Is DOJA Cannabis Company Ltd (OTCMKTS:DJACF) Destined For More Gains After Strong Start?

There is a reason why the marijuana industry is known as the ‘green rush.’ Over the past two months, most stocks in the space have seen their share price more than double on the heels of exceptionally strong sales and booming business. DOJA Cannabis Company Ltd (OTCMKTS:DJACF) is one of the companies that has seen its share price, clock record highs generating significant value to shareholders in the process.The stock’s share price has more than doubled as it continues to touch higher highs in the market. Doja Cannabis is currently trading in a tight $3.46- $3.79 trading range, and in a strong uptrend. It is up by more than 90% for the New Year. DJACF Daily ChartGiven the strength of the upward momentum, it goes without saying that, the stock is destined for more gains from the current trading levels. Any pullback would likely be limited to the $2.7 handle, a close above which, would act as an excellent buying opportunity for investors who missed out on the initial rally.Before we look at the catalysts behind the stocks impressive run, let us first understand how Doja Cannabis generates shareholder value.Doja Business OverviewDoja bills itself as a premium cannabis lifestyle brand focused on growing high quality handcrafted cannabis flower. The company’s wholly owned subsidiary is a licensed producer of cannabis under the ACMPR. The firm has already applied for a Pre-Sales License Inspection that if granted will allow it to venture into the business of selling marijuana under the ACMPR.Growing investor confidence in the stock has to do with recent efforts that have helped position the company as a leading craft cannabis producer.Stock Catalyst Doja remains the talk of Wall Street in the cannabis space after announcing the signing of a Letter of Intent for the acquisition of Tokyo Smoke. The proposed acquisition has triggered a buying spree of the stock, given that a merger of the two companies will result in a class-leading craft producer with award-winning lifestyle brand.Scheduled for completion in March, the merger will result in Canada’s first nationwide brand focused cannabis producer. The combined company will go by the name Hiku Brands in reference to Tokyo Smoke, Doja, and Van der Pop, all premium cannabis brands.The merger will result in a combination of cannabis production, retail footprint and a portfolio of cannabis brands capable of realizing significant value of complete value integration.

“We have created the leading brand house in cannabis, where high quality and design will shape the cannabis future. I am confident, Hiku will be trusted’ by consumers to design better customer experiences and products, resulting in greater market share. Tokyo Smoke's experienced management team has proven its ability to build and acquire respected cannabis brands and create brand awareness in a difficult-to-navigate regulatory environment,” said DOJA CEO Trent Kitsch.

The acquisition of Tokyo Smoke is part of Doja retail positioning strategy that seeks to capture a more significant share of the nascent multibillion-dollar marijuana market. The company should be able to expand its retail footprint nationwide allowing it to target more markets at a go.The acquisition fits into Doja’s ambitions of significantly expanding its production capabilities. In October of last year, the company announced plans to expand its production capacity with the acquisition and refitting of a 22, 500 sq. ft. Kelowna, BC building, dubbed the Future Lab.The production facility is set to produce over 5,000 kgs of cannabis every year. Once complete the facility will expand Doja’s current production capacity eight times. The facility will also allow the company to integrate an extraction lab to leverage the economies of scale that come into being from a larger growing space.

“The FUTURE LAB has 325 feet of highway frontage which will be utilized to promote DOJA's cannabis lifestyle brand to the 1.9 million plus visitors to the Okanagan each year and the 40,000 commuters that drive past the facility each day," said Mr. Kitsch

In addition, the company has confirmed the closing of a previously announced non-brokered private placement of subscription receipts. Under the offering, Aphria and Koicha Partners LP acquired an aggregate of 8.9 million subscription receipts at $1.39 a unit, for gross proceeds of $12.5 million.Completion of the proposed merger will result in a combined company with a robust cash position of about $31 million. The funds should provide the much needed financial muscle for expanding cannabis production capacity and the addition of select brands into the portfolio.It should also go a long way in supporting the strategic positioning of Hiku brands as Doja moves to expand its footprint nationwide.Bottom LineDoja Cannabis has done a great job in distinguishing itself from the rest, by combining a best-in-class craft cannabis producer with retail-focused operations. The retail positioning means the company is well positioned to capture an outsized share of the fast-growing marijuana business.The expected tsunami of recreational marijuana demand is another opening that should present unique opportunities for the company, as it moves to expand its footprint nationwide. As it stands, Doja should continue powering high in the charts as investors continue to take note of its growth metrics on the expanding marijuana industry.We will be updating our subscribers as soon as we know more. For the latest updates on DJACF, sign up below!Disclosure: We have no position in DJACF and have not been compensated for this article.