CordovaCann Corp. (CSE:CDVA) structures its deals to generate attractive returns for shareholders by paying a discount for the investments it makes
SmallCapPower | November 13, 2018: CordovaCann Corp. (CSE:CDVA), which operates across several jurisdictions in the United States including California, hopes to strategically invest in opportunistic operators. The Company offers its expertise to assist investee companies with a range of operational activities, including sales, marketing, and product development. CordovaCann is one of many exciting cannabis companies presenting at the New Green Frontier Cannabis Conference on November 19, 2018. Investors can sign up for the free webcast or register to attend in person here
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Here’s the three most compelling investment highlights for CordovaCann:
- Strategic investments provide exposure to what is potentially the world’s largest cannabis market
- Low acquisition costs provide attractive returns to shareholders
- Strong management team with strong capital markets and consulting experience
Strategic investments in what is potentially the world’s largest cannabis market. Recreational cannabis use has already been legalized across several U.S. states, including California, the country’s largest state by population. On November 6, 2018, Michigan became the 10th state to legalize recreational use. CordovaCann’s strategic investments in these legal states take advantage of existing infrastructure and operations, providing much needed capital to opportunistic cultivators. The investments position CordovaCann for robust growth should the regulatory environment at the federal level shift in favour of the cannabis industry. The Company’s California operations include an investment in a property with production and distribution licenses and is located in Humboldt County. The facility is expected to produce revenues in early 2019. In addition, CordovaCann recently signed an LOI to acquire a licensed producer applicant that owns a 14,000 sq. ft. facility in Ontario, expected to distribute products across Canada.
Low acquisition costs provide attractive returns to shareholders. CordovaCann structures its deals to generate attractive returns for shareholders by paying a discount for the investments it makes. Its acquisition and capital costs for its California-based assets amount to less than 3x the facility’s first-year projected cash flows, resulting in a payback period of less than three years. Meanwhile, its Colorado and Nevada investments amount to less than 1x projected first-year cash flows. These low payback periods for its investments provide CordovaCann with a greater cushion for returns should the underlying management teams not execute as well as planned.
Strong management team with strong capital markets and consulting experience. The Company’s CEO, Thomas Turner, has over 15 years of experience in the technology and consumer industries. In addition, he founded Southshore Capital Partners in 2009, playing a pivotal role in the growth of the firm’s long/short equity hedge fund. CordovaCann’s COO, Nathan Nienhuis, has over 20 years of experience in providing consulting services in the context of operations, design, and facility infrastructure, as well as product development. The Company’s CFO, Ashish Kapoor, brings over 15 years of investment banking and capital markets advisory experience to the team. The collective experiences of the management team ensure that every deal is thoroughly vetted and is structured to provide the highest returns to shareholders as possible.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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