Why CannaRoyalty Corp (OTCMKTS:ORHOF) Shares Face a Fight of Ultimate Consequences

Why CannaRoyalty Corp (OTCMKTS:ORHOF) Shares Face a Fight of Ultimate Consequences

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Shares of CannaRoyalty Corp (OTCMKTS:ORHOF) continue to set up as a possible bottoming pattern with some upside ahead in the cannabis patch. The company has been pushing toward its acquisition by Cresco Labs Inc. But there are continued obstacles to work through. Hence, its performance becomes an increasingly important part of the share pricing equation. In that vein, the company just announced its financial results for the three and six-month periods ended June 30, 2019.

Marc Lustig, Chairman and CEO of Origin House commented, “I am very proud of the entire Origin House team for generating another quarter of record revenue growth, leveraging the California brand support and distribution platform we built over the past several years, to deliver results for shareholders. It speaks to the strength and maturity of our organization that we were able to increase our share of shelf in California while preparing to integrate with Cresco Labs. To that end, in this quarter, we successfully executed on the sale of Alternative Medical Enterprises LLC generating a 156% return on investment, our distribution division Continuum entered into a distribution agreement with Cresco and began distributing Cresco branded products across California, and we have made substantial progress on post-closing groundwork.”

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 financial results for the three and six-month periods ended June 30, 2019.

We’ve witnessed 2% tacked on to share pricing for the company in the past month. In addition, the company has benefitted from a jump in recent trading volume to the tune of 15% beyond what we have been seeing over the larger time frame.

Mr. Lustig continued, “In California, we have built a foundation that is capable of supporting a much larger business and expect to begin to drive significant operating leverage as we continue to grow revenue. With additional regulatory pressure on the illegal market in California, we expect 2020 to be a big year in the state. I am as confident as ever that the combination of Cresco Labs’ scale, expertise and brand portfolio with Origin House’s proven track record of leveraging our California-wide distribution footprint, is the best way for shareholders to participate in this growth. Together, we will be well-positioned to build a national, and one day, global house of brands.”

At this time, carrying a capital value in the market of $375M, ORHOF has a significant war chest ($17.6M) of cash on the books, which compares with about $48.1M in total current liabilities. One should also note that debt has been growing over recent quarters. ORHOF is pulling in trailing 12-month revenues of $35.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 487.5%. We will update the story again as soon as developments transpire. 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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