GTEC Holdings (GTEC.V) is on track to become an important figure in Canada’s post-legalization cannabis market and despite announcing Borat’s appointment as chairman on Twitter in commemoration of All-Fool’s Day, the company is serious about hitting its targets.
GTEC Announces Appointment of Borat Sagdiyev as Chairman of the Board and CEO, Ticker Symbol Change to BRAT and Relocates Headquarters to Kazakhstan – GTEC Holdings https://t.co/vBoa2pWWWS
— GTEC Holdings (TSXV: GTEC) (@gtec_holdings) April 1, 2019
GTEC CEO, Norton Singhavon, brought the company public in June 2018 with an eye on the burgeoning craft cannabis market, knowing that not everyone wanted to buy the Carling Black Label or the Pabst Blue Ribbon of bud.
The vertically integrated boutique cannabis company has six brands of premium cannabis in its pipeline and a market presence in four Canadian provinces.
Grey Bruce Farms, located in Kincaid, Ontario and a wholly-owned subsidiary of GTEC is in the midst of building a 15,000 square foot cultivation facility for high-grade designer cannabis.
In the prairies, GTEC’s subsidiary, Alberta Craft Cannabis, brought in its first harvest for the year and looks to exceed production expectations for 2019.
The company also has 75% ownership of GreenTec Retail in Saskatchewan, where it is building a brick and mortar presence in Canada’s flattest province.
Meanwhile, over the mountains…
GTEC’s soon-to-be flagship production facility in Kelowna is anticipated to be complete and ready to grow 20,000 square feet of craft cannabis by July this year with room to grow into a full 80,000 square feet of production space.
Also, the company’s wholly-owned subsidiary, Tumbleweed Farms, hit a major milestone recently when the company submitted its Affirmation of Readiness and Video Evidence Package back in the middle of the month.
Vendors of Tumbleweed were rewarded for their success with the issuance of $2.25 million worth of shares in GTEC at approximately $0.60 per share for a total of 3.76 million common shares.
Shares involved in transaction are subject to a four-month hold from the date of issue.
Once the facility in Vernon is finished, GTEC’s subsidiaries could be producing over 12,700 pounds of premium weed annually.
The company also continues to build a comparable retail segment to compliment its production side and recently announced completing due diligence on an unnamed private company (PrivCo) with two retail locations located in Vancouver, BC.
Pursuant to the agreement announced in November last year, GreenTec Retail Ventures, a wholly-owned subsidiary of GTEC, will acquire all the assets of PrivCo, including the two dispensaries.
As well, GTEC is in the midst of negotiating with a society (SocietyCo) to purchase its assets and increase the company’s presence in Vancouver with an additional cannabis retail store and cannabis consultation clinic.
Both of these acquisition remain subject to regulatory approval by the TSX Venture Exchange.
GTEC took a hit just like everybody else in cannabis when the sector’s wildly optimistic potential came up against the hard realities of legalization.
However, GTEC seems to be on a solid upward mend where others are not.
This can only be attributed to GTEC’s frugal and studied approach to the business of cannabis because in the end, once the smoke disappears, it all comes down to fundamentals.
It is no wonder that institutional investors are taking notice as well with Sprott Capital upping a recent brokered private placement offering by a full 25% to $12.5 million.
The 2nd tranche of the PP closed successfully and will provide the necessary financial fuel for GTEC to power the next 12 months.
With a market cap of just over $82 million, and a relatively tight share count, GTEC is positioning itself to secure a sustainable and profitable craft niche in Canada’s multi-billion-dollar legal cannabis sector.
This comparatively down-to-earth valuation leaves lots of room for investors to ride GTEC’s growth and may prove to be a good candidate for not only the short term, but a value investment to pass on to your kids.
Shares climbed $0.04 to $0.70 per share by end of trading.
GTEC currently has 117,384,250 issued and outstanding shares for a market cap of $82.1 million.
–Gaalen Engen
Full Disclosure: GTEC Holdings is an Equity.Guru marketing client.