Since TransCanna Holdings (TCAN.C) hit the public market at $0.95 a share on Jan. 9, 2018, investors have driven up SP approximately 35% on news flow. So what’s got investors so excited?
Temporary state licensing
TransCanna announced on Friday that its non-profit entity, TCM Distribution (TCMD), received its temporary distributor license within California, a cannabis market estimated to be worth $5.1 billion by the end of 2019.
TransCanna’s application for a permanent license in the Golden State was submitted on Dec. 31, 2018 and remains under review.
This bodes well for the company, considering it has three conditional agreements in place with unnamed licensed operators to distribute their cannabis-related products pending state licensing.
Facility permits
On Nov. 23, 2018, the City of Adelanto granted TCMD formal approval to transfer the company’s medical marijuana transportation & distribution permit, as originally issued on Dec. 5, 2017, to an existing facility.
The facility is roughly 400 square feet, but it sits on property where the current landlord intends to construct two 20,000 square foot cannabis-related facilities.
The property’s landlord has offered to lease one of these facilities to TCMD, and the company has entered into negotiations with the landlord to make this offer a reality.
Once completed, these facilities will have all the necessary power and electricity for TCMD’s operations.
As such, TCMD is no longer seeking to build its own facility in Adelanto.
This move will save TCMD the $100,000 it was originally going to budget for its portion of the construction of a 10,000 square foot purpose-built space and give TransCanna the opportunity to earmark more money for business development.
James Pakulis, TransCanna’s CEO and owner of TCMD, illustrated another bonus to leasing an existing space as opposed to building:
“The transfer of the Adelanto permit to an existing facility with the possibility of leasing a twenty thousand square foot facility allows us to expedite the process of getting an operational footprint in Southern California. We look forward to completing our negotiations with the existing landlord and reaching a favorable outcome.”
Moving onto the Frankfurt Exchange
TransCanna kept the markets smiling today when the company announced it had received approval to list on Germany’s Frankfurt Exchange.
The Frankfurt Exchange plays host to over 250 international trading institutions and is the third most liquid stock exchange on the planet next to NASDAQ and NYSE. In fact, investors directly connected to the exchange make up approximately 35% of the world’s investment capital.
This will give TransCanna the added access to the capital it needs to reach its milestones.
Also in today’s news, the company announced it had appointed Arni Johannson to its board to fill the seat vacated by the resignation of Greg Ball, who will continue on as company CFO.
According to his Bloomberg profile, Johannson is a 28-plus-year veteran of the Canadian capital markets. Among his many titles, he served as an independent director of Mega Uranium (MGA.T) since 2005 as well as president and CEO of Palisades Ventures since 2014.
Jim Pakulis, CEO of TransCanna, commented on how the listing and appointment would impact company shareholders:
“We’re excited with the ability to increase our shareholder base by being able to trade TransCanna on the Frankfurt Exchange. We’re also very pleased that Arni has agreed to join the board and assist in TransCanna’s growth. His working knowledge of small, emerging publicly traded companies is arguably second to none.”
The company also picked this time to announce it had issued to directors and consultants, an aggregate of 219,000 options exercisable at CAD$1.37 for a period of 24 months.
What does this mean?
TransCanna has left the blocks and is definitely in the race, but it must secure its state-wide license in a timely manner and negotiate a prudent deal for the expanded facility.
If it can execute on its conditional agreements and continue to access financing, which has now been made easier with the Frankfurt listing, the company has an opportunity to instill itself as a primary presence in a nascent multi-billion-dollar legal California cannabis industry.
Today is more of the same as share price continues to climb, reaching $1.44 by afternoon trading.
Currently TransCanna has 16,995,654 issued and outstanding shares with a market cap of $23.2 million.
–Gaalen Engen
Full Disclosure: TransCanna Holdings is an Equity.Guru marketing client.
According to the collective knowledge gathered by Arcview Market Research and BDS Analytics, legal marijuana markets around the globe are prepared to grow at exponential rates over the next few years. From Germany to Canada, the marijuana industry will be one of the fastest growing sectors over the next few years. According to the two market research firms, “Arcview and BDS Analytics estimate that marijuana sales in Germany last year totaled only around $9 million. By 2022, though, this figure is projected to skyrocket to close to $1.6 billion.”