TransCanna Holdings Inc. (CNSX: TCAN) is on course to become a key player in the burgeoning California cannabis marketplace. The company is in the process of closing a transaction that will see it become a rightful owner of a fully enclosed cannabis production facility standing on 6.5 acres of land.
TransCanna Holdings Price Analysis
The stock has continued to register impressive gains ever since the company announced it was in the process of acquiring the 196,000 square foot facility as it expands its operations into California. The stock’s market sentiments also appear to have edged higher on the company closing a $10 million brokered private placement thus gaining access to much-needed financing for pursuing growth initiatives.
The stock is already up by more than 300% for the year as it continues to trade in a steep uptrend. A spike to the CA$5.75 level means any pullbacks, from current highs, will have to contend with support at the $3.51 mark, from where the recent rally began.
A breach of the $3.51 support level, on the other hand, could give short sellers a reason to assume control and push the stock back to the $2 mark the next support level. However, given the strength of the upward momentum, TransCanna Holdings is likely to continue climbing the ladder in continuation of the long-term uptrend.
What Does TransCanna Holdings Do?
TransCanna Holdings casts itself as a logistics company. The Company offers medical marijuana transportation and distribution services in Canada. The company distributes cannabis and cannabis-related products. It also provides branding and marketing related services to clients in the cannabis sector.
California $15 Million Purchase
Shares of TransCanna Holdings have taken a flight on the company moving to entrench itself in one of the biggest and fastest growing cannabis marketplaces. Expansion into California should expose the company to unique opportunities in the cannabis sector.
The company is in the process of closing an escrow for the acquisition of a 196,000 square foot facility. The fully enclosed cannabis facility that the company is acquiring comes with cannabis packaging and processing equipment.
With the $15 million acquisition, TransCanna Holdings is poised to become a vertically integrated cannabis facility. In addition to offering transportation services, the company is now poised to delve into the business of cannabis production as well as extraction.
“The intended use of the facility will be to transfer branded companies that we acquire, or that we create, and bring them in-house. This means we have complete control over our nursery, grow, manufacturing, extraction, and distribution. We believe the consistency in our ecosystem that we can offer, and the scale that we can create, will result in TransCanna owning a portfolio of premium brands that will materially benefit the retailer and their customers,” states Jim Pakulis, CEO of TransCanna.
The acquisition reinforces the company’s push to become a fully self-contained cannabis player in California. The company has already acquired an additional 5 acres adjacent to the facility where it plans to construct a 600,000 sq. Ft. three-story grow facility. The facility is to be used to supply biomass for the brands that the company acquires or creates
TransCanna Holdings has also secured a $16 million mediated private placement. Part of the new financing is to go towards funding the acquisition of the new facility. The company also intends to use part of the financing for the purchase of additional facilities as it seeks to strengthen its cannabis production capacity.
Early this year TransCanna Holdings signed a non-binding letter of intent for the acquisition of Goodfellas Group. With the acquisition, the company gains access to a full-service advertising and marketing agency for the cannabis and hemp industries.
“Through Goodfellas, we’ll have immediate access to many of the most successful dispensaries in California, and retailers throughout the US. In addition, we’ll be examining Goodfellas clientele to determine if there are potential acquisition candidates that fit our extremely critical vetting process,” added Mr. Pakulis.
What Next For TransCanna Holdings
TransCanna is likely to continue its solid performance in the market as it moves to pursue cannabis opportunities in California. A long-term ascending trend line supports further upside action given the solid fundamentals that continue to strengthen investor confidence in the company.
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Disclosure: We have no position in CNSX: TCAN and have not been compensated for this article.