Heritage Cannabis Holdings Corp (CNSX:CANN) A Potential Breakout Play

Heritage Cannabis Holdings Corp (CNSX:CANN) is showing signs of breaking out as investors react to a string of positive developments. The company has embarked on an acquisition drive as it looks to position itself, strategically, in the country’s burgeoning cannabis extraction business. In addition, the company is the latest recipient of Cannabis cultivation license.A high turnover in traded shares in recent weeks underscores growing investor interest in the stock. The surge in trading volume is down to several factors key among them being revitalized long-term prospects.

Heritage Cannabis Holding Price Analysis

While the stock is still engulfed in a long-term bear trend, all indications are that bulls are slowly regaining control from the bears. The stock has already bounced back from the $0.20 level, a critical support level below which it remains susceptible to further drops.Heritage Cannabis Holdings faces immediate resistance at the $0.34 level. A breach of the resistance level should open the door for the stock to continue climbing high on a continuation of the emerging uptrend.A rally followed by a close above the $0.40 mark should mark the end to the bear run that has engulfed the stock, since the start of the year. Above the $0.40 mark, the stock should be on its way back to this year’s highs of $0.70 a share. However, a breach of the $0.20 level on the downside could see the stock turn bearish. Below the $0.20 mark, the stock should be on its way to the $0.10 level.

About Heritage Cannabis Holdings

Heritage Cannabis Holdings through its subsidiaries engages in the business of growing, selling and distributing medical marijuana in Canada. The company also pursues strategic alliances in pursuit of opportunities in the cannabis sector in a bid to grow shareholder value.

Acquisition Drive

A spark in Heritage Cannabis Holdings trading activity is in response to investor’s reaction to the company’s aggressive acquisition drive. The company has set sights on a number of companies having already acquired some, as it seeks to strengthen its prospects in the multi-billion cannabis sector.For starters, the company has entered into a binding letter of intent, with the aim of acquiring all outstanding shares of Purefarma Solutions Inc. Based in Kelowna British Columbia. Purefarma is a manufacturer and wholesale processor of premium CBD oils.With the acquisition, Heritage Cannabis Holdings will gain a clear pathway into Canada’s cannabis retail and wholesale market. The acquisition is also set to strengthen the company’s prospects in overseas markets.Purefarma comes into the deal having generated revenues of $2 million last year and EBITDA of $500,000. The company also has a supply agreement for 1,600 acres of hemp with partner farmers.

"As many in this industry have realized, the extraction business is exciting yet difficult to execute. By adding the experts from Preformat, a team of recognized industry leaders in the extraction business, we have provided Heritage and its subsidiaries a platform to position itself on the global stage, and move us into a whole new phase,” said Clint Sharples, Heritage Interim CEO.

In addition, Heritage Cannabis Holdings has also set sights on CannCure Corp, a company that has been granted Health Canada license to cultivate Cannabis. The deal should close early next month.Completion of the acquisition will see the company emerge as one of only a few companies in the region with multiple LPs.

“We are working closely with the team at CannaCure to close this transaction, and it remains an important part of our expansion plans. We are targeting closing this and the Preformat transaction at the same time, and executing our business growth as one entity in the near future,” said Mr. Sharples.

What Next For Heritage Cannabis Holdings

The most recent bear run to have hit Heritage Cannabis Holdings continues to show signs of exhaustion. All indication is that the stock is set to break out of the current trading range with underlying fundamentals supporting movements on the upside.The overall cannabis sector turning bullish also continues to support talk that it is only a matter of time before Heritage Cannabis Holdings bounces back. Investor confidence in the stock has ticked higher in recent weeks depicted by high turnover in traded shares.Underlying fundamentals have also turned bullish in the wake of the company embarking on an acquisition drive to strengthen growth prospects. The stock now looks set to finish on a high after coming under pressure in the first half of the year. For early birds looking to gain exposure in the booming cannabis sector, Heritage Cannabis Holdings may as well be a better play at current levels.We will be updating our subscribers as soon as we know more. For the latest updates on CNSX:CANN, sign up below!Disclosure: We have no position in CNSX:CANN and have not been compensated for this article.