Cannabis Wheaton Income Corp (OTCMKTS:CBWTF) is consolidating recent action in a lateral pattern that measures out well as a symmetric triangle underway dominating the action over the past month. The stock is holding support along the 20-day exponential moving average over the past week with a palpable potential to retest the action along recent highs in the $2.25-2.35 area.
One of the key ingredients fueling success for the company has been its ability and willingness to partner with other central players in the space. As a case in point, the company recently announced that it has entered into a binding interim supply agreement, pursuant to which Wheaton will purchase cannabis, including dried flower and cannabis oil from Aphria Inc. (OTCQB:APHQF) for distribution to federally legal international jurisdictions.
Cannabis Wheaton Income Corp (OTCMKTS:CBWTF) trumpets itself as an investment company that seeks to provide investor returns through streams and capital appreciation in the Canadian cannabis industry.
The company operates as a cannabis streaming company. It provides funding for cannabis facility expansions, operations, and initial construction in exchange for minority equity interests and a portion of the cultivation production.
The company was formerly known as Knightswood Financial Corp. and changed its name to Cannabis Wheaton Income Corp. in May 2017. Cannabis Wheaton Income Corp. was incorporated in 1987 and is based in Vancouver, Canada.
According to company materials, “Wheaton Income is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.”
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As noted above, the stock has been a strong performer over the recent months, but has been consolidating that trend in a constructive manner, holding key supports and potentially signaling the technical chops to retest or break recent highs. Part of this story has been about relationships and synergies, with the company’s latest deal reinforcing that theme.
Hugo Alves, President of Wheaton Income, stated, “As we’ve demonstrated through our previously announced distribution partnerships, we are focused on building strategic distribution channels for Wheaton’s own cannabis products and those of our streaming partners. As our distribution platform starts to take shape domestically we have been actively exploring high margin international channels in emerging federally legal jurisdictions. We are thrilled to be partnering with an industry leader such as Aphria as we begin to execute our international strategy. This supply arrangement enables us to deploy product into international jurisdictions that are of interest to us and gain brand presence and market share in those markets on an accelerated timeline. With over 800 million people residing throughout legalized cannabis jurisdictions globally and an addressable global medical market size expected to exceed $30 billion by 2021, this agreement with Aphria allows us to meaningfully participate in international supply opportunities 12 to 18 months ahead of schedule as we continue to develop our own domestic production platform. We view this as an accretive arrangement for both Wheaton and Aphria and look forward to working with Vic and his team.”
Recent action has seen 27% tacked on to share pricing for the listing in the past month. This is emblematic of the stock. CBWTF has evidenced sudden upward volatility on many prior occasions. Furthermore, the listing has seen a growing influx of trading interest, with the stock’s recent average trading volume running exceeding 170% above its longer-run average levels.
At this time, carrying a capital value in the market of $371.5M, CBWTF has a significant war chest ($26.1M) of cash on the books, which compares with virtually no total current liabilities. CBWTF is pulling in trailing 12-month revenues of $51K. However, the company is seeing sharp declines on the top-line on a quarterly y/y basis. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $CBWTF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $CBWTF, either long or short, and we have not been compensated for this article.