Massive pent-up demand has created a multi-billion-dollar market just waiting to see the light of day. Thanks to new regulations in the USA and Canada, investors are poised to stake their claim on the billions that are flowing through the fastest-growing new industry in the Americas.
Cowen, a leading investment firm, predicts U.S. sales will reach $47 billion per year within a decade and $75 billion by 2030. Deloitte, which has been closely following the Canadian market, forecasts $7.7 billion sales in Canada by next year. That’s just for direct sales and taxes. When Deloitte considered ancillaries like tourism, security, testing labs, infused products, and licensing it reached a $22 billion total.
In fact, because the legalization phenomenon is spreading so rapidly, investors in the next few years may do even better than those who already profited on Canada’s medical MJ stocks.
That’s saying a lot. Because the gains on medical MJ stocks so far, from their market debuts to the present are awesome… Aphria is up 1,167%, Canopy Growth 1,042%, Aurora Cannabis 1,492%, CannTrust Holdings 267%, and Organigram 1,657%.
Those gains came from a medical MJ market that serves a mere 300,000 registered patients. But the adult-use market ahead could see 10 million new customers emerge in Canada alone the next year.
In the US, thanks to a wave of state legalizations for medical use, ProCon.org estimates there are 3.5 million medical MJ patients. Thirty states have legalized marijuana in some form so far, and eight have legalized adult recreational use.
This is MJ investing 2.0, and it’s an opportunity you should not miss.
Billionaire Investors Are Already In
Billionaire investor George Soros played a large role in the legalization of marijuana in Colorado and Washington, he also participated in the legal commercialization of cannabis in Uruguay. Soros and Sean Parker were very active in backing the campaign to Pass Proposition 64, which lead to California legalizing marijuana.
PayPal founder Peter Thiel has been bullish on MJ for a long time. Founders Fund, which Thiel manages, became the first institutional investor in the US to invest in a MJ stock.
How to Play the Coming Cannabis Boom
All bets are that the bill to legalize adult-use may be on Prime Minister Justin Trudeau’s desk for signature within days—as it has now been CONFIRMED that it will go into law on Oct. 17, 2018.
But if you hope to make the most of this opportunity, you should realize there’s a new twist. As the market opens up to millions of new customers, very few companies are in the right spot to deliver.
None is in a better position now than the company anticipated to be Canada’s next cannabis unicorn…
It’s Simple—Invictus Is Ready NOW, The Others Aren’t
That alone makes it a prime candidate for investors looking for strong upside potential. But there’s an important point investors should consider very carefully first—especially for Canadian MJ companies. Canada regulates which companies receive licenses to grow MJ very stringently. It has created a bottleneck in supply, and frankly even several of the best companies now serving the medical MJ market are not likely going to be ready to meet the huge increase in demand when the adult use market opens up.
But Invictus is ready, and that makes it stand out from the pack. Because, surprisingly, most companies simply are not in position to make the most of this opportunity.
For instance, Organigram, one of the largest suppliers has doubled its inventory to 8 million grams recently, but the company already has contracts with New Brunswick and PEI provinces for 6 million grams—leaving hardly any surplus to meet the new adult market. Aphria, another of the giants, announced it is leaving the wholesale market. In fact, it appears to have less supply than it needs to meet existing contracts.
Of course the newcomers are lining up, but that’s not where the smart money should head now. It has to do with timing…
The Reality No One Wants to Tell You—Means Invictus Has An Unbeatable Advantage
Invictus is anticipated to have a one-year head start.
And the worst thing of all for those companies that are starting behind is that there is likely nothing, NOTHING, they can do to close the gap. No amount of land, investment, or know-how can help them, because the Canadian government controls the gate.
That’s why Invictus is the company to watch. This is happening because licenses to grow marijuana must be approved by Health Canada. You can’t plant a single bed of crops until that license is granted. And investors aren’t eager to lay down a lot of money on buildings, irrigation, lighting and security before approval either.
This has created a giant bottleneck that works in Invictus’ favor.
So far, Canada has only approved 109 companies as licensed producers (LP’s) and sellers. Invictus is one of Canada’s first 50 LP’s.
But to understand this opportunity, to see how inadequate Canada’s LPS are to meet demand that is coming, look at Colorado where there are 690 licensed growers for a single state.
Or to compare nation to nation, how about this: Marijuana Business Daily estimates that the US has 2,500 to 3,500 wholesale marijuana cultivators nationally. Canada, 109, looks pretty dismal doesn’t it?
Actually, the situation in Canada is even worse than those numbers make it seem. Almost a third of those LPs aren’t actually up and running yet.
There aren’t 109 growers lined up and waiting for this new market to unfold!
That’s because among the 109 licensed producers that currently have the ability to cultivate and sell medical marijuana as of right now, 26 just got their approvals this year. Five of them occurred back in January and could actually deliver product early next year. But most of these new licensees were approved in March, April, May and June. It will be next summer before they try to wedge their way into a market that is already staked out.
It is the only one of the original 50 LPs undertaking an expansion on a scale that is dedicated solely to the coming adult MJ market.
A Chance to Grab Market Share Is a Chance to Keep It
This timing is a huge gift to Invictus. The law is going into effect and new suppliers aren’t ready, most old suppliers are still dedicated to serving the medical MJ market.
This means that for the next year, Invictus MD (OTC: IVITF) (TSXV: GENE) has a wide-open window establish its shelf space in Canada’s MJ dispensaries and take a front-of-the line position in all of Canada’s distribution networks.
