The past year has been a roller coaster for Cannex Capital Holdings Inc (OTCMKTS:CNXXF) in terms of share price performance. The period has seen them suffer a bear run as the price came tumbling from highs of $1.38 back in May to lows of $.37 as of November.The volatility experienced during this period was especially driven by the continued volatility experienced in the cannabis market, therefore, affected nearly all cannabis stocks and is underscored by consecutive increment and declines of share price throughout the year. Moreover, the company’s bear run was characterized by the massive sell-off which was witnessed during the year as shown in the chart below: CNXXF Daily ChartHowever, as with a number of marijuana companies, the share price has begun its reversal, rising from its lows to its current price of 0.67, a near 100% price increment. In the past month alone, the price has risen by nearly 30% from $.5 to its current price. This is shown in the chart below: CNXXF Daily ChartWith the above being the case, we are taking a look at the past few months and evaluating how this reversal has come to be. In doing so, we came across some news regarding the company’s new listing as well as its bid to become the industry leader through integrating with 4front company. Below is a report of our findings.
CNXXF: Then and Now
Cannex Capital Holdings Inc. is a Vancouver based company which operates primarily within the cannabis industry. The firm, through its subsidiaries, both leases its real estate properties and supplies to cannabis farmers and processors both within the United States and Canada. Through harnessing both of the above, the firm has continued to harness their key real estate investments and optimize them for cannabis farmers through the provision of the necessary infrastructure. The firm currently owns two indoor cultivation facilities as well as a logistics and production facility in the state of Washington.The above has seen them build a strong knowledge base which has, in turn, ensured that they engage in consulting services within the sector as well as allowed them to act as agents on behalf of farmers. Their broad reach in service delivery has thus enabled them to grow.
Recent Developments
The firm’s recent developments date back a few months, however, have had a significant impact on its operations. These developments are as follows:
Upgraded on the OTC market
In mid-October, the firm upgraded its position on the OTC market to from its previous listing on the OTCQB Venture market to list on the OTCQX Best market. This upgrade followed the firm’s continued growth and development within the marijuana space and was meant to see it have a wider reach to new investors whose investments can spur its growth, as stated by Jason Paltrowitz, Executive Vice President at the OTC Market Group, who said:
"Trading on our premium OTCQX Market provides companies with increased visibility and more efficient trading for their global investors. We look forward to supporting Cannex Capital and their shareholders in the U.S. market.”
Source:This was further supported by Anthony Dutton, CEO of Cannex Capital, who spoke to the firm’s need to increased visibility as they continue working towards expanding their business within the United States. Through this, the firm expects to tap into strategic investors looking to venture into the cannabis sector and forge solutions for them which will allow both the investors and other shareholders to grow their wealth.
New Strategic Orientation and Partnership
As previously stated, CNXXF owns two cultivation facilities as well as a logistics facility. Their new partnership, therefore, comes only to cement their operating capacity.The firm announced a new partnership with 4front Inc, a firm which operates in four states – Pennsylvania, Illinois, Maryland, and Massachusetts - and owns five cannabis dispensaries. They also plan to open five more dispensaries over the first half of 2019.The partnership is therefore meant to see them venture into and grow within the United States, ensuring that they meet their strategic objective of tapping into the largest cannabis market in the world.Through this partnership, the new front will see both firms operate about six cultivation facilities across the United States as well as five dispensaries. This will ensure that they can tap into both the cultivation and distribution segments of the value chain, allowing both firms to operate within the entire chain thus profiting both firms in the process. In the near term, the newly formed partnership is expected to venture into other states such as California, Michigan, and Nevada thus allowing them to tap into a much larger market base, growing their revenue and growth capacities.Through harnessing their synergies, the integration of the two firms seems to be a well-knit and crafted transaction, one which is expected to benefit both of them in the short and long-term. Presently, with both seeking growth both geographically and in their product lines, these synergies will see them eventually operate throughout the cannabis value chain, allowing them to grow in the process.
Conclusion
In harnessing its synergies with 4front as well as listing on the OTCQX market, CNXXF has not only grown its financial muscle but also established its trajectory for growth. The firm is, as a result, expected to continue on this rising trend, therefore, we remain bullish about this stock.We will be updating our subscribers as soon as we know more. For the latest updates on CNXXF, sign up below!Disclosure: We have no position in CNXXF and have not been compensated for this article.
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