I have a new exclusive video and answers to some of your most vital questions…
This week, I released a new video featured on NICITV in our Media section.
In the video Q&A, we talk to Eric Rogers, the co-founder of TINC. TINC is a privately held cannabis beverage company based in Georgetown, Massachusetts.
Now, we’ve seen cannabis beverages in California, Nevada, and elsewhere, but TINC will be the first producer in Massachusetts.
I really like Eric and TINC’s approach. The company will be making beverages with just a little bit of THC, which will allow consumers to have one of the company’s beverages without much of a psychoactive effect. The drinks will be pleasant and relaxing, like a beer or a glass of wine.
Eric also reveals that the company will be coming out with a line of CBD beverages as well as other products.
Take a look below:
And the passing of the SAFE Banking Act should help private companies like TINC.
When more startup companies like TINC are able to secure money, investors will see a profit. In fact, you can start seeing the kind of returns that are available to private investors here.
Ultimately, the SAFE Banking Act is meant to make it easier to access capital and to build and expand a cannabis entrepreneur’s business
But many are concerned and are asking if the SAFE Banking Act will help or hurt companies.
The SAFE Banking Act of 2019 will have many effects but will a negative impact on companies be one of them?
SAFE Banking Act Effect On Companies
David B. asks: “Do you see the passing of SAFE Banking having a negative effect on companies like Xtraction Services, or Trichome Financial?”
David, I’ve answered this question a few times in a few different ways but it keeps popping up because there are a lot of people writing that it will hurt companies like Xtraction Services (CSE: XS), Trichome Financial, or even Innovative Industrial Properties Inc (NYSE: IIPR).
I think it won’t hurt those companies at all and might even help some of them. Trichome is a perfect example of a company that will be unaffected by the SAFE Banking Act and a good lesson for other companies.
Why? Trichome is based in Canada and is financing Canadian companies – at least for now.
Cannabis is federally legal in Canada, of course, and the banks are not restricted from working with Cannabis companies the way they are in the United States.
And yet, Trichome is finding a lot of good investment opportunities. That’s because banks don’t like to lend to companies that are not yet profitable.
When they do make such loans, it is only to the largest, most liquid companies out there, like Aurora Cannabis Inc. (NYSE: ACB) and Canopy Growth Corp. (NYSE: CGC). Smaller companies are still locked out. And many lines of lending are also locked out, like equipment financing, which is what Xtraction does.
Specialty lenders and financers will be important to the cannabis industry for many years, and the successful ones will not be beaten by the banks, they will be purchased by them.
What to Do with KushCo
James C. asks: “A short time ago you said to dump KushCo Holdings because of a price cap. But just the other day you wrote something about them. So should I buy the stock back that I sold? The reason I bought it in the first place was you recommended it and they are a packaging company. I figured with all these companies needing packaging, we couldn’t lose. I lost on the sale. Should I reverse and buy back? Or should I stay away?”
I did write something positive about KushCo Holdings Inc. (OTC: KSHB) recently. I lauded their deal with De La Rue to launch a line of authentication products for the cannabis industry.
KushCo does a lot right. But no, you should not buy back your shares at this time.
As I wrote when I recommended selling the company, the financing it did essentially puts a price cap on the company at around $2.25 per share. That means that KushCo can do all those good things but shareholders will not benefit from them for quite some time.
If all the warrants the company issued get exercised (and it would take a 12% run in the stock before anyone even did that), people who owned shares before the company’s financing will be diluted by 40%. That’s a big cut.
KushCo is a good example of why share structure is so important to a company, particularly a young one. It’s something I write about a lot for Cannabis IPO Insider.
And James, you bring up a good broader question. I often say something good about a company but do not recommend it.
Even the worst companies often do something good and I’ll never shy away from saying so. But that doesn’t mean you should buy it. On the other side, even the best companies sometimes make errors and I’ll say that, too.
Ultimately, of course, you make your own investment decisions and if you see me reporting something positive you might conclude that it’s so good you should buy the company even if I don’t recommend it.
Many of our subscribers use our NICILytics database to do just that, and I definitely recommend utilizing this tool that will take your cannabis investing skills to the next level.
Green Growth Brands Stock
William B. asks: “Should an investor buy more Green Growth Brands stock? It has good management, solid backers, executable business plan, and the fundamentals seem great. So why the slide in stock price?”
I’m bullish on the cannabis market, of course, so I think a lot of these stocks should not have fallen. But I can at least understand if investors sold some of the companies with weaker financials to reduce risk. In this market, we’re seeing the best companies sell off as much or sometimes even more than the worst ones! Green Growth Brands (OTC: GGBXF) and The Supreme Cannabis Company Inc. (OTC: SPRWF) are perfect examples.
Green Growth is still losing money, but it has some of the best products and locations in the CBD industry, it has successful THC operations in the most important state in the cannabis market, and it’s backstopped by one of the richest families in the world. Supreme has the hottest products in Canada’s cannabis market and is cash flow positive. They should not be selling off the way weaker companies have.
But they are selling off. It’s a classic panic, not a real reaction to fundamentals.
When the panic ends, some of the weaker companies will only recover a little. I think the strongest companies – those with business plans which are working and which have enough financing to succeed, will recover a lot more.
Executive Director, National Institute for Cannabis Investors
2 responses to “The One Beverage Company with a Foothold in Massachusetts”
November 09 2019