Yes, a bit disappointing, but hardly surprising. It seems that some investors in Oz MC companies expect overnight revenue generation from each new venture or acquisition, but the reality is that most new cannabis ventures take at least 12 months to get into production, and considerably longer if its a new greenfields situation requiring extensive siteworks, licensing procedures, and R+D. The main exception is for those Oz MC companies with hemp divisions, which are producing substantial revenues much more quickly.
The main reasons why I believe that the new CPH JV is a big deal are that (a) no siteworks are required, as they are utilising existing greenhouses, irrigation, etc; (b) the licensing application procedure is already underway; (c) there are some influential figures in the Israeli MC and agribusiness sectors involved on both sides of the JV; and (d) unlike most other countries, the Israeli MC market is already established and successful, with considerable support from the medical profession and a sympathetic government.
I used to invest mainly in the mining industry, and I was used to companies taking 7 - 8 years from a major mineral discovery until commencement of production, so I'm very comfortable with waiting for a year or more for MC companies' new ventures to start paying off.
CPH Price at posting:
70.0¢ Sentiment: Buy Disclosure: Held
