Imagine you’re playing poker and it’s a competitive table.

On one side, you have a big stompy bully with a fat stack and dumb shades. On the other, a dude with an expensive hat, an even fatter stack, and a couple of shiny bracelets that indicate he’s been around the circuit a time or two.

Then there’s you, with all the knowledge and practice and thoughts of greatness and self-belief and… $15 in chips.

Let’s be honest – nobody at that table is worried about you. You’re there to make the kitty bigger. You’re in the way. You’ll be gone soon. You don’t matter.

When all of a sudden, a sultry woman in mink, the kind of woman that makes a concrete statue sigh, walks through the door, takes one look at you, and drops $12 million in chips in front of you.

She whispers in your ear; “Show me what you can do, stud.”

Things are about to get interesting.

Well, if you’ll excuse the borderline sexist scenario, that’s basically what just happened to Lifestyle Delivery Systems.

Ol’ LDS, clunking along with its Cannastrips product, investors impatiently waiting for revenues to appear, with the stink of that 2015 market debut almost finally wafted out of the room, had played a couple of decent hands through the last year when all of a sudden a financing was announced.

And investors just charged at it.

Some naysayers may have thought the $10 million financing was ambitious when it was announced, but it not only filled quickly, it filled out like Anthony Michael Hall during the SNL years. It exploded like Donald Trump on espresso. It got taken out like a Russian journalist.

Okay, this is getting distasteful.

$10 million is nice, but $12 million is aces, especially when the company went to market on the back of a mere half million dollar raise back in the day, and thus it is that management now has a whopping seven figures to spend on whatever the hell it wants to.

LDS just became a threat to competitors, and at a time when direct competitor Vinergy Resources (VIN.C) is getting beaten up (through no fault of their own, but still).

Cannabis strips were a great idea in 2015, but now they’re a genuine product with some serious tech, and the race between Vinergy, LDS, and even Marapharm (MDM.C), to get a strip product to wide market reception sooner rather than later is heating up in 2017.

LDS is the first mover, but squandered much of that advantage early, with regulatory issues and business concept second guessing contributing to keep them business free until recently. They have a product that, according to some, needs work.

Vinergy looked in a great position to sweep LDS aside when it showed up, with a legacy Canadian pharma processing and development background, looking to drink the other guys’ milkshake with a product it says is way superior to LDS.

But Vinergy had a big deal in the Netherlands go sideways recently, an ultimately ‘no big deal’ situation that the market hasn’t been able to get beyond, so it has seen its share price slide far beyond where one might have assumed.

Marapharm has said it wants in on strips business, but hasn’t clarified how, or where, or to who as of yet.

They’re not alone. A Google search for cannabis strips shows others have emerged while the public companies dithered, with ChongsChoice, PureCure and Oakor now having brands on the market.

So the market is increasingly crowded, and first mover isn’t a thing anymore. Where does that leave our cannabis strips public players?

Vinergy has a ton of stuff on the go and appears oversold where it is. Marapharm also has many things going on and, at present, if strips never happened for them, I doubt they’d go all emo about it.

But Cannastrips is in an interesting position. They just became the bully at the table. That $12 million could buy ChongsChoice if it stuck its head up too far, or an Oakor, or any other minor player that stumbles upon interesting tech or branding or market share.

It can buy a truckload of strip machines to ramp up production, if it ever needs to do that, considering the CEO tells me one machine can supply millions of strips a day. It can market the crap out of itself. Or it can do nothing for several years and not run out of dough.

The market is drifting however. The investor base needs to see something definitive from LDS soon – a big jump into the retail space or a big plan to soak up some war chest dough. That it has bounced along for several months now is indicative of a company with good support, coiled for action when called upon.

The only question now is, will they be called upon soon? Or do we have more months of waiting before shit gets real?

Will Vinergy slide in and steal the show? Or will LDS storm the gates with their big box of bucks and take all the booty?

— Chris Parry

FULL DISCLOSURE: LDS and VIN are both Equity.Guru marketing clients. Don’t make us choose.


Written By:

Chris Parry

A multi-Webster Award winner for excellence in BC journalism, Parry is the founder and publisher of Equity.Guru, which he built with the specific plan to blend old school reporting with stock promotion, in a way that puts the emphasis on truth, high standards, and ethics. Parry is a veteran of TV, radio, and print, and consults with public companies to help them figure out their storylines, lay down achievable milestones, and improve their communication with shareholders, while also posting regular deep dive analysis of companies in the public spotlight.

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