In many industries, being first means the opportunity to establish a market-leading brand. That is not an issue in the MJ market. Consumers look for certain strains, which may be offered by multiple growers. Or they substitute a similar product.
But at the business-to-business level, establishing a company reputation early is worth a lot.
Invictus MD (OTC: IVITF) (TSXV: GENE) will have a whole year to capture shelf space and reliably keep it filled. A whole year to establish itself as a company to trust. A whole year to lock down valuable distribution rights and relationships.
Every one of the 26 new companies that were licensed in the past six months is losing this chance to become a familiar ally to the stores and distributors that will sell MJ.
Invictus Has Its Foot In the Door Now, Massive Expansion Will Blow It Wide Open Later
Even when the late comers arrive sometime next year, Invictus will remain ahead of the pack because it is expanding its growing space so rapidly.
In May, Health Canada awarded Invictus’ Acreage Pharms Ltd. operation a sales license under the Access to Cannabis for Medical Purposes Regulations (ACMPR). The license went into effect on May 18, 2018.
But its future plans are nothing less than amazing, too. Invictus’ current growing space is 99,200 square feet. By the end of next year, Invictus plans to expand its growing space to include 824,200 square feet spread over five different locations.
By weight, Invictus’ capacity is on a tear… ready to make a rapid increase from just under 4,000 kilos of MJ at current capacity to almost 91,000 kilos by the end of next year.
Growth Plan Without Growing Pains at Invictus
Invictus’ anticipates having five operating farms in development and its timeline is remarkable.
This is a rapid ramp up:
Acreage Pharms—located in Alberta is an existing facility. The Acreage Pharms supplies strains to Canopy Growth. It created that relationship early in the medical MJ market to enable Invictus to get certain hard to access strains, which Canopy supplied.
- Phase 1 and Phase 2 buildings onsite enclose 6,600 sq. ft. and 33,000 sq. ft. These are fully funded.
- The Phase 3 building, with another 80,000 sq. ft. is also 100% funded and will be ready by Oct. 2018.
- Phase 4, another building, to add 80,000 sq. ft. next year.
- Phase 5, the largest expansion of all, is anticipated to bring in another 160,000 sq. ft. next year.
AB Labs and AB Ventures in Ontario are also expanding.
- Phase 1 building is in existence at AB Labs and the company is getting permitting now for Phase 2 to add 4,000 sq. ft. of growing space.
- The nearby AB Ventures facility is still in pre-licensing and will markedly boost capacity. When done, Phase 1 and Phase 2 buildings will add 105,000 sq. ft. of space.
Option Farms—These newest sites will be home to the most elaborate expansions of all.
- Plans for these properties, which are anticipated to be acquired from OptionCo this spring, include 14 separate buildings to add 1.015 million sq. ft. of grow space at the “Mission” site.
- The first 300,000 sq. ft. of that space is due to be completed in the next year.
- Another building at the “Delta” site is already funded for 4,000 sq. ft.
This readiness to market and the huge growing capacity coming on line, are plenty of reasons to look at Invictus as the company on the verge of becoming Canada’s next marijuana unicorn.
A billion-dollar market cap is well within reach for Invictus. With 91,000 kilograms of product potential by next year, revenues will be impressive.
MJ is sold by the gram, so that equates to 97 million grams. At a market price of $6 a gram, this means the strong capacity for $582 million in revenues, minimum.
Even the gloomiest analysts are predicting that MJ prices will remain at $6 to $7 a gram for moderate-quality product in the years ahead despite new supplies coming online. Invictus may actually command higher than minimum prices as it is positioning as a quality grower.
The profit margins—even at the low projected price of $6 a gram—will be huge for Invictus. That’s possible because Alberta and British Columbia where Invictus MD (OTC: IVITF) (TSXV: GENE) is growing its crops have very low electricity and water costs. Invictus expects it will be able to produce MJ at $1.30 a gram. It’s a huge markup.
Invictus Pay out $1 Million Dividend
In 2016, Invictus did something that stunned the industry. It paid out a $1 million dividend.
Growth companies don’t normally do that. Marijuana companies definitely don’t.
Unless you count Scott’s Miracle Gro as a pot stock, Invictus is the only MJ company that has ever paid a dividend.
At the time of the dividend, Invictus MD (OTC: IVITF) (TSXV: GENE) was in the middle of expansion when it sold off three assets for 315% gains. CEO Dan Kriznic called it a milestone in the company’s strategy and shared the wealth. Then he turned around and went back to expanding again. Invictus MD has a healthy cash position and no debt—and huge plans it can realize.
Invictus MD Is Deeply Undervalued Now—Why Wait for Someone Else to Capture Your Future?
You can see that Invictus MD (OTC: IVITF) (TSXV: GENE) is on the way to being a marijuana unicorn on its sales potential alone. With better than an half-billion in sales looming next year, if the stock market values Invictus MD at just 2X sales—that would put it over the unicorn $1 billion market cap mark.
That’s an easy target! MJ stocks go for much higher valuations. Aphria sells at 82 X sales, Canopy Growth 113 X sales, Organigram 58 X sales, Aurora Cannabis 109 X sales , MedReLeaf 60 X sales and Cronos 223 X sales.
But with good young companies just building revenues, marijuana analysts usually look at the economic value (EV) of marijuana producers compared to their production capacity in kilograms. This gives us a more even way to compare companies that are soon to be producing alongside those that are already thriving.
When it comes to EV/kg, Invictus MD is steeply undervalued again. The industry average EV/kg $49,112 per kg. Invictus is selling at an 81% discount! Its EV/kg is only $9,340.
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