Well, the company has played their cards right so far from a business standpoint and is now clearly in the prime position to be the dominant market leader throughout Oceania and Southeast Asia coming into 2020. However, they have failed in playing the most essential card, which is focusing on investor relations; releasing quality announcements that excite prospective investors and having a solid digital presence that markets the company effectively.
The fundamental driving force behind the success of most small-cap companies lies not in a strong earnings report, but rather through the creation of a compelling and effective investor engagement strategy that capitalises on the digital medium and utilises announcements to generate excitement, promote discourse and provide an engaging experience for retail investors. The ASX is a remarkable exchange. Many come to the assumption that the ASX is an underperforming market with limited opportunity, however, the true potential lies within companies that have embraced the new age of retail investment and strategically focused on engaging investors this way.
There are many potential ASX announcements that THC could release that would promote the company. An announcement highlighting the business' success and revenue growth from Endoca in NZ, or the Crystal Mountain business in North America, or an announcement on prospective offtake agreements they have organised for the shipments in Q1 2020, or cultivation figures, or R&D progress or business ties in Asia. They unwisely decided to group almost all these developments into the one forgettable announcement in the quarterly update on 31 October rather than intelligently releasing announcements that focus on these achievements and effectively market the company to investors.
It seems the company are laggards, believing that announcements of license grants are enough to spark investor interest, but it isn't 2017 anymore. Investors aren't interested in license grants and are only going to respond positively to a company that can highlight strong revenue growth and substantial business ties through effective marketisation. It pains me to see how little THC embraces digital technology to drive the company forward. Their website looks like it was built by a 12-year-old, they have no presence on social media platforms, and they think paying out to do sit-down interviews in front of a green screen with YouTube channels that shill any company is the way forward instead.
I still have hope though, what they lack in nuance in marketing they make up for in effective business management that has resulted in them becoming the most developed company in the cannabis industry. I just hope they realise soon that this alone won't stimulate the share price, and can learn to see companies through the eyes of the retail investor instead.
THC Price at posting:
42.5¢ Sentiment: Buy Disclosure: Held
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