Pure Global Cannabis Inc.’s (TSXV:PURE) valuation could rise as the Company moves toward production in Q4 218 and generate revenues
SmallCapPower | August 22, 2018: Pure Global Cannabis Inc. (TSXV:PURE) is one of the newest publicly-traded Canadian cannabis companies, having listed on July 11, 2018. Led by a team of pharmacists, horticulturalists, and supply chain experts, Pure Global Cannabis is a life sciences cannabis company focused on producing premium cannabis for the medical and recreational markets. First of its kind in Canada, the Company has designed a proprietary growing system called ‘multi-ponic’ that encompasses a vertical farm setup that allows for multiple tiers of canopy, delivering 3x yield compared to traditional methods, while lowering costs and eliminating herbicides/pesticides use.
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Pure Global Cannabis currently trades at a market cap of $47 million on the Toronto Venture exchange. Its valuation could rise as the Company moves toward production in Q4 218 and generate revenues. Margins could also be set to improve, aided by its proprietary ‘multi-ponic’ growing system.
Investment thesis
- Developing Canada’s first ‘Multi-Ponic’ Cannabis Farm
- Fully-funded expansion
Unique patent-pending, ‘multi-ponic’ growing system
Leveraging the experience of pharmacists, plant geneticists and horticulture specialists, Pure Global Cannabis has designed a unique ‘multi-ponic’ growing system that combines hydroponics, aquaponics, and aeroponics with commercial agriculture methodologies. This model enables better distribution and absorption of all nutrients, while reducing inefficiencies common in traditional operations.
Strategically located facility; fully-funded to expand capacity and commercialization footprint
Pure Global’s flagship facility is located at Brampton, Ontario, close to the Toronto Pearson International Airport, providing easy access to both the Greater Toronto and Hamilton areas, as well as national and international distribution channels. PureSinse, the Company’s wholly-owned subsidiary, was issued an ACMPR cultivation Licence in December 2017 and is expecting the issuance of an ACMPR Sales License in Q3 2018.
3-Phase development plan: Pure Global Cannabis has planned an initial three-phase development plan for the facility, with Phase I comprising extraction & processing labs. Construction of Phase 1 at the Brampton facility has been ongoing for two years and is at an advanced stage, expected to complete in Q3 2018. Phase 2 development, expected to be completed in Q4 2018, includes ramp-up of the Company’s vertical farming cultivation on 18,000 square feet with 4,000 kg/year. Fully-funded expansion of the facility to 41,000 square feet is expected to be undertaken as part of Phase 3 in Q1 2019, increasing the total capacity to 8,000 kg/year. Longer term, Pure Global Cannabis plans to significantly expand its production footprint and output.
Experienced Management and Advisory Team
Pure Global Cannabis management team includes seasoned pharma industry experts, while its advisory team includes leading capital markets and industry experts. At the helm is Malay Panchal, who founded and built PureSinse privately for four years and is the CEO and Director of Pure Global. Chairman Dr. Chandra Panchal, PhD, acted as Director for MaRS Innovation, as a senior scientist at John Labatt Ltd., and as Chairman, President and CEO at Procyon Biopharma Inc. The team also includes Nader Gheshlaghi, PhD, a renowned plant genetics specialist and commercial-scale indoor and greenhouse horticulturist, and Michael Lavergne, a supply chain professional with 20 years of multinational experience in the fast-moving consumer goods and retail sector. The Company’s capital markets advisors have been involved in raising $600 million for cannabis and other high-growth companies in recent years.
Outlook and valuation
Pure Global Cannabis is a development-stage cannabis company that has yet to produce cannabis and is trading at a market cap of $47 million. The Company announced recently that it has entered into a binding letter agreement to acquire a 60% interest in Avicanna Inc.’s Colombian subsidiary, Sativa Nativa S.A.S, with plans for a one million square foot state-of-the-art greenhouse in Santa Marta, Colombia, with advanced technologies and automation to produce what it called “several fold greater than traditional methods.” Its stock’s valuation could improve as Pure Global Cannabis moves toward production in Q4 2018 and generate revenues. Margins could also be set to improve, aided by the proprietary multi-ponic growing system.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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