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INVICTUS MD STRATE COM NPV (OTCMKTS:IVITF) Breaking The Dogma Of Recreational Cannabis

INVICTUS MD STRATE COM NPV (OTCMKTS:IVITF) Breaking The Dogma Of Recreational Cannabis
Written by
Jim Bloom
Published on
October 20, 2017
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The stereotype that initially existed over recreational cannabis has slowly been fading away. Globally people have become much more receptive to cannabis as both a health alternative as well as a recreational drugINVICTUS MD STRATE COM NPV (OTCMKTS:IVITF) has jumped on the bandwagon and made an effort to champion the growth in this sector, hoping to benefit from its growth.The sector has in turn benefited from the increase in the price of their share, rising from just over $0.75 in July 2017 to $1.05 in October, an over 33% jump over this period as can be seen in the chart below: IVITF Daily ChartThis piece will review this jump to try and assess the market forces underpinning this jump in share price through analysis of their strategy and fundamentals to ensure we have a deeper view of the company.However, before this, let us have an overview of the company for readers with rudimentary knowledge of its operations:An Overview of IVITFIVITF was founded in 2014 in Vancouver, Canada with the vision of taking advantage of the legalization of marijuana in the United States as well as the possibility of its legalization in Canada to generate revenues. During this period, there were a lot of new entrants into this field as most players sought to gain the first-mover advantage and therefore make the kill. As such, IVITF sought to create a niche for themselves through research and development as well as capital investments.The firm’s objective since inception has been to provide high-quality medical marijuana through clean and organic means. Their methods have been certified with IVITF being licensed to produce and distribute marijuana in legal states in the USA.Over time, however, the company has braved stiff competition against other major players in the industry and has opted to integrate its line as a way of competing favorably in the industry. Since 2014, the firm has acquired about 4 companies within the production and distribution line in the sector, with the key acquisition being Acreage Pharms Ltd a Licensed Producer under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”).With such acquisition, IVITF has positioned itself to generate revenues as well as grow in the industry, banking on its investment in the sector to do both of these. Given such a position, the surge in positive news concerning the company comes as no shock to investors as is seen below.Success Stories That FollowStatistics from the cannabis data analytics firm BDS Analytics have placed the size of the cannabis industry in the US at a figure just shy of $1.4 billion. Such a figure signifies a significant market for players within the industry.As stated above, IVITF has positioned itself in the industry in a bid to capture a larger chunk of the billions running through the industry. Presently, the firm plans to capitalize on three main events, first being the legalization of recreational cannabis in Canada. This is expected to take place in July 2018. This move has led Canadian and American companies to invest heavily in this sector, with IVITF not being left behind.According to Dan Kriznic, Chairman and CEO of Invictus MD:

“There are a number of authorities across the country that are developing policies and regulations to support the successful legalization of recreational cannabis. Invictus MD is monitoring these jurisdictions and will engage officials when necessary.”

Sorce:The firm has, in line with the above, invested in over 250 acres under production with licensed producers: Acreage Pharms Ltd. According to the company, this venture will pay off with a production capacity of 5,000 kg of cannabis per annum commencing February 2018.Source:Finally, the company has seen further into the future, investing further in the edibles segment which constituted about 13% of the cannabis products purchased in the US. Their projections are that the edibles legalization date is about 20 months away, however, plans are in motion to ensure they are first-movers in the segment. They will mainly focus in Ottawa in the roll-out phase of this product.With the above in mind, it is clear that the company is poised for future success. However, a closer look at their financial situation is necessary to underscore this positive picture painted above.Financial Base:IVITF’s revenues over the three-month period till July 2017 fell to $556,431 as compared to $559,123 during the three-months till July 2016. The fall was associated to a slow-down in the sales of cannabis products over this period as well as the proliferation of competitors in the industry. Their costs of sales also went up by $321,480 over the three months till June 2016/17 as did their marketing which rose by over $800,000. IVITF stated that marketing costs were up in the short run in a bid to create their brand with the payoff expected next year upon the legalization of recreational marijuana in Canada.Ove the same period, however, the company received over $41 million in private placements, a move signifying the positive outlook by investors in the company. These are meant to fund their investments and operations as the company seeks to implement their plans in the near and distant future.Finally, the company has invested about $1.9 million in property, plant and equipment in addition to the over $46 million which they have accumulated in licenses. Moreover, they have set out $28 million in cash as reserves meant for investment in Acreage Pharms Ltd’s new 32,000 square foot farm described earlier. With such a significant amount of tangible and intangible assets, management expects to satisfy the demand as well as raise revenues in the future.Given the above, despite significant hiccups in the income position, IVITF is bound to bounce back and grow both its revenue and asset position.ConclusionIVITFis a case of calculated risk as well as well-structured growth in a relatively new industry. Their willingness and ability to create value for the shareholder will go a long way both for them as well as investors in the company.We will be updating our subscribers as soon as we know more. For the latest updates on IVITF, sign up below!For the full story on IVITF, check out our complete coverage.Disclosure: We have no position in IVITF and have not been compensated for this article.

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