Colombia and Canada have set a new precedent in the cannabis industry. Recent developments have seen the two countries work towards an agreement which will see Colombian companies distribute high-quality cannabis to Canada. This is meant to ensure that the current excess demand for cannabis which exists within Canada is met.Entities operating within Colombia have, therefore, continued to benefit from increased share prices associated with such an announcement. As is expected, the news was taken positively by the market, especially so given that Columbia is looking to become one of the largest suppliers of cannabis globally. With global trade expected to hit $31.6 billion by 2021, marijuana operators within the country seek to benefit from taking up a significant piece of the pie, leading to the rise in the companies’ valuation numbers.Chemesis International Inc (OTCMKTS:CADMF) is one of the beneficiaries. The firm, which operates in the cannabis sector, has seen its share price rise drastically over the past month following both the announcement from Canada and Colombia as well as additional information from themselves. The result of the above is that the share price of the company has risen drastically from $.75 back at the beginning of 2019 to $1.57 currently. This 100% increment in the share price is supported by the over 400,000 shares traded daily during the same period which is a significant spike when compared to the under 20,000 shares which were traded before.Readers can review the price action in the chart below: CADMF Daily ChartWhile the precedent has had an impact on the shares traded, the company’s specific announcements have also directly impacted it. We, therefore, had a look at this and came up with the following report.
CADMF: A Historical Recap
As is the case with numerous cannabis companies operating in Canada, Chemesis International Inc, which was formed back in 2013, is headquartered in Vancouver, Canada.The firm operates together with its subsidiaries in cultivating, manufacturing, distribution and retailing of cannabis products within California, Puerto Rico and Colombia. Furthermore, through both the development and acquisition of novel technology, the firm extracts, formulates and produces different products, specializing in BHO, alcohol and CO2 extraction.
Developments
In a bid to grow its financial base as well as their product line, CADMF has continued to develop new products as well as acquire new technology meant to assist in the development of cannabis.Below are some of the advancements which the company has made in the recent past.
The New Technology
Cannabis extraction allows for companies to access cannabis oils, with more concentrated oils being preferable.According to the company, the firm had acquired both the intellectual property (IP) and physical equipment, meant to ensure the firm’s processes are more efficient. The new technology is meant to ensure that the high concentrations of cannabis oils are extracted and that its constituents and phytocannabinoids are preserved. The technology uses low temperatures to ensure this is achieved.The above process will allow the company to produce a variety of high-quality finished products such as shatters, tinctures, oils, and vapes. This will, therefore, ensure that CADMF grows both its product line and consequently its revenues. Furthermore, the technology will ensure that 100% of the natural cannabinoids are preserved. This will increase the yields and reduce the operational costs associated with part of the previously used extraction process such as winterization, filtration, and evaporation. The purchase will thus move up some of the products which CADMF expected to develop in coming periods.The move is expected to generate the company about US $200,000 in monthly purchases.In total, the purchase is expected to cost them about US $2.7 million through the issue of 1,597,633 shares at a price of US $1.69 – there are additional rules such as 36-month lockups and leak outs which govern the transaction.
Expansion into California
CADMF announced that there are plans to put up an additional 25,000 square feet of manufacturing in Cathedral City, California. This is supported by the commercialization of its state-of-the-art extraction facility which will support their expansionary plans scheduled for Q2, 2019.The expansion will assist the company in meeting its strategic and operational objectives which include the growth of their product line into edibles, beverages, and other consumer goods as well as increasing efficiencies in their extraction process. Eventually, the firm expects that the facility will be fully state compliant and will be used for manufacturing, packaging, distribution, and transportation of the final product to licensed dispensaries within the state.Given the size of California’s cannabis market, which is currently at $5.1 billion, their entry into the market brings with it a lot of promise of growth, especially in revenues.To tie it to the aforementioned purchase, CADMF’s CEO added that:
”With the Company’s recent acquisition of a new low temperature extraction methodology, we will also be able to expand our offerings to include other cannabinoids at higher concentration in our finished goods”
Conclusion
New technology coupled with a new market is music to the ears of investors in CADMF. The improved efficiency will greatly affect the costs incurred by the company and consequently create the opportunity for CADMF to utilize resources to grow their business as is currently the case. Therefore, we are bullish about the future price of CADMF.We will be updating our subscribers as soon as we know more. For the latest updates on CADMF, sign up below!Disclosure: We have no position in CADMF and have not been compensated for this article.
Discover Hidden Gems
Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.
