It has been an interesting period for cannabis players over the past few months.
During this time, the industry has seen its market capitalization nearly double as the share prices of companies operating within it were hit by the cannabis wave, rising nearly as high as cryptocurrencies. More specifically, players within Canada have especially been enjoying the highs they have reached as a result of the legal environment in their country swinging in their favor.
This has also been the case for MPX Bioceutical Corp (CNSX:MPX).
Over the past few moths, their share price has continued its upward trend, rising by nearly triple digit percentages. More specifically, over the past three months, the price has gone up by about 50%, rising from lows of $.5 back in March to their current price of $.75 as of 27th June.
Readers can review the above price action in the chart below:
With such figures being the case for most cannabis companies in the market – especially Canadian cannabis companies which MPX is part of – it may be suggested by some that the company is merely rubbing off on the industry’s good fortunes.
However, this is not necessarily the case.
The above statement, albeit partly right, alludes to the fact that little has ben done to get them to where they currently stand; making it incorrect. In this piece, therefore, we reveal what MPX has been doing over the last few months to ensure they maintain their stand at the top of the food chain especially on matters cannabis in Canada.
MPX: An Overview
Before going into the intricacies, however, let us revisit the company’s history MPX.
Founded back in 1974, MPX is headquartered in Toronto, Canada. The company was initially incorporated as The Canadian Bioceutical Corporation, a name which was later changed in 2017.
Through its subsidiaries, the company operates within the natural health products industry in North America through manufacturing and distribution of nutraceuticals. It has also specialized in the provision of advisory services – from production, financing, administration, and staffing to logistics – to medical cannabis enterprises.
Through this process, the company has gained key competencies and an innate understanding of the cannabis industry, all of which have ensured that their competitive power is felt by all players within.
All the above have played a significant role in ensuring that MPX grows and have been implemented in their most recent plays.
About a month back, MPX Bioceutical made their first money move.
On the 29th of May, the firm announced that they had successfully completed their capital raise of US $40 million. The raise which was completed through a secured convertible original issue discount loan issued at a price of $.821 per $1 and accruing a rate of 7% per annum compounded quarterly was set to ensure that they had adequate capital to finance their operating – procurement of extraction and production licenses – as well as investing activities – specifically expansions and acquisitions.
Through their management, the company also spoke to setting aside some of the funds for payment of notes. This pertained $9.5 million which was meant for an acquisition of 99% membership units of GreenMart of Nevada NLV, LLC, an acquisition which took place as at December 2017.
Despite this, the company was still working at growing its capacities, ensuring it had adequate infrastructure to penetrate both the Canadian and US markets especially now that the cannabis legalization is happening in most states in the US and federally in Canada.
It seems that the money moves finally paid off.
The news regarding MPX culminated in their most recent acquisition of 100% of the issued and outstanding shares of Canada Inc which currently operates as Canveda.
Canveda is among the companies which are licensed producers under the Health Canada’s Access to Cannabis for Medical Purposes Regulations where they received a cultivation license back in June 2017. They currently have a 12,000 square-foot facility which enables them to produce about 1,000-1,200 kilograms of cannabis flower – high quality – per annum.
This acquisition, therefore, fits right into MPX’s lane. The availability of an operational cannabis producing company in their portfolio means more revenues and higher returns for them – music to their shareholders’ ears. It constituted about CAD $18.12 million, broken down into CDN $3.12 million in cash and $15 million satisfied through the issuance of 21.43 million common shares at $.7 per share.
Through this, the company is working at vertical integration and harnessing their synergies. According to their CEO, W. Scott Boyes:
“The Canveda acquisition should accelerate our ability to secure cultivation, sale and dealer licenses at our Owen Sound facility”
He further laid out the company’s plans for the coming period, alluding to the fact that their vision was driven more by the expansion of their client base globally thus by exports. He went ahead to say:
“We believe that current and planned cultivation by existing licensed producers will oversupply the domestic market. Instead, we plan to focus on the production, distribution and retailing of high quality cannabis distillates… and for export to the growing list of countries legalizing the use of medical cannabis.”
This spoke highly of their vision to the market, sending signals that their globalization strategy was already in place. Through this, the company seemed to have set their mind on increasing their current revenues – which stood at $4.3 million at 4Q2017 up from $3.9 in 3Q2017 – and eventually their net profit position. With their current loss position has taken a hit as a result of the high interest – $7.6 million up from $1826,262 over 4Q2017 and 3Q2017 respectively – a lot needs to be done in terms of managing their costs and boosting their revenues.
This deal seems to be a step in the right direction.
MPX has made a step in the right direction. Their most recent acquisition has come to assure the market that the company is headed to the top. With their trend holding strong, all that’s left for them is to maintain it and keep climbing as they are currently doing.
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Disclosure: We have no position in MPX and have not been compensated for this article.