You serious? So why are some pot stocks worth close to $100 million? Why are some worth close to $500 million? Why did major pharmaceutical companies lobby against the US government in the 1930s to outlaw marijuanas? The answer couldn't possibly be because they saw it as a major threat to their existence.
Face it. The world is changing. Marijuana, scientifically speaking, is safer than alcohol. It will become legalised from a recreational perspective in Australia, probably after Labor win the election and the US legalises it at the Federal level. New Zealand is looking at legalising from a recreational direction now. Medical marijuana has already been legalised and remains a market in its infant stage in Australia, however. But this will change, quickly. And possibly when CBD becomes legalised at a federal level in the US, likely following the 2020 US election...if not before it.
Impression is posturing for a strategic position at the head of the table today, adhering to a low cost, low margin, high volume business model. This won't happen overnight. The company needs to sign some formal deals. The good news is that it's in the process of negotiating deals with leading revolutionary biotech companies in the space. Before you know it, IHL will be selling pot products via its distribution arm, Cannvalate.
BDA is the closest competitor on the market. Currently, on an EV perspective, both companies are trading at similar valuations. Yet, IHL is far ahead of BDA. BDA has finished phase one trials and isn't generating much revenue. BDA is also hemorrhaging its operating cash flow. Yet, given its leadership team, it has attracted some institutional interest in the recent past. The company's EV was also more than double IHL's at many times in the past six months. There's no reason why the reverse can't happen following a few positive deals. Plus, IHL has done bugger all road shows or marketing.
Imagine what happens when the marketing campaign starts. We don't know when this will happen. But we're looking forward to the company presenting at a number of conferences broking firms, and small-cap funds around the country.
There's also another point we didn't mention in our latest deep value post, regarding the capital side of things. We believe there's a chance that Cannvalate could exercise some of its options at 2-cents early. Perhaps, given the pending deal with Axim Biotechnologies, both company's might stump up with some capital and subscribe to a separate options deal to reduce dilution and tighten the share registery. This fits within our thesis of a potential cornerstone investor (or two) joining the company in the near-term.
We have placed our bets with size. What we have disclosed in our posts is negligible to our total investment. If you think this company is over hyped, you have't seen anything yet. The best is yet to come. No trials have started. No pot products are sold. There's a lot of 'we're going to do this' right now, rather than 'we're doing this right now'. Wait until that story changes and watch what happens to the share price. Cheers -Trading For Millions https://tradingformillions.com/
IHL Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
