This week, we take a deep dive into four companies, one of which is a penny stock to avoid…
Although, many people are focused on earnings and the issues at CannTrust Holdings (NYSE: CTST) right now, there are several other companies our members have asked questions about recently.
While the companies I am about to talk about aren’t in any of our model portfolios, I still want to provide our members with insight into other companies and their investing strategies.
Keep in mind that I can’t give personal financial advice, but I can provide my general thoughts.
Hopefully, you’ll find some nuggets of wisdom from how I evaluate a company and apply them to your own investing philosophy.
Also, we currently have ratings on more than 190 companies in our NICILytics database. If you want to see all the cannabis tech stocks, or the medical firms, or the up-and-coming brands – you can sort this database by market sector.
Today, we’re going to look at four companies: Advantis Corp., FSD Pharma Inc. (CSE: HUGE, OTC: FSDDF), Radient Technologies Inc. (TSXV: RTI, OTC: RDDTF), and Wayland Group Inc. (CSE: WAYL, OTC: MRRCF).
What to Know About These Cannabis Companies
One of our members asked about a very diverse group of cannabis companies.
Ronald N. asks: “Would you please shed light on three stocks we don’t hear much about? They are FSD Pharma, Radient Technologies, and Advantis.”
Hi, Ronald. Let’s start with the one you should avoid at all costs. Then, I’ll tell you about the one that shows promise.
Advantis is an old penny stock. The company has previously been in the water treatment business and, after that, it was marketing a lip balm.
Now, it’s in the CBD business.
A quick check of the stock price will show you that it has not been successful at any of these endeavors. Somehow, over time, the company managed to issue over 800 million shares (by comparison, Google has less than 350 million shares).
And, with those 818,969,715 shares, it managed to generate revenue in the first quarter of $145,760. That’s not in millions – that’s in dollars. The company has less than $25,000 of cash, and its total assets are less than $300,000.
It has no announced strategy. It doesn’t disclose what it is selling, or where. And, it survives off of loans from its biggest stockholders.
That should be all you need to know about Advantis Corp.
FSD Pharma Inc.
It also has an assortment of investments in other cannabis companies, including pharmaceutical companies.
If there is to be a payoff from the company’s strategy, it is likely very far off – 2025 at the earliest – and will require a lot of newly-raised cash to complete the company’s buildout.
In this market, we need companies which are experiencing near-term catalysts.
Radient Technologies Inc.
Radient has engineered a new way to dry cannabis buds. Drying is an important step in the production process, which is traditionally either very expensive or very time-consuming.
Drying is also very important because, if done wrong, it can hurt the quality of the cannabis. Radient had not been succeeding at getting potential customers to try its method, but it recently made a well-received turn to the extraction business, which is going to be a huge deal in Canada as vapes and edibles become legal in December.
In fact, extraction is going to be so important that our Advisory Board Member, Jenn Larry, was kind enough to create a report about extraction that our members can access for free to the right of this text.
It’s also been leveraging some nicotine-reduction technology that could create a good business over time. Recently, a lot of my research time is being spent reviewing this company closely to see if it can become as important in the extraction industry as Valens GroWorks Corp. (CSE: VGW, OTC: VGWCF) and Neptune Wellness Solutions Inc. (NASDAQ: NEPT, TSX: NEPT).
Next, I’m going to take a look at a complicated deal.
Wayland Group Update
The cryptocurrency market has tried to converge with the marijuana industry, and there’s a current example of that taking place.
Andre Hernandez asks: “Can you give me your take on the recent announcement of Wayland Group selling its assets to Cryptologic. I own both Wayland and International Cannabis Corp., and it seems like a complex deal. I have been holding on to both for the long term, but I have taken it in the shorts on both. Seems like a share offering deal, but they mentioned a $4 per share price point?”
This is complicated stuff, Andre.
To catch all of our members up on what is happening, Wayland is selling its Canadian assets to Cryptologic in exchange for shares – the Wayland holders will have 70% of the new Cryptologic.
Cryptologic intends to sell its crypto mining, and the closing on the deal depends on Cryptologic having C$25 million of cash following the sale.
So, the resulting company will have Wayland’s Canadian assets, Wayland’s management, and Wayland’s shareholders along with new cash and new shareholders. That seems like a complicated share sale. Meanwhile, Wayland is completing an earlier deal in which it is selling its international operations to International Cannabis Corp. (CSE: WRLD, OTC: WLDCF) for ICC shares which it intends to distribute to shareholders.
I haven’t figured out exactly what Wayland is up to right now, but I think you’re right – the company is basically selling shares at a deemed price of C$4.00, a price Cryptologic hasn’t seen since February.
I like those international assets – I’ve talked about International Cannabis to Lifetime Members before. And Cryptologic’s CFO, who is staying on as CEO of the new company, had an earlier successful exit in the cannabis business, which is always a good sign. But there are so many moving parts here that I think it makes sense to stay away from the whole mess until things become more stable. For those with a longer-term outlook, I do think that ICC will have some value after the smoke clears.
Enjoy the rest of your weekend.
Executive Director, National Institute for Cannabis Investors
19 responses to “You Asked, We Answered: Four Companies You Want to Know More About”
August 17 2019