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Monday, November 30, 2020

Is CannaRoyalty Corp (OTCMKTS:ORHOF) Ready to Get Back on the Throne?

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For those looking for new hot names in the cannabis space, you could do a lot worse than CannaRoyalty Corp (OTCMKTS:ORHOF). Shares of the stock broke down on Wednesday and then closed strong. That action came in response to the company’s announcement of financial results for the three and nine-month periods ended September 30, 2018. Revenues were $6.6 million as compared to $744,302, an increase of 790%; gross margin was $298,619 as compared $128,010, an increase of 133%; and operating expenses were $10.1 million as compared to $2.8 million, an increase of 261%.

Marc Lustig, CEO of Origin House, commented, “Last quarter, we stated that after a substantial period of building a foundation, Origin House was at the beginning of a multi-period, sustainable acceleration in revenue growth. Year-to-date, we generated record revenue, completed four transformational acquisitions and are well-capitalized to continue growing. We expect to continue delivering strong revenue growth throughout Q4, 2019 and beyond, as RVR and 180 Smoke are integrated and as we further leverage our brand development and support platform. Our view is that the next 12 months are going to be critical in determining the winners in the cannabis space. Origin House is positioned as a premier operator in the largest and most dynamic cannabis market in the world and we believe we are just at the beginning of our growth curve. We expect this platform to become increasingly difficult to replicate and therefore increasingly valuable for our shareholders as our financial results accelerate, as well as for other operators in the cannabis space that need to be in California.”

CannaRoyalty Corp (OTCMKTS:ORHOF) trumpets itself as 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.

The company is doing business as Origin House.

Origin House is a growing cannabis products and brands company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands.

The Company’s foundation is in California, the world’s largest regulated cannabis market, where it delivers over 130 branded cannabis products to the majority of licensed dispensaries.

Origin House’s brand development platform is operated out of five licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. The Company is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke.

Origin House’s Common Shares currently trade on the Canadian Securities Exchange (CSE) under the symbol “CRZ” and will trade under the symbol “OH” effective October 23, 2018. Origin House is the registered business name of CannaRoyalty Corp.

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As noted above, ORHOF just announced its Q3 financial data.

“One year ago, we unveiled our ambitions to the public. In that period, Origin House has already created a proven track record of identifying break-out brands, partnering with them and selling to customers in a competitive marketplace to drive mutual success,” said Afzal Hasan, President and General Counsel of Origin House.

In all, traders will note 11% tacked on to share pricing for the listing in the past month. Moreover, the company has registered increased average transaction volume recently, with the past month seeing just under 150% above its longer-run average levels.

“The financial results we generated in Q2 and Q3 are representative of just the initial framework of a model primed for growth. We have already shown some early success in supporting the growth of some of the largest independent brands in California, like Lowell’s Smokes and King’s Garden. Our growing suite of brand development and support solutions, including financing, allows us to structure innovative, revenue-driving deals with other emerging brands, like we have done with Henry’s Original, Pacific Remedy and Utopia. These deals are the first in an extensive pipeline of brand partnerships that we are now executing on. Investing in our partners enables them to scale and realize their aspirations while providing us with sizable upside and limited risk.”

Now commanding a market cap of $376.65M, ORHOF has a significant war chest ($12M) of cash on the books, which compares with about $4.5M in total current liabilities. ORHOF 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%. 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 $ORHOF 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 $ORHOF, either long or short, and we have not been compensated for this article.

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