Nutritional High I (OTCMKTS:SPLIF) Is An Emerging Cannabis Play

Nutritional High I (OTCMKTS:SPLIF) is what is hot on investor’s lips right now. Within a week, the price skyrocketed to an all-time high of $0.7. The stock has continued to rise since 2015 and this last rise simply confirms that its success is here to stay. In this piece, we give a brief introduction of the company and all of the recent developments that contributed to its success.First, take a look at the stock price action over the past year: SPLIF Daily ChartBrief HistoryNutritional High is based in Toronto, Canada, the company is focused on on acquiring, designing, and developing marijuana-infused products, and marijuana concentrate products and brands; and acquiring, developing, manufacturing, and distributing products infused with non-psychoactive constituent of the industrial hemp plant. It operates through Marijuana-Infused Products and Hemp-Infused Products segments. The company works exclusively in jurisdictions where such activity is permitted and regulated by state law, through entities that hold a valid license to produce marijuana-infused edible products and to distribute, and dispense marijuana products.Recent DevelopmentIn November, Nutritional High International Inc. announced that it had sourced a California-based manufacturer who would produce for distribution in California FLI branded premium cannabis concentrates to Nutritional High’s specifications.The California manufacturer will utilize a cold-ethanol extraction process to produce, package and deliver consumer ready FLI branded vape cartridges under the FLI Premium, and High Terpene product lines. Calyx Brands Inc., a California-based distributor with whom Nutritional High has entered into a letter of intent to acquire, will distribute the FLI vape cartridges to over 430 medical dispensaries. Calyx will also distribute the FLI cartridges to adult-use cannabis dispensaries once permitted in 2018.Jim Frazier, CEO of Nutritional High highlighted that management was excited about its expedited entry into the California market. Partnering with a top-tier, fully-licensed, concentrate manufacturer and leveraging Calyx’s entrenched sales channels offers the firm strategic entry into the California market which has been a long term target. Getting its products on the shelves of dispensaries while advancing the Sacramento facility will allow SPLIF to build significant brand awareness to support the California vision for FLI branded products.He further explained that the cold-ethanol extraction process utilized by the firm’s California manufacturing partner is similar to that presently utilized by Palo Verde in Colorado. Under the supervision of Nutritional High’s extraction team led by Billy Morrison, expectation is high that the FLI concentrates offered for sale in California will be of the same premium quality as is currently generating great success in the Colorado market.More recently, the firm reported that it has entered into a definitive agreement with Canada House Wellness Group Inc.’s wholly owned subsidiary Abba Medix Corp. in connection with a previously announced Joint Venture to manufacture cannabis oil extracts and cannabis-infused products in Canada under the Access to Cannabis for Medical Purposes Regulations.The Joint Venture is structured as a 50/50 partnership and will see Nutritional High and Abba build-out a production facility at Abba's Pickering facility to house a cannabis oil extraction operation focused on producing the oils and extracts currently permitted under ACMPR.Nutritional High is working closely with Abba to secure a supplemental license from Health Canada for the production of medical cannabis oils. The Companies are looking forward to completing the facility build-out and servicing the Canadian medical cannabis market with alternative, more convenient and dose-controlled consumption methods. Once the appropriate regulatory frameworks are established, the Joint Venture will seek to service the Canadian recreational market as well.Larry Bortles, Chairman of Canada House explained that the partnership provides the company (Canada House) with a platform to become one of the leading cannabis extracts companies in Canada and opens up opportunities to tap the global market for cannabis extracts. This was in line with Jim Frazier’s comments on the Nutritional High team’s excitement to be moving forward with the joint venture while looking forward to working closely with Abba to replicate the operating model successfully deployed in the U.S. Company FinancialsA quick look at the firm’s statement of comprehensive income reveals that revenues grew by 185% year on year, rising from $0.16 million to $0.47 million in 2016. However, net loss increased by a 9% mainly as a result of non-recurring expenses accrued during the year.The firm is very highly leveraged as a large portion of its liabilities are long term debts which are likely to accrue interests. Its low liquidity of 0.17 means the firm is likely to raise new cash soon, except it can beef up its revenues in time to meet up borrowing and operating costs.ConclusionWith its new acquisitions and partnerships, SPLIF has enough potential to increase its market share and maintain its commitment to increasing shareholder value.We will be updating our subscribers as soon as we know more. For the latest updates on SPLIF, sign up below!Disclosure: We have no position in SPLIF and have not been compensated for this article.Image courtesy of Martijn via Flickr