I said it last week and it’s proving out; Golden Leaf Holdings (GLH.C), having learned its lesson from being too focused one one vertical over the past 18 months, is now looking to grow fast and furiously.
And, just like clockwork, today the company dropped another expansion bombshell.
GLH has signed a binding letter of agreement to acquire a “a cultivation licence and an extraction licence in Nevada from NevWa LLC, (doing business as Grassroots).”
NevWa’s cultivation and extraction license, based out of Sparks, Nevada, allows for the distribution and sale of products across the state of Nevada, including in Las Vegas and Reno. Medical marijuana is currently legal in Nevada, and the state’s recreational market is scheduled to launch in July 2017. Nevada’s medical market also enables reciprocity for patients, whereby patients from other states can legally use their medical marijuana cards in Nevada, opening the medical market to the state’s more than 40 million yearly visitors.
- March 22: Golden Leaf signs binding LOI to acquire Chalice Farms (OR)
- March 16: Golden Leaf signs binding LOI to acquire JuJu Joints (WA, OR, NV, CA, Canada).
- March 14: Golden Leaf signs binding LOI to acquire Medical Marihuana Group Corporation (Canada)
Don Robinson, CEO of GLH, commented, “We are proud to engage with Canaccord Genuity, the leading investment bank in the cannabis marketplace, to help fund our acquisition strategy..”
THE PROS AND CONS
Canaccord will have some raising to do, and GLH’s share price is not at the level you’d hope to get a bunch of fairly high-priced deals done. There is concern about dilution among some investors, which is fair, with 100 million shares already outstanding.
That said, the revenue the deals will be bringing in makes the company an instantly bankable deal with a far larger value than the current $30m market cap. That revenue also means the need for future financing should be greatly reduced.
I’ve spoken to several large holders of GLH stock that are way under water from when they got in (I’m among them), and can reveal the mood has switched in the last few weeks from what could only be described as poisonous a quarter ago, to ‘grumpy bear waking up from a spring nap’ now.
Which is good. At least, better.
If the share price can keep rolling upwards to beyond $0.40 before any financing is done, they’ll likely shift into ‘mildly bemused.’
GLH stock has shifted from as low as $0.285 two weeks ago to $0.355 today.
I like this forward progress. Real change can only be made one step at a time, and GLH has got some mo’. I’m holding.
— Chris Parry
FULL DISCLOSURE: The author owns GLH stock, and Golden Leaf is an Equity.Guru marketing client.