A bumper crop of weed news: Emblem, Lifestyle Delivery Systems, Cannaroyalty et al

Another day, another discovery about the amazing powers of cannabis: Scientists at the BC Centre on Substance Use have determined that smoking pot helps to cure crack addiction.

If we wait long enough, cannabis is going to cure impatience, impotence, and idiocy.

At Equity Guru, we like weed. By that we mean, we like the smell of it, because we like the smell of money.

This week there has been a slew of news from the some of the companies we follow.

Let’s do a quick round up.


Lifestyle Delivery Systems (LDS.C) announced that it has closed a private placement – selling 14.2 million at $.50 per unit for gross proceeds of $7.1 million.  Each unit comes with a full warrant entitling the holder to buy another share at a price of $.75 for the next year.

LDS makes infused strips (similar to breath strips) that are better for the lungs than smoking and also makes it easier to monitor the dosage and control the purity of the product.

The company is planning to grow medicinal ingredients.  This means quality control from seed to sale.

Ambitious young companies need capital to grow – so this is a good thing.


Emblem Corp (EMC.V) intends to break ground in Q3 2017 on the first of three state-of-the-art 100,000 sq. ft. production facilities.  It will take about 14 months to build them.  Total aggregate production capacity is expected to exceed 70,000 kilograms per year.

There is an interesting energy angle here:  Natural gas infrastructure will allow Emblem to disconnect from the electrical grid. Its objective is to become a low-cost “closed box” cannabis producer.

Premium dried flower production requires up-front investment in environmental control systems. Emblem’s closed box architecture is expected to result in lower operating costs.

Emblem currently has about $33 million cash on hand and another $34 million of “in-the-money” warrants – a portion of which are callable.


CannaRoyalty (CRZ.C) released Q1 financial and operational results for the period ended March 31, 2017.

The company increased revenues from zero to $301,111, realising a net loss of about $2 million – 15% lower than the net loss from Q1, 2016. CRZ now has the right to a 30% royalty stream on Rich Extracts’ gross revenues – forever.

The company also acquired a 20% equity interest in the biotech company Anandia – which is focused on testing and developing safe strains of medical cannabis.

CRZ ended Q1 with cash and cash equivalents of about $12 million.


Golden Leaf Holdings (GLH.C)  announced Q1, 2017 Oregon and Washington sales of about $6 million – 70% higher than Q4 2016.

GLH is executing a targeted acquisition strategy by signing with Chalice LLC, the vape company JuJu Joints, Medical Marihuana Group Corp and NevWa.

The nominee for the Chairman of the Board is Gary Yeoman, who was CEO of Altus Group, a TSX-listed real estate firm that increased revenues from $75 million to about $325 million during his tenure.

GLH expects to increase its margins when it begins making oils and edible products in its new Eugene, Oregon production facility.


Invictus MD (IMH.V) provided a corporate update after its $25 million financing.

“We now have the largest land package in Canada for building cultivation facilities as demand increases and we will continue the disciplined but agile execution of our business strategy,” stated Executive Chairman Dan Kriznic.

Invictus MD is focused on three verticals:  Licensed Producers, Fertilizer and Nutrients, and Cannabis Data and Delivery.

The company continues to state its objectives clearly and meet them.


ABcann (ABCN.V) have agreed to partner with Cannabis Wheaton (CW) on the construction of 50,000 square feet of cultivation space. CW will invest $30 million in ABcann by subscribing for $15 million shares at $2.25.

ABcann is currently building a 100,000 square foot facility. In return for funding the expansion, CW will get 50% of the proceeds of future sales from cannabis produced in the Expansion Production Area.

To make the partnership stick, ABcann needs Health Canada approvals and both parties must agree on construction budgets and timelines.


Quadron Cannatech (QCC.CSE) has received a $200,000 order for its cannabis oil vape pens and cartridges.

Cannabis users are trending away from dried leaf to oil-based products which are ingested using hardware like vapor pens.

Vape pens create recurring revenues from sales of the cartridges.  QCC also has an automated extraction and processing business. The stated objective is for these two verticals to grow revenue in tandem.

After full legalization, according to a Mackie Research, the growth of cannabis oil consumption in Canada is expected to expand 198,000% in the next three years.

No, we did not accidentally lean on the “zero” key.

That is the projection:  198,000%.

The 30-month study of 122 crack-heads discovered that they were 89% more likely to reduce their crack use after using cannabis, compared with those not using cannabis.

No studies have been conducted to determine whether smoking crack can help reduce cannabis dependency. But since nobody’s talking about legalizing crack – it’s a riddle – not an investment issue.

FULL DISCLOSURE:  All the companies in this news round-up are Equity Guru marketing clients.

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