well as the recent range highs.

To help fuel the breakout, the company just announced that it has been selected as an approved supplier by the Ontario Cannabis Retail Corporation, operating as the Cannabis Retail Store, to supply the province of Ontario with its cannabis products in anticipation of the adult-use market starting October 17, 2018. According to the release, “Quantities will be disclosed once details have been released by the Province of Ontario.”

Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) trumpets itself as a licensed producer of medical marijuana under the Access to Cannabis for Medical Purposes Regulations, which allows the company to produce and sell medical marijuana and cannabis oils to clients and other licensed producers.

Individuals may become clients of the company by registering with the company through its secure online portal or via telephone after the individual has received a medical document signed by a licensed health care practitioner setting out the daily quantity of dried marijuana, in grams, that the practitioner authorized for the person.

According to company materials, “Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) operates through Emerald Health Botanicals Inc., a wholly owned subsidiary and Licensed Producer under the Access to Cannabis for Medical Purposes Regulations. Botanicals is authorized to produce and sell both dried medical cannabis flower and medical cannabis oil in Canada. Botanicals currently operates an indoor facility in Victoria, BC, and is progressing on expansion plans for a 32-acre property in Metro Vancouver and a partnership with Village Farms, called Pure Sunfarms, utilizing a 25-acre existing greenhouse complex in Delta, BC. Botanicals is one of Canada’s most medically focused licensed producers, with a team highly experienced in life sciences product development and large-scale agribusiness. Its vision is to be a leading provider of cannabis products through its production capabilities, proprietary genetics, value-added products and branding, and superb customer experience. Emerald Health Therapeutics is associated with the Emerald Health group, which comprises multiple companies advancing diverse botanical, nutraceutical and pharmaceutical products that may provide wellness and medical benefits by interacting with the body’s endocannabinoid system.”

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As noted above, the company just announced that it has been selected as an approved supplier by the Ontario Cannabis Retail Corporation. The news helped the stock break out to close the week, helping to solidify recent performance. In all, recent action has seen 79% during the past month in terms of shareholder gains in the stock, a rally that has pushed up against longer standing distributive pressure in the stock.

What’s more, the name has benefitted from a jump in recent trading volume to the tune of greater than 120% beyond what we have been seeing over the larger time frame.

“We’re proud to partner with the OCS to provide adults in Ontario with the opportunity to discover our products,” said Chris Wagner, CEO at Emerald. “We look forward to helping Ontario expand its supply and diversity of products to meet anticipated demand and consumer preferences. With more than 14 million people, Ontario is a key market for us as we expand nationwide and build our brand.”

Earning a current market cap value of $538.24M, EMHTF has a significant war chest ($72.7M) of cash on the books, which must be weighed relative to about $26.3M in total current liabilities. One should also note that debt has been growing over recent quarters. EMHTF is pulling in trailing 12-month revenues of $1.1M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 15.7%. 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 $EMHTF 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 $EMHTF, either long or short, and we have not been compensated for this article.

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