DionyMed Brands Inc (OTCMKTS: HMDEF) is the latest Canadian cannabis player to list its shares for trading on the OTC Markets. Since trading began, the stock has been in a tight range between $2.25 and $3 a share. Traders have just been waiting on the next catalyst to break HMDEF out to the upside. Taking a closer look, there’s a lot we here at Insider Financial like with DionyMed Brands that can propel the stock out of its current trading range.
First up, here’s a little background info for those are not familiar with HMDEF. Founded in 2017, DionyMed is a multi-state cannabis brands platform, supporting cultivators, manufacturers and award-winning brands in the medical and adult-use cannabis markets. DionyMed sells branded products in every category from flower to vape cartridges, concentrates, and edibles. DionyMed serves cannabis consumers through retail dispensary distribution and direct-to-consumer fulfillment with its growing portfolio of award-winning brands.
Waterside Warehousing acquisition
DionyMed just signed a deal to acquire Waterside Warehousing, a premium manufacturer and indoor craft cultivator located in Oakland, California. DYME has agreed to provide US $1 million up front, which DionyMed can finance using its credit facility, with the option to acquire Waterside for an additional US $5 million. Waterside’s facility build-out will continue with this financing. If DionyMed exercises its option to acquire Waterside, DionyMed may draw upon its credit facility, issue stock or raise new equity to complete the acquisition. CEO Edward Fields said:
“Waterside Warehousing brings critical manufacturing, R&D capacity and indoor cultivation to our existing operational infrastructure. As we continue to build our market position in California by delivering today’s most in-demand cannabis brands, the team at Waterside accelerates our production capacity, margins, and product portfolio.”
DionyMed currently owns and operates DYME Distribution (through the former Rise Logistics) and manages Hometown Heart. Waterside’s premier cultivation and manufacturing facilities, which are located next to DionyMed’s Oakland campus, will offer the Company an opportunity to expand its extract and distillate manufacturing operations. Continuing to support DionyMed’s strategy to vertically integrate its wholly-owned brands, the Waterside investment will bring supply chain scale and manufacturing excellence to its growing portfolio of brands.
Acres Cannabis deal
Earlier this year, DionyMed signed a deal with Acres Cannabis, a vertically integrated cannabis retailer based in Las Vegas, Nevada. The partnership grants DionyMed’s brands and services immediate access to the highly coveted Nevada market, which services more than 43 million tourists each year, and represents another significant step in DionyMed’s national expansion plans. CEO Edward Fields said:
“Expanding into one of the country’s largest cannabis markets requires robust infrastructure and an established retail presence. Acres has all the ingredients required to build and launch today’s largest cannabis brands in Nevada. Entering Nevada has been a key growth objective for the team at DYME and we are pleased to have reached this exciting milestone.”
Acres operates one of the largest cannabis cultivation and manufacturing sites in the state of Nevada, as well as a 20,000 square foot dispensary in the heart of Las Vegas. As part of the partnership agreement, DionyMed’s infused products and edible brands, including its award-winning Winberry Farms, will be manufactured in Acres’ facilities and sold state-wide, providing DionyMed with a scalable platform to penetrate the Nevada market.
Currently trading with a market cap of US$50 million, HMDEF is an exciting story among cannabis plays. When you consider that DionyMed sells branded products in every category from flower to vape cartridges, concentrates, and edibles to more than 700 dispensaries and completes over 40,000 Direct-To-Consumer deliveries each month, you see a company with a wide footprint in the cannabis space. This is what excites investors. With how much the company has accomplished in such a short amount of time, it’s easy to get excited amount DionyMed. We believe it’s not if, but when HMDEF will break out of its current trading range to the upside.
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Disclosure: We have no position in HMDEF and have not been compensated for this article.