SUNNIVA INC (OTCMKTS:SNNVF) Signs A Deal With CANOPY GROWTH CORP (OTCMKTS:TWMJF)

Investors sentiments on SUNNIVA INC (OTCMKTS:SNNVF) have recently strengthened after the company received 90,000 kilograms of dried cannabis order from CANOPY GROWTH CORP (OTCMKTS:TWMJF). Additionally, the recent incorporation on the OTCQX Markets exchange made us remain optimistic about the future performance of the stock.Recent price action also suggests that the stock price could increase, as trading volumes have recently increased. While the share price has declined from the 52-week highs of $15, we still believe that the recent momentum could push the share price up again. With trading volumes having surged above the 50,000 mark, the stock needs to close above the $10 mark to affirm the positive uptrend.On the downside, SNNVF has solid support at the $8 mark, below which it could drop to its 52-week lows. Check it in the following stock chart:

YTD chart for SNNVFBefore we review the catalysts behind the stock, let’s first see what the company is doing to enhance shareholder value.SUNNIVA Business OverviewSunniva is a vertically integrated medical cannabis company operating in California and Canada. Sunniva's primary long-term goal is to become the lowest cost producer delivering safe, high-quality products and services at scale free of pesticides and other contaminants. Image is taken from the Website of Sunniva - SUNNIVA INC OTCMKTS:SNNVFSunniva management and Board of Directors have a proven track record of creating significant shareholder value both in the healthcare and biotech space. We reviewed the team and different activities of SNNVF in our previous piece, which readers may revisit once again.There are two excellent new reasons behind the new upward trend in the share price.Upgraded to the OTCQX MarketFrom February 15, 2018, the company is trading on the OTCQX exchange. It is not only a grand announcement that recognizes the work of the company but will also open new opportunities to contact more shareholders. Furthermore, trading in OTCQX can enhance liquidity for the company, and extend investor awareness, which will result in cheaper financing for SNNVF. The news reinforces our bullish thesis on this name.Also, the exchange also congratulated the company with good words. Among them, the most significant were the following:"To qualify for OTCQX, companies must meet high financial standards and follow best practice corporate governance," said Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group.The agreement with CANOPY GROWTH CORP.Undoubtedly, the most interesting was the agreement with CANOPY. While this two-year agreement will enhance SNNVF's revenue line, but the most significant is that it is a significant milestone for the company. Canopy is not only a global industry leader, but it also owns substantial retail and distribution channels that will help Sunniva brand develop in the future. Finally, it is also worth mentioning that the fact that Canopy has chosen SNNVF should also be recognized. Leaders are usually quite picky about sharing know-how and signing contracts with new partners. Check what Canopy says about its new partner:

"We welcome Sunniva to the Canopy Growth family and look forward to collaborating with their team to provide a steady and high-quality source of cannabis products for consumers," said Mark Zekulin, President, Canopy Growth.

We believe that with this agreement, SNNVF has positioned itself very well for the year 2018. It has also come at the right time while the company is developing a new 700,000 sq. ft. GMP-certified greenhouse facility in British Columbia. When the company finishes this facility supply, the clients will be expecting its production. The Balance Sheet is stableIt is also critical to highlight that the company is very well equipped to grow. The total amount of assets is equal to CAD58.9 million, while the liabilities are limited; CAD29.3 million. In addition, the growth pace can be seen in the increase in the total amount of assets. In the last six months, it has increased more than 130% thanks to the acquisition of Full-Scale Distributors, LLC, CP Logistics, LLC, A1 Perez, LLC, Natural Health Services Ltd. The most significant increases were due to the Goodwill, intangible assets (Natural Health Services' software), and assets held for sale. Have a look: Balance Sheet (In thousands of Canadian dollars) - SUNNIVA INC OTCMKTS:SNNVFIt is also worth mentioning that SNNVF is finding financing to acquire other businesses. The company has sold $7.8 million in secured promissory notes. It shows that financiers have verified the business and are willing to put money on the table to help the company grow. Usually, the market prefers debt financing, like in this case, rather than raising equity. It is another good reason to appreciate this name.Please note that OTC Markets website is not correctly disclosing this information for some reasons. We believe that market participants may have problems to find the income statement. As a result, we believe that we have the edge over other market participants.What now?The company recently promised that more brand developments, as well as strategic partnerships, can be expected. This is critical and needs to be monitored. We need to remind that more supply agreements signed with distributors will be studied extensively by the market. The more agreements the company signs, the larger will be the expected revenue for 2018 and 2019. As a result, we expect more share price appreciations if new agreements are released. Be ready, because the market usually pays only to those making the hard work.Conclusion Currently trading with a market cap of $242 million, SNNVF is an exciting story among small caps. Already returning revenues of $10 million in the nine months ended September 30, 2017, we expect more to come. In addition, there are 27,104,226 shares outstanding and a float of only 14,226,086 shares. This means that a lot of volatility will be expected. Volatility players have now a new name to monitor closely.Be sure to check out our coverage on SNNVF!We will be updating our subscribers as soon as we know more. For the latest updates on SNNVF, sign up below!Disclosure: We have no position in SNNVF or TWMJF and have not been compensated for this article.Image courtesy of David Gach via Flickr