It’s not hard to see that the honeymoon is over for cannabis and hemp. Companies like Canopy Growth (WEED.T) are operating at 97 times revenue with no profit, leaving investors holding the bag as SP tumbles to compensate. As the industry corrects, investors are looking harder at fundamentals and as such, companies like Cronos Group (CRON.T) aren’t seeing much love, especially since its last financials, but hemp producers like Gaia Grow (GAIA.V) are setting up sustainable business models and with its upcoming maiden hemp harvest, is on track toward profitability. Wow, that’s a switch!
When it comes to fundamentals, Gaia has money in the bank from a CDN$4.0 million equity raise in the summer, 1500 acres of hemp in Alberta and a license application to grow cannabis in Northern Alberta. Unlike Canopy, Gaia has a reasonable if not ultra-low valuation of $11.0 million, Gaia has room to grow after its maiden hemp harvest and investors looking for a bargain with potential might want to put this company on their radar. The global industrial hemp market is expected to grow to USD$26.6 billion by 2025 at a CAGR of 34% and lean companies like Gaia are prepped to take a significant slice of the sector.
The next 12 months will be important for Gaia as it markets its maiden hemp harvest, advances it cannabis license application and prepares for its next planting. So far, the company has remained tight and focused with both insider and institutional support, all that remains is execution of its mandate. Does Gaia have what it takes to go the distance and become the solid investment vehicle cannabis investors are hoping for?
Equity.Guru’s own Gaalen Engen spoke with Frederick Pels, co-founder, president and director of Gaia Grow to get a good look at the company, its upcoming maiden hemp harvest and what investors can expect in 2020. Listen in!