SLANG Worldwide Inc. (CSE:SLNG), one of the Canadian marijuana stocks, recently announced an investment from Canopy Growth Corporation (TSX:WEED) co-founder Bruce Linton
SmallCapPower | September 19, 2019: SLANG Worldwide Inc. (CSE:SLNG), one of the Canadian cannabis stocks, Tuesday announced that it has received an investment from Bruce Linton, co-founder of Canopy Growth Corporation (TSX:WEED) (NYSE:CGC). Mr. Linton has, through an affiliate, purchased 347,222 units of SLANG at a price of $0.72 per unit, for a total investment of approximately $250,000.
Each unit is comprised of one common share of SLANG and one common share purchase warrant, exercisable at a price of $0.89, which expires on September 17, 2024. Mr. Linton has agreed not to sell or transfer to another party these securities for a period of one year.
So what does Bruce Linton see in SLANG Worldwide? SLANG is all about cannabis retail branding. SLANG Worldwide Inc’s branded cannabis products are sold in 12 states in the U.S. and are available in more than 2,600 retail stores. SLANG has the #1 selling vape pen in Colorado, New Mexico, and Vermont, as well as the #2 selling vape pen in Nevada. The Company also has the #2 selling Gummy edible in Nevada.
During its most-recently reported quarter (Q2 2019), SLANG Worldwide announced a 44% quarter-over-quarter increase in its revenue to $7.2 million. SLANG also had $18 million in cash and cash equivalents at quarter’s end, which the Company said is sufficient to fund current operations. SLANG Worldwide Inc’s adjusted EBITDA loss for the quarter, however, widened to $1.6 million from $1 million during Q1 2019.
SLANG Worldwide stock is down more than 70% from its 2019 peak, to its current price of $0.85, as the entire cannabis sector has been hit hard since the end of April, weighed down by the CannTrust Holdings scandal and the firing of Bruce Linton as Chairman and Co-CEO of Canopy Growth Corp.
Also putting pressure on shares of SLANG Worldwide has been a recent downward revision of the Company’s revenue guidance for 2019 to $70-$100 million, from $130-$160 million, reflecting what SLANG expects will be a delay in the legalization of edible and vape sales in Canada, its decision to slow down growth initiatives in certain emerging markets, as well as the delay of some of its product releases.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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