A Key Test for Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF)

A Key Test for Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF)

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In our analysis of Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF), we continue to see a great deal of upside potential, but we still need to see signs of important accumulation at key technical levels. For example, the stock is now testing its 50-day simple moving average.

Perhaps helping to solidify the bid at the key level, the company just announced the closing of the previously announced acquisition of HemPoland. According to the release, “The transaction has received approval from the Toronto Stock Exchange and cements the Company’s commitment to building shareholder value through international expansion.”

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, TGODF just announced the closing of its HemPoland acquisition. This move introduces a strong international dynamic to this developing high-capacity story.

“HemPoland has proven an ability to execute through quality product development and strong brand awareness. We are incredibly pleased with this transaction, a key milestone in our long-term acquisition strategy. The acquisition is accretive to our shareholders, delivers immediate revenue, and opens a new vertical for TGOD.  We’re incredibly excited to have such an innovative and strong entrepreneurial team join our TGOD family,” said Brian Athaide, TGOD’s CEO.

In all, we’ve witnessed 4% tacked on to share pricing for the stock in the past month. Moreover, the listing has seen a growing influx of trading interest, with the stock’s recent average trading volume running nearly 210% over the long run average.

The release went on to note that “Europe is home to three-quarters of a billion potential consumers, and HemPoland is a leading manufacturer and marketer of premium CBD oils within this market. This acquisition provides TGOD with immediate revenue, access to HemPoland’s significant distribution network, state-of-the-art hemp oil extraction technology and the premium top selling Cannabigold brand. In connection with the transaction, TGOD has paid US$7.75 million in cash and has issued 1,968,323 restricted shares that will be escrowed for a term of three years from closing. Additionally, there is a contingent consideration of up to 3,047,722 deferred shares based on HemPoland achieving US$32 million in EBITDA for the financial year 2021. TGOD will invest a further US$10.3 million in HemPoland to fund innovative product development and rapid European expansion.”

Earning a current market cap value of $1.22B, TGODF has a significant war chest ($261.8M) of cash on the books, which is balanced by about $14M in total current liabilities. The company is pre-revenue at this point. We will update the story again soon as further details emerge. 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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