A 43% plus a spike in share price caught many Mym Nutraceuticals Inc (CNSX:MYM) shareholders by surprise. The spike came at the backdrop of one of the longest routs that saw the stock shed a substantial amount of market share. However, the stock has started showing signs of bouncing back after a period of subdued activity in the market.
MYM Nutraceuticals Price Analysis
Supporting the bounce back from a ferocious sell-off is the announcement that the company has secured a $25 million financing. The financing could not have a come at a better time as it provides the much-needed fuel, for MYM Nutraceuticals to accelerate its operations in the cannabis sector.
In addition to the financing boost, the company has confirmed a new manufacturing facility that will support its efforts on the development of cannabis consumables. The developments have helped trigger renewed investor interest in the stock, which explains a spike in trading volume in recent weeks.
After a period of consolidation, the stock has started showing signs of bottoming out supported by improving fundamentals. The recent spike has catapulted the stock close to a critical resistance level at the $0.76 mark.
A rally followed by a close above the $0.76 mark should open the door for the stock to continue powering high, as part of the emerging uptrend. For the stock to turn bullish given the underlying long-term bear trend, it needs to rally and stabilize above the $0.75 mark.
Below the $0.75 mark, the stock remains susceptible to drop further as short sellers remain in firm control.
About MYM Nutraceuticals
MYM Nutraceuticals casts itself as an innovative company focused on the development and marketing of hemp-based cannabidiol strains as well as oil infused nutraceutical products. Formerly known as MY Marijuana Canada Inc., the company also acquires Health Canada licenses for the production and sale of high-end medicinal cannabis supplements.
$25 Million Equity Line
MYM Nutraceuticals share price activity received a boost on investors reacting to a new line of financing as part of an agreement with private equity firm Alumina Partners LLC.
The private equity firm has accorded the company a $25 million equity line of $25 million that it can draw in two years. According to the Chief Executive Officer, Rob Gietl, the investment line is an important milestone in the company’s push to become a key player in the cannabis space.
The company intends to use the finance to accelerate the development of its Weedon and Laval projects in Quebec. The Weedon project is a 1.5 million square feet cannabis greenhouse under construction in Quebec. The Laval project, on the other hand, is a 37,000 square foot greenhouse production facility in Laval Quebec.
“Quebecois Cannabis is rapidly taking a front seat as a driving economic force behind the emerging market opportunities for regulated Cannabis in 2019. We regard any meaningful early-mover advantage in the province to be a key one, and are excited to support MYM in their accelerated plans to execute toward a decisive leadership role in the space,” said Adi Nahmani, Alumina’s Managing Member.
Dutch Passion Deal
The signing of a $25 million equity investment could not have come at a better time. MYM Nutraceuticals has inked an agreement with Amsterdam based Dutch Passion Seed Company. The agreement paves the way for the production and distribution of Dutch Passion branded products and cannabis seeds in Canada.
Under the terms of the agreement, MYM Nutraceuticals will be able to produce and distribute all products under the Dutch Pasion brand. The company will also be able to make Dutch Passion, its flagship brand of cannabis seed for sale in North America.
“As legal production of cannabis has been rapidly increasing worldwide, so has the demand for seed genetics. The Dutch Passion portfolio of seeds will prove to be a very valuable asset to MYM and its shareholders,” said Mr. Gietl.
The signing of a $25 million equity investment is a massive development. MYM Nutraceuticals remains well positioned to utilize the equity investments to make a name for itself in the burgeoning Canadian cannabis sector.
Construction of cannabis production facilities underscores the company’s push to become a global leader in cannabis production. The company leveraging Dutch Passion brand name in pursuit of revenues in the sector is another development that underscores long-term prospects.
That said MYM Nutraceuticals remains well positioned to continue rebounding as investors take note of the improving fundamentals supported by a $25 million equity line.
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Disclosure: We have no position in CNSX:MYM and have not been compensated for this article.