FSD Pharma Inc (OTCMKTS:FSDDF) exploded in the market on announcing positive pre-clinical results for a proprietary CBD combination product. The upward momentum has since gained pace On Ontario Cannabis Retail Corporation selecting one of its subsidiaries to be an accessory supplier. A positive second-quarter update has also gone a long way in strengthening the stock’s sentiments among investor, further strengthening the upward momentum.
FSD Pharma Price Action
The stock is already up by more than 250%, a rally that has seen it emerge as one of the top performers in the cannabis sector. With the stock currently trading in a steep uptrend, pullbacks have emerged as buy opportunities from where buyers have joined and continued to push the stock higher.
A closer look at the chart above it is clear the stock is headed to the moon at the back of solid fundamentals that continue to strengthen by the day. After a recent pullback, the stock faces immediate resistance at the $0.42 mark, a breach of which could see the stock recording a new higher high. On the downside, the stock faces immediate support at the $0.22 mark.
About FSD Pharma
FSD Pharma is a licensed Marijuana producer that seeks to target all the facets of the cannabis industry, right from cultivation to processing as well as manufacturing and extraction. The company is in the process of transforming one of its facilities with a view of making it one of the largest indoor cannabis facilities in the world.
Positive Pre-Clinical Trials
FSD Pharma has exploded in recent weeks on investor’s taking note of recent developments that they feel justify the stock’s premium valuation in the market. For starters, the company is fresh from reporting positive pre-clinical results in an efficacy study of its proprietary Steady Stomach CBD combination product targeting Inflammatory Bowel Disease.
The company is developing the product in combination with its strategic partner SciCann Therapeutics Inc. The CBD product under development is patent pending having already proved to be effective as a potential treatment for IBD disorders.
“The achievement of these encouraging pre-clinical results with the proprietary “Steady Stomach” product marks a very important milestone for FSD on its way to becoming a leading supplier of superior and differentiated medical cannabis therapies for patients throughout Canada,” said Thomas Fairfull, President and CEO of FSD Pharma.
Positive pre-clinical study paves the way for the two companies to pursue a rigorous clinical research program. Approval of the CBD product would present a unique market opportunity for the company given that there are about 233,000 Canadians sufferings from IBD. The Canadian IBD market is currently valued at over $500 million.
Investors also appear to have taken note of the key milestones that the company achieved in the second quarter, which affirm robust growth. During the quarter, the company achieved its first harvest which is now being tested as the company continues to pursue a sales license.
The company commenced construction of Phase 1 of approximately 105,000 sq. Ft. close to Montreal whose operation will supplement a newly completed 25,000 sq. Ft facility. FSD Pharma exited the quarter with $31.7 million in cash, affirming its solid financial positions that it can leverage to achieve accelerated growth.
The company is in the process of hiring skilled and experienced staff expected to ensure all the large investments made in infrastructure generate substantial return on Capital.
“We continue to invest in ensuring we have the right assets and infrastructure in place to position us as the largest indoor cannabis grow operation in the world,” said Thomas Fairfull, FSD Pharma’s CEO.
Ontario Cannabis Retail Deal
Selection of the company’s subsidiary High Tide Ventures Inc. to supply the Ontario Cannabis Retail Corporation with innovative cannabis accessories adult-use market is a testament of the opportunities that continue to emerge by the day. The selection builds on a similar agreement whereby the company’s FV Pharma Inc. subsidiary entered into a non-binding memorandum of understanding to supply the Saskatchewan market with 5 million grams of cannabis over the next year.
FSD Pharma explosion to record highs in the market does not come as a surprise or on speculation. The company has shown it has what it takes to achieve accelerated growth and generate significant shareholder value, a development that continues to strengthen its sentiments.
A solid balance sheet of 31 million with no debt is a testament to how the company remains well positioned to leverage its financial muscle to pursue opportunities in both adult use and medical marijuana markets.
That said, the stock looks set to continue climbing high given the solid fundamentals expected to continue drawing investors. However, it would be wise to wait for further pullbacks to enter long positions in FSD Pharma as a long-term play.
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Disclosure: We have no position in FSSDF and have not been compensated for this article.