Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) has continued to light up the scoreboard as a smaller growth/beta play in the rapidly growing Canadian cannabis space over recent months. By some measures, one might even call this stock the most explosive play in that market segment over the past 10 weeks, given the stock’s huge percentage gains and massive growth in trading liquidity, with shares rising by nearly a factor of six since the end of October of last year on nearly a 400% growth in average trading volume in that time.
And the money keeps flowing into this juggernaut. To wit: the company just announced that it has entered into a binding term sheet with a single Canadian institutional accredited investor under which the Investor has agreed, subject to certain customary conditions, to purchase 3,000,000 units of the Company at a price of $5.00 per Unit for total gross proceeds of $15,000,000. According to the release, “the securities forming the Units will be qualified under a shelf prospectus supplement to be filed by Emerald prior to closing.”
Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) trumpets itself as a licensed producer of medical marijuana under the Access to Cannabis for Medical Purposes Regulations, which allows the company to produce and sell medical marijuana and cannabis oils to clients and other licensed producers.
Individuals may become clients of the company by registering with the company through its secure online portal or via telephone after the individual has received a medical document signed by a licensed health care practitioner setting out the daily quantity of dried marijuana, in grams, that the practitioner authorized for the person.
According to company materials, “Emerald Health Therapeutics, Inc. (TSXV:EMH) (OTCQX:EMHTF) operates through Emerald Health Botanicals Inc., a wholly owned subsidiary and Licensed Producer under the Access to Cannabis for Medical Purposes Regulations. Botanicals is authorized to produce and sell both dried medical cannabis flower and medical cannabis oil in Canada. Botanicals currently operates an indoor facility in Victoria, BC, and is progressing on expansion plans for a 32-acre property in Metro Vancouver and a partnership with Village Farms, called Pure Sunfarms, utilizing a 25-acre existing greenhouse complex in Delta, BC. Botanicals is one of Canada’s most medically focused licensed producers, with a team highly experienced in life sciences product development and large-scale agribusiness. Its vision is to be a leading provider of cannabis products through its production capabilities, proprietary genetics, value-added products and branding, and superb customer experience. Emerald Health Therapeutics is associated with the Emerald Health group, which comprises multiple companies advancing diverse botanical, nutraceutical and pharmaceutical products that may provide wellness and medical benefits by interacting with the body’s endocannabinoid system.”
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As noted above, EMHTF shares have been powering higher over the past 2-3 months, and now that the US legislative agenda is falling into question with regard to marijuana, the stock may even see greater interest as a Canadian play. The company just announced another major institutional investment deal to close out last, continuing this theme of demand for exposure.
According to the release, “The Investor has also agreed to purchase from Emerald Health Sciences Inc., a control person of the Company, 2,000,000 Common Shares held by Sciences at a price of $5.00 per share. The Secondary Sale will close concurrently with the closing of the Offering. The Company intends to use the net proceeds of the Offering for its production and R&D-related growth plans, working capital and general corporate purposes.”
Traders will note 85% piled on for shareholders of the stock during the trailing month. This is emblematic of the stock. EMHTF has a track record that includes a number of dramatic bounces. What’s more, the stock has seen interest climb, with an increase in recent trading volume of just shy of 380% beyond its prior sustained average level.
Currently trading at a market capitalization of $599.1M, EMHTF has about $28M in cash on the books, which is balanced by roughly $14M in total current liabilities. The company has pulled in about $470K in TTM revenues. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $EMHTF 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 $EMHTF, either long or short, and we have not been compensated for this article.