Flowr Corp (OTCMKTS:FLWPF) is flying high, in line with the bullish momentum in the cannabis sector. In addition, the stock’s sentiments have inched higher on the announcement the company is pursuing a Nasdaq listing.
The upward momentum has also received a boost on the confirmation that the company has inked a strategic partnership with celebrated Canadian Chef, Ryan Reed, to develop edible cannabis products under Flowr brand.
Share Price Analysis
Research firm Jefferies initiating coverage of Flowr Corp with a buy rating all but underscores the upward momentum that has continued to push the stock up the charts. The stock is already up by more than 60% for the year having reaffirmed its breakout credentials. With the stock trading in a steep uptrend, the sky is the limit.
A rally to all-time highs presents an opportunity for bulls who missed out, on the initial spike to take part in the stock’s ascendance, on pullbacks. Price action indicates sell-offs will have to contend with the $4.20 as the immediate support level.
Sell-offs followed by a close below the $4.20 level, would leave the stock vulnerable to further drops probably back to the $3 a share level. Above the $4.20 level, Flowr Corp is a solid buy and looks set to continue edging higher.
What Does Flowr Corp Do?
Together with its subsidiaries, Flowr Corp holds cannabis production and sales licenses. The company operates a cannabis production facility in Kelowna British Columbia that utilizes its patented growing systems. The company is also engaged in the research and development of cannabis products.
Increasing Production capacity
Flowr Corp has continued to touch higher highs in the wake of equity research firm Jefferies initiating coverage of the stock with a buy rating. The rating affirms the stock’s prospects as the sector continues to evolve especially with the legalization of recreational use in Canada.
The company announcing plans to, more than double its cannabis production capacity is another development that continues to excite the markets. Flowr Corp has already secured approval from Health Canada to open up to 20 additional grow rooms at its Kelowna 1 facility.
Plans are already underway to set up to 20 grow rooms, before the end of the third quarter expected to take the company’s capacity to about 10,000 kilograms. Increased production should allow the company to target a broader target market as demand for cannabis products continues to soar.
“We’re building out our capacity as planned to ensure we can meet the growing demand for our products from our provincial partners and under our new medical cannabis supply agreement with Shoppers Drug Mart,” said Tom Flow, Co-CEO of Flowr.
The company has also inked a strategic partnership with celebrated chef Ryan Reed as part of research and development efforts. The two are to work together in coming up with high-quality cannabis edibles for taking advantage of the growing demand for cannabis products in the market. Plans are underway to launch the products as early as the fourth quarter.
Flowr Corp already has in place a cannabis supply agreement with Shoppers Drug Mart. The deal paves the way for the company to supply the retailer with premium medical cannabis products over the next three years with a two-year renewal term. The company has also launched an e-commerce platform where its products will be available as it continues to ramp up its sales operations.
A push for NASDAQ listing is another development that affirms Flowr Corp prospects in the multi-billion industry. Listing in the high profile exchange would allow the company to enjoy exposure in the U.S where it hopes to attract institutional investments.
“Flowr has made tremendous progress executing on its business plan since becoming a public company last year, and we believe the Company is well positioned to pursue additional growth opportunities. A NASDAQ listing is an important step forward for Flowr because we believe it will broaden our access to international investors as we become a truly global company,” said Vinay Tolia, Flowr’s Co-CEO.
Flowr Corp is enjoying an excellent run in the market helped by improving fundamentals as well as bullish momentum in the overall industry. That said the stock is an ideal pullback play given the strength of the upward momentum. After the recent spike, it might be wise to wait for a pullback before opening new long positions.
We will be updating our subscribers as soon as we know more. For the latest updates on FLWPF, sign up below!
Disclosure: We have no position in FLWPF and have not been compensated for this article.