The Wednesday Morning Watchlist: Potential Bottoming Action in Cannabis Stocks ($CRLBF, $ORHOF, $TGODF)
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Cresco Labs Inc (OTCMKTS:CRLBF) has been on the M&A hunt, putting together a deal to acquire another stock we are going to look at today, Origin Labs (OTC:ORHOF).

The company recently had to manage a key divestiture in Floriday properties to appease regulators, with that process impacting shares and generating some weakness over recent weeks.

CRESCO LABS ORD (OTCMKTS:CRLBF) manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products. The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand.

To help boost the action, the company just unveiled Sunnyside, a new dispensary brand created to accelerate industry growth and shift people’s expectations and perceptions around shopping for cannabis from intimidation and doubt to curiosity and acceptance through a new retail and marketing approach.

According to the release, “Sunnyside is more than a dispensary—it’s a wellness-based retailer offering a holistic experience for anyone who considers, or would consider, cannabis to be an integral part of their personal wellness program. It aims to educate today’s diverse users on cannabis’ many positive benefits and provides one of the widest ranges of cannabis brands. A more sophisticated and familiar shopping destination that combines high-end design from healthcare, retail and hospitality, Sunnyside* elevates the value dispensaries can add to a community with a bright, welcoming aesthetic and convenient shopping whether in-store or online.”

Shares are currently testing key support in the $8/share level. But we are seeing some promising tape action so far in this young week, and it may be worth a closer look.

 

CannaRoyalty Corp (OTCMKTS:ORHOF) is showing some interesting action in recent days, with the stock moving higher out of a short-term bottoming range following a recent slide.

The story here is clearly entwined with the M&A process involving Cresco Labs (OTC: CRLBF), as noted above.

CannaRoyalty Corp (OTCMKTS:ORHOF) is a private equity firm specializing in acquisitions. The firm invests in the legal cannabis sector with a focus on research and intellectual property, consumer brands, and industry infrastructure. It seeks to invest in the United States and Canada. CannaRoyalty Corp. is headquartered in Ottawa, Canada. Origin House is a growing cannabis products and brands company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands.

The Company’s foundation is in California, the world’s largest regulated cannabis market, where it delivers over 130 branded cannabis products to the majority of licensed dispensaries.

Origin House’s brand development platform is operated out of five licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. The Company is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke.

The latest in terms of catalysts is the company’s recent announcement that it has divested its 5.1% equity interest in Alternative Medical Enterprises LLC for total consideration of US$6 Million.

According to the release, as Cresco Labs Inc. is prohibited under state law from acquiring additional positions in the Florida market, this divestment was a pre-closing condition to the Company’s previously announced plan of arrangement pursuant to which Cresco has agreed to acquire all of the issued and outstanding shares of Origin House.

As far as technicals, Tuesday was a big day, with the stock ramping off the lows in a sharp move following a hold of key support in the $5/share area. That marks a low that follows about a 50% decline since April.

 

 

Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF) has been languishing for some time in a recent downward trend but recently found a significant burst higher off of a pivot low this week.

That strength comes at key support that hit right in the vicinity of the $2/share level, which represents key support for the stock.

To help further define the action, the company just announced that its flagship Valleyfield, QC facility has received its organic certification from Pro-Cert, an internationally recognized leader in organic certification.

According to the release, “Once completed, TGOD’s Valleyfield facility is going to be the world’s largest organic cannabis facility at over 1.3 million square feet. This Pro-Cert recognition adds another certification to the Company’s portfolio, in addition to TGOD’s already certified organic growing facilities in Canada and Europe, and shows TGOD’s commitment to cement its position as the leading organic cannabis brand globally.”

Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF) is an R&D company licensed under the Access to Cannabis for Medical Purposes Regulations to cultivate medical cannabis. The Company carries out its principal activities producing cannabis from its facilities in Ancaster, Ont., pursuant to the provisions of the ACMPR and the Controlled Drugs and Substances Act (Canada) and its regulations.

The company grows high quality, organic cannabis with sustainable, all-natural principles. TGOD’s products are laboratory tested to ensure patients have access to a standardized, safe and consistent product. TGOD has a funded capacity of 116,000 kg and is building 970,000 sq. ft. of cultivation facilities in Ontario and Quebec. The company has developed a strategic partnership with Aurora Cannabis Inc. (TSX:ACB) whereby Aurora has invested approximately C$78.1 million for an approximate 17.5% stake in TGOD.

 

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