Two sectors have provided investors with the highest return over the past two years: cannabis and cryptocurrencies.
For investors in either of the above, the past two years have seen them rise to the green zone in their financials. Cryptocurrencies created such a wave as a result of their technological disruption whereas cannabis, as a result of the expected federal legalization in Canada has been the sector which has set new highs for investors. However, as a result of the volatility in the cryptocurrency market coupled with the dominance of Bitcoin – leading to its high correlation with other cryptocurrencies – investors, especially institutional investors, have been shying away from it and instead putting their money in cannabis.
Over time, companies have learned that both cannabis and cryptocurrencies have an impact on their stock’s performance. Cannabis is backed by strong fundamentals while cryptocurrencies are a technological revolution destined to revolutionize the market. As a result, stocks which have inculcated the above two have benefited greatly both in terms of performance and in terms of their expected growth. One such company is Leafbuyer Technologies Inc (OTCMKTS:LBUY).
Throughout the period, LBUY has continued to grow within the cannabis sector as well as venture further into the cryptocurrency space. Through this, the management has ensured that the company secures a strong position in both sectors, a factor which is currently being reflected in their share price.
Recently, the company’s share price has skyrocketed as a result of announcements emanating from Leafbuyer’s management. The share price has gone up by over 150%, making this a new phase for a company which has had a long bear run over the past. Through all this, the price stabilized at $1.88 – after hitting highs of near $2.5 – up from their previous low which was just shy of $0.7. Furthermore, their traded volumes have risen from the under 500,000 shares to a new high of 4 million shares.
Readers can view the above price action in the chart below:
Given the above price and volume action, it was clear to us that the news which the company released must have had significant weighting on their value proposition. As a result, we decided to take a deeper look at the performance of Leafbuyer over the recent past to establish their value driver. The following piece presents a synopsis of our findings.
LBUY: The History
The history of LBUY dates back to 2013 when the company was formed and incorporated in Nevada. It has since grown into a technology-based cannabis marketing company. Through time, they have devoted their resources towards ensuring that their clients receive the highest quality of cannabis through their website and other online sources. Furthermore, through the same channel, they are able to link people to the nest distributors of cannabis within an individual’s location, allowing for a much more efficient such for the product.
Growth Into LBUY
In our last analysis of the company – which is available here – LBUY was poised for growth. The piece spoke to the firm’s growth trajectory and how its management was working tirelessly to ensure that they expanded geographically and grew financially.
This tale is yet to stop. Their current announcements have further underscored this and ensured that the market is certain of their future in the market.
A Greenlight on The Acquisition
Similar to the Uber for cannabis, California-based company Greenlight Technologies has come to revolutionize the cannabis sector. Through their mobile platform, the company has created a system which allows for the real-time delivery of cannabis and cannabis-based products to the client. The app which has been integrated with different distributors – dispensaries – allows for the awarding of loyalty points to both parties.
Upon this backdrop, it comes as no surprise that the announcement by Leafbuyer to acquire Greenlight came to the jubilation of their shareholders. Through it, LBUY would enjoy double their current market size and their ability to scale into different markets would be accentuated courtesy of the software. Moreover, this will directly impact their partnerships with dispensaries as their value proposition will rise drastically. It was, therefore, forecast that this transaction would have an impact on their financial performance over the next 6 months.
The management at LBUY was excited by this announcement and its expected positive impact. Their Chairman and Chief Executive Officer, Kurt Rossner stated in his speech:
“We believe this service will offer dispensaries a powerful new tool and will allow us to cross-sell the Leafbuyer suite of solutions to a much larger sector of the market…”
The Blockchain Development
Earlier this week, the company announced that they had entered into the final phase of their blockchain development. This will see them come up with the first of its kind blockchain, one which would ensure that the cannabis market is assured of transparency throughout the process.
In their announcement, it was stated that the final phase would be complete by the end of October while the launch of the product was expected by December 2018. The platform is expected not only to boost the revenue of LBUY but also ensure the growth of the cannabis sector as a whole with the customer being at the heart of this growth.
Record Upon Records
In August, LBUY announced record results for the month.
Over the July period, they had not only grown their customer base by 26 – the new customers were based in 9 different states – but also grown their revenues drastically. The month saw their sales numbers rise by over 55%, speaking to the aggressive marketing campaigns having bore fruit as well as their diversification into new geographical regions. This was further underscored by their Director of Sales, John Valle who added that:
“The key to our growth is that customers prefer our ‘one-stop-shop’ suite of products… They see the value and benefit of having the best marketing and advertising products available to them under one roof.”
The above trend is expected to hold in future and with the entry into the digital space, a boom will soon be felt in their revenue and profits; therefore their share price.
All in all, the positive performance coupled with ensured that LBUY secures a position in the big leagues. The firm is expected to continue on this growth trajectory and eventually land at the top. We, therefore, remain bullish about the firm.
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Disclosure: We have no position in LBUY and have not been compensated for this article.