Cannabis Strategic Ventures (OTCMKTS:NUGS) has been on a steady downtrend ever since September when the stock almost hit $6. We’ve witnessed a series of lower highs followed by lower lows. However, things look be turning for NUGS. The stock looks to have bottomed and reversed the downtrend after releasing some major news. Let’s take a look and see what’s been happening with NUGS.
First up, a little background info for those that are not familiar with NUGS. Cannabis Strategic Ventures is a Los Angeles based firm that incubates, develops and partners with category leaders within the cannabis sector. The Firm’s NUGS brand experience provides mentorship and a range of essential services to emerging and existing Cannabis consumer brands.
Santa Barbara deal
The news that got NUGS moving again was a Letter of Intent signed by NUGS with a Santa Barbara County cultivation operation that holds approximately 40 commercial cannabis licenses from the County of Santa Barbara, the California Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch, and the CalCannabis Cultivation for growth, manufacturing, and cultivation. CEO Simon Yu said:
“As we increase Cannabis Strategic Ventures’ stronghold in the California cannabis market, we are pursuing partnerships that are strategically aligned with our corporate growth plans. Obtaining access to a large batch of licenses located between the cannabis-friendly cities of San Francisco and Los Angeles will allow us to expedite our growth and scalability.”
The Santa Barbara deal follows the company’s goal of becoming a major player in California. Last month, the company announced that it was pursuing 20 cannabis licenses from the California Bureau of Cannabis Control that will lead to the development of a substantial cannabis growth operation of approximately 250,000 square feet of turnkey greenhouse space in California. The Company said it will commence cultivating as soon as licenses are issued. CEO Simon Yu said:
“This is a significant event for our Company and its investors. At approximately one quarter million square feet, this cultivation operation will have four or five cultivation cycles each year and each cycle will be capable of producing tens of thousands of pounds of high-quality flower.”
Prior to this, the company was primarily focused on branding activities relating to its Fitamins, Halo Filter and The Asher House CBD pet-focused product. NUGS now plans to expand its investment and operational activities to include other areas of the growing cannabis business sector. Planned company expansions will be in the areas of cultivation, processing of cannabis inputs and products and cannabis retailing. Cannabis Strategic Ventures says that management is actively vetting business opportunities in all such industry subsectors to maximize value for shareholders.
In order to boost shareholder value, the company has been canceling shares. Last month, the company canceled 60 million shares as part of its efforts to uplist to the OTCQB. Cannabis Strategic Ventures latest share restructuring expands on an August 2018 undertaking where the Company canceled 75.6 million shares, including 20 million from Yu. CEO Simon Yu said:
“2018 has been a tremendous year for the cannabis industry, marijuana stocks and cannabis investors. Reducing the number of outstanding shares increases the value for our shareholders and signals management’s commitment to building an industry-leading organization. Along with increasing shareholder value, moving to a higher tier exchange is a priority for our Company. OTCQB, will help broaden our shareholder base, provide better access to institutional investors and create additional value to current shareholders.”
Canceling shares is a step in the right direction, but NUGS still has a market cap of over $300 million and no revenues. We will be looking for the Santa Barbara deal to close and for the company to implement its business plan. We like the direction the company is heading. We just need to see management execute. So far, we do like what we are seeing.
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Disclosure: We have no position in NUGS and have not been compensated for this article.
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