Shareholders of Future Farm Technologies Inc (OTCMKTS:FFRMF) should have concerns about company's stock performance in 2018, yet recent news noting expected revenue growth of 1,300% has made FFRMF an interesting pick.Amidst the good developments, it is still unclear whether the market will stop the current downward trend. The analysis of the stock price does not reveal that investors are taking note of company's announcements. The situation is terrible for those stockholders, who acquired shares in January when California regulated the sale of marijuana in licensed shops. They should have suffered seeing how the stock price tanked the following two months. However, it is also a great opportunity for potential acquirers, who may profit, as they can jump in at today's prices. Check the most recent share price action: YTD month chart for FFRMFWith the stock trading at the $0.58 handle, it needs to close above the $0.75 handle to be taken seriously. On the downside, if the price closes below the $0.50 mark, the stock could drop to the $0.25 handle. We would expect large trading volumes at the low levels, as longs could take the opportunity to acquire shares at a deep discount price. Stay tuned because opportunities such as this one could appear in 2018.Before we assess the most recent developments from this company, let us first check again what the company does in pursuit of growth.BusinessFFRMF, founded in 1984, is headquartered in Vancouver, Canada. Future Farm Technologies Inc. is an indoor plant growth technology company specializing in LED lighting and vertical farming solutions. Future Farm's business model includes developing and acquiring technologies that will further its position as a leader in the evolving Controlled Environment Agriculture (CEA) market for the global production of various types of plants. FFRMF holds a worldwide license to use a patented vertical farming technology that, when compared to traditional plant production methods, generates yields up to 10 times greater per square foot of land.Have a look at the following recent video, wherein the company shows its facility in California:
The following are the most evident reasons to support the bullish thesis on this name.Receiving financingIn order to keep capitalizing on the growing cannabis sector in the United States and Canada, FFRMF needs cash. While the company became cash flow positive in Q2 2017 and closed CAD300K in seed round funding, FFRMF continued raising capital in 2018. With $4 million from Yorkville Advisors Global, LP, the company showed that the business model is continuously seducing the investors. In addition, it proved that it has cash in hand when a new project arises. Proceeds from the private placement will be used to acquire the previously announced 10-acre operating greenhouse in Florida.In addition, in January, the company raised $2,553,092 more from the exercise of warrants. While we believe that the stock dilution was not significant, in our opinion, if the company can grow at the rate promised, it will offset the potential dilution. Please note that new shares are being issued besides the increase in the revenue line of the company. This means that the raised capital is being utilized for the development of producing projects.Acquiring assetsIt is one of the most significant catalysts on the stock. The company is acquiring a large number of business interests and assets. It is not only increasing revenues, but also the know-how in several industries and could multiply the returns in the future. Among the acquisitions, the acquisition of a 10-acre operating greenhouse was remarkable, which generated approximately $2,800,000 in revenue and has positioned the company very well in the emerging Florida cannabis market.On the top of it, the company closed the acquisition of 40% ownership interest and 50% economic interest in a Puerto Rican company, which was presented as the leading medical cannabis dispensary operator in Puerto Rico. The announcement was released in combination with the following information about the stock options granted to the directors. This is usual practice but has been disliked by the market. It explains why the acquisition was not celebrated by the market participants in early February:
"The Company is also pleased to announce that it is granting incentive stock options to certain directors, officers, employees and consultants to acquire a total of 3,487,500 common shares at an exercise price of $0.96CDN, which was the closing price on February 7, 2018." Source
In addition to this acquisition, the letters of intent to acquire other interests were also significant. Firstly, the company signed a letter of intent to acquire 51% interest in Bristol County Wellness Center, Inc., which is expected to operate 24,700-sq ft Registered Marijuana Dispensary in Massachusetts. Furthermore, in January, the company signed a definitive agreement with New England CCS to acquire 51% stake in FlipCoin, a new cryptocurrency application, which will soon be integrated with Coinbase. The opportunity seems very significant.What's our take on these letters of intent? They represent a good opportunity for shareholders. These are not closed acquisitions. These could be celebrated by the market once they are confirmed. They could provide good entry points into the stock. If you are up to staying tuned to this company, following these agreements is a good strategy.FFRMF is also selling divisionsIt is also a beneficial feature for the shareholders. The company is not only acquiring businesses, but it is also selling them. The clearest example was the sale of the new augmented reality company, NexTech AR Solutions Corp. The new company will trade on the CSE and is expected to bring liquidity to FFRMF. Read the following information:
"NexTech is expected to have a first mover advantage in bringing its patented next generation of AR to the cannabis industry and more. Upon spin-off, the two separate public companies are expected to have leading positions in their respective industries, and compelling growth opportunities." Source
The strategy is permitting FFRMF to push up growthAs a result of this ambitious M&A strategy, FFRMF expects to grow at a large pace in 2018. Taking into account the revenues of $0.2 million in 2017, the company expects to grow revenues by 1,300% in 2018. The financial expectations were released in this press release:
Future Farm Revenues - Future Farm Technologies Inc OTCMKTS:FFRMFWhat are the main growth drivers?According to the company materials, the new 10-acre operating greenhouse is located close proximity to Orlando, which receives attracts over 62 million visitors annually. As a result, the company seems well positioned in the emerging Florida cannabis market, estimated to climb to $1.6 billion in medical cannabis sales by 2020 (Forbes). The following words resume very well the strategy of the company and the current situation. Keep in mind these words:
"Our portfolio has grown quickly over the past year with assets acquired in Rhode Island, Maine, California and Puerto Rico, in addition to the acquisition of our Florida greenhouse and nursery. We continue to execute on our planned strategy of building a portfolio of valuable, revenue-generating assets in the fastest growing cannabis and hemp markets in the country" says William Gildea, Future Farm’s CEO and Chairman
Be sure to check out our coverage on FFRMF!We will be updating our subscribers as soon as we know more. For the latest updates on FFRMF, sign up below!Disclosure: We have no position in FFRMF and have not been compensated for this article.Image courtesy of Matt Wakeman via Flickr
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