Diego Pellicer Worldwide Inc (OTCMKTS:DPWW) prospects in the marijuana space are finally looking bright, as its core business continues to grow at an impressive rate. While the stock is languishing near all-time lows, its sentiments among investors could soon change after a record-breaking month, of sales.
The stock faces an uphill task to bounce back after losing more than 90% of market value over the past one year. However, an increase in trading volume in recent trading sessions has reinvigorated hope that over the next few months the stock could tick higher.
With the stock languishing at the $0.03 handle, it goes without saying that it could take some time and breathtaking development for it to bounce back to 52-week highs of $0.36 a share. The stock needs to first close above the $0.09 handle, to be considered a bounce back, play given the strength of the sell-off wave that has pushed it to current trading levels.
Before we carry out a detailed analysis on why we remain upbeat about Diego Pellicer long-term prospects, let us first understand what it does in pursuit of growth.
Diego Pellicer Worldwide Business Description
Diego Pellicer Worldwide is a real estate and consumer development company that acquires and leases real estate properties to marijuana operators in the U.S. The company core business entails providing growing space as well as processing, recreational and medical retail space to licensed marijuana growers.
In addition to running the cannabis real estate business, Diego Pellicer Worldwide also delivers premium cannabis products to consumers in Colorado through its upscale dispensary.
Growing Marijuana sales
A record number of sales in December is one of the reasons why we remain upbeat about the company’s long-term prospects. The company says its sales were up by more than 25% in December, compared to November, and 130% up compared to June levels. The purported sales growth underscores the company’s proven marijuana retail and branding success.
“Our focus on the customer experience, the highest-quality products available in the market along with our award-winning Diego Pellicer retail design make us the ‘premium’ marijuana buying experience among cannabis retailers,” said Neil Demers, chief executive officer, Diego Pellicer – Colorado.
A further indication that Diego Pellicer is in a growth Phase is the fact that it has been awarded a number of accolades including retail Dispensary of the year in 2017. The company remains focused on elevating customer experience through competitive pricing and offering premium brands.
In a bid to develop industry-leading premium marijuana branding and retail prototypes, Diego Pellicer has partnered with world-class architect Michael Rotondi. The company has also teamed up with original Apple Inc. (NASDAQ:AAPL) retail store creative director, Jill Savini for the design of retail prototypes as well as innovative branding for future store locations.
“What fascinates me the most about working with Diego is that while the industry continues to be defined, it’s possible that our work will set a new standard that others will want to emulate,” said Rotondi. The store concepts that we’re developing will not only make each location look consistent and yet unique, but can be built quickly using current technology and materials,” said Mr. Rotondi.
The two world-class architects are to help the company create cutting-edge branding and architecture system that is adaptable to every market and reflect the community in which it operates.
Even as the company continues to register robust growth in sales, it is still far from turning in some profits from its operations. The company’s financial results are not in the best shape but in line with what most businesses in the marijuana industry have.
For the first quarter ended March 31, 2017, the company reported net revenues of $0.32 million. Net loss in the quarter stood at (-$1.31) million. A decline in earnings in the quarter was mostly as a result of non-operational activity in the activity. Change in operating cash flow stood at -15.77% compared to the same period the previous year.
With the stock languishing near all-time lows, it would take a lot of faith if one is to recoup any returns from the stock in the short term. Diego Pellicer should be approached as a long-term investment given its proven formula for marijuana retail and branding success.
The stock is a perfect fit or investors who would love to gain some exposure in the marijuana space given that it operates two sets of business. Its retail business gives it a competitive edge when it comes to addressing the needs of marijuana licensed operators, looking for cannabis growing and production space.
A line of premium cannabis products further diversifies Diego Pellicer revenues streams allowing it to generate significant returns, as demand for such products continues to grow.
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Disclosure: We have no position in DPWW and have not been compensated for this article.
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