The last 10 days have seen the share price of Weed Inc (OTCMKTS:BUDZ) go through a rise and rise process.
The company whose share price has risen from lows of $1.2 to close the period at $1.7, a near 50% increase, is having its hay days at the moment. Their management must be celebrating such a surge, and in even greater jubilation are their shareholders.
This price action can be seen in the chart below:
However, such share price action needs to be backed by concrete fundamentals, otherwise, the market correction would have dire consequences on investors and negative ramifications on their portfolios.
As such, we chose to look at the company in a bid to assess whether such an increase is warranted and, if warranted, is backed by key fundamentals that are strong enough to drive such a rise in their valuation over such a short period as has been given by the market.
This will be done through assessing their investments, past and present, as well as their financial performance over the past.
We expect that this will provide any investor with enough information on the company to warrant decision making on whether this would be a good investment in line with their risk preference and time horizon.
With this in mind, let’s begin with a short introduction to the company: their history and morphosis into Weed Inc.
Weed Inc: The Morphosis
Founded in 1999 and incorporated in Tucson, Arizona as United Mines Inc, the company was set up primarily as a miner of precious metals. They later rebranded to a holding company with a multifaceted approach to the legal marijuana industry in 2015, necessitating their name change to Weed Inc.
Since then, BUDZ has been true to its brand, focusing on implementing their mission both within the USA and globally.
Currently, their focus is the pursuit of full (federal) legalization of marijuana across America as well as being the first cannabis company to be traded in the New York Stock Exchange. Other key information on the company can be obtained here.
That being said, the company has made strides over the past year in a bid to get to this level, some of which are seen to be the drivers of the price as is currently the case.
Let’s have a look at these movements.
Decisions Driving Growth
As per our last piece on BUDZ, the company invested significant resources in genome research through their acquisition of property in La Veta, Co.
This investment in the new home for Sangre AT, LLC (Weed Inc’s wholly owned subsidiary), would see Sangre AgroTech begin its 5-Year, $15+ million Cannabis Genomic Study to complete a global genomic classification of the Cannabis plant genus achieved through a 10,000+ square-foot building that will house the genomic research facility, a 4,000 square-foot building for plant product analytics and plant product extraction, a 3,500 square-foot corporate office center.
This gave Sangre AgroTech the ability to expand their research capacity, in turn giving Weed Inc the ability to benefit from growth that may arise courtesy of such research. Moreover, given the personell hired by the firm, BUDZ’s management have faith in the ability of the firm to grow long into the future.
The best news, moreover, stems from the latter.
A recent release showed that the Colorado market, one which Weed Inc has invested over $1 million has been growing significantly despite the declining demand in the rest of the US states.
The release which showed that Colorado took just 8 months to reach $1 billion in sales in 2017 as compared to the 10 months in 2016 only goes to show the growth in demand for the product during this period. As such, companies invested within this space must be enjoying huge benefits with almost none having as much as BUDZ.
The share price surge which is correlated to this release only goes to show how strategic investments are boosting the value creation potential for BUDZ and that going forward, the market expects rampant growth from the company: great news for all stakeholders.
The company has, however, not stopped there.
Weed Inc has also made true their bid to venture into the rest of the world with their establishment of a global presence with their entry into the Australian market.
Back in March, the company set up WEED Australia Ltd, a private subsidiary that would enable them tap into the Australian space. Such information presents the company as one that’s keeping true to their word and one that investors can work with in boosting their portfolio value going forward.
This being said, a look at their financials may not present the same positive narrative as they still operate at a loss and negative cash flows. However, their outlook into the future tells a tale of expected growth going forward and this will, over time, be one of the best investments in the portfolios of most investors.
BUDZ is poised to grow going forward, with statistics, as depicted in the article, backing this growth. Our outlook, as pertains the company, is quite bullish and is expected to remain long into the future.
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Disclosure: We have no position in BUDZ and have not been compensated for this article.