CEO Dan Kriznic’s Invictus MD Strategies (IMH.V) announced a shed full of news last week, and it was all amazing. He was slapping homers like Steroidy Sammy Sosa.
First, one of the late stage applicants Invictus arranged a buy-in deal with a short time ago managed to get their production license, elevating IMH into an elite league in the Canadian cannabis sector.
Said a news release Thursday, which also announced the company’s graduation to the TSX Venture exchange:
We now have 250 acres of cultivation space that stretches from Alberta to Ontario. Alberta has low cost of production as a result of low energy and water costs. The property is friendly to building as many square feet as required based on the significant demand. The CEO of Acreage Pharms is a serial entrepreneur and has been successful in previous ventures. He will be a key addition to the Invictus MD team.
The details of the option taken on Acreage were revealed in an earlier news release:
The Company now has 30 days to exercise its option under the definitive option agreement. The terms of this agreement include an issuance of 21 million shares of the Company, $4 million in cash to the current shareholders of Acreage Pharms and 3 million warrants exercisable at $1.50 per share. The Company has also committed $6 million from its treasury for building expansion at Acreage Pharms. The expansion includes a 30,000 square foot floor plate plus mezzanine within the existing 60,000 square foot secured perimeter located on the 150 acres in Edson, Alberta.
Not only is this deal cheap, but let’s be clear here: Invictus has all the elements needed to complete the deal in it’s bank account presently. No raise needed. They’re full steam ahead.
There’s not a lot of information about Acreage online right now, but that’s sure to change soon. Job #1, it appears, is to lock down a master grower.
Acreage Pharms – Peers, AB
$80,000 a year
We are a small, family owned, government licenced medical cannabis operation, near Peers, Alberta, looking to fill the position of Master Grower.
- Responsibilities include
- Overseeing and managing multiple grow rooms.
- Adhering to Good Manufacturing Process, Security Protocols, and the ACMPR.
- Using BioTrackTHC Plant management software to keep track and manage plants.
- Staying on top of developments in Cannabis science and industry
We require formal education relating to horticulture, experience in a greenhouse or hydroponics, and a clean criminal record.
Preference will be given to those with an understanding of the ACMPR, and Cannabis experience.
What this means to Invictus shareholders is obvious and, indeed, played out on the day of the announcement, as the company took off from as low as $1.32 the day before to a high of $1.90 before settling in back to $1.74, a 27% jump all told.
But what it means for the late stage applicant business is immense. There’s been a flood of shells and small players making option deals with LSA’s over the past few weeks, with scenes reminiscent of late 2014, when a genuine gold rush was playing out for anything with a green tinge.
Companies ranging from the moneybags stuffkers at Invictus to long-struggling little Matica (MMJ.C) have made their runs at targets aplenty as investors begin to get the idea that a low budget run at a maybe may result in a market cap like the $66m now hovering over IMH.
The stock is currently halted as it’s jumping from the CSE to the TSX Venture Monday, and that’s going to come with some rules attached.
While the CSE is happy for companies to do business in whatever sectors they want (within reason – I’ve heard kidnapping in the Guadalajara is frowned upon, at least without permits), the Venture has told Invictus it will only be welcome on the junior exchange if it agrees to do business in more limited form than the vertical integrator is used to.
In connection with the TSXV listing, the Company has made an undertaking to the TSXV that no foreign operations will be undertaken by Invictus or any of Invictus’ subsidiaries until the approval of the TSXV for such operations is received. Invictus will undertake to the TSXV that, for so long as any securities of Invictus are listed on the TSXV, Invictus and its subsidiaries will only conduct the business of the production, sale and distribution of medicinal marijuana in Canada pursuant to one or more licenses issued by Health Canada in accordance with applicable law, unless prior approval is obtained from the TSXV.
In other words, that whole vertical integration thing? And the international scope that the company has long suggested is it’s future? Yeah. No more of that unless Drunk Uncle TSX gives the nod.
To be clear, many current Venture weed players are doing business internationally without a problem from the TSX. What they’re really getting at is they want assurances IMH won’t go taking out grow licenses in Nevada or paying for grow construction in Spokane.
Do a deal with licensed companies in Germany? Fine. Consult with folks in Australia? No problem. Just don’t get your doors kicked in in Albuquerque.
Though this will probably have to move from Invictus’ website:
Our core focus is to identify and invest in companies operating in emerging markets. We recognize that through technological advancements the world is getting smaller and various opportunities exist to assist and enter into these new markets.
BuEither way, that’s a small price to pay for being a major player in the Canadian weedspace as of… now.
Congratulations Invictus, Kriznic, and his team… and to those investors who heeded the call when we talked about the company last year, back when it had a $1.9 million market cap and $4m cash in hand. If you rode it from there, congratulations on your THIRTY BAGGER.
— Chris Parry
FULL DISCLOSURE: Invictus MD Strategies is an Equity.Guru marketing client. and we’re damn proud of it.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.