Cannabis Wheaton Income (NASDAQ:CBWTF) just entered into a binding interim agreement with Inverell after buying 80 percent of the shares in the grow company. Inverell is one of the lucky few cannabis operators with a federal license, and they grow in Uruguay where they cultivate their own strains of hemp for medical use. This marks the first entry into Latin America for Canadian-based Cannabis Wheaton Income.
Inverell made a name for itself cultivating stevia, a popular sugar substitute, and now founder Dr. Raul Urbina is applying his molecular biology expertise to the hemp plant. Inverell currently harvests a hemp crop that contains 8 percent CBD with an exceptionally low THC concentration of 0.5 percent.
Currently, Dr. Urbina and his team are cultivating three unique strains of hemp that contain an even higher concentration of CBD, making it ideal for medical prescriptions. There are already 1.72 million square feet of hemp ready to be harvested in April of this year.
President of Cannabis Wheaton Income, Hugo Alves, recently stated in his press release, “This transaction helps us secure a significant amount of CBD-rich hemp production that can be exported to other federally legal jurisdictions for further processing into nutritional and pharmaceutical products. We expect to see a significant increase in global CBD demand over the course of the coming years.”
It appears that Cannabis Wheaton Income teamed up with the innovative Inverell just in time.
According to their website, Cannabis Wheaton Income prides itself on being the financial solution for cultivation companies who seek funding for their research without losing their autonomy in the process. By sponsoring growers like Inverell, Cannabis Wheaton Income is able to help cultivators expand their research without getting their hands dirty with the tasks of daily management. All they ask for is a percentage of the production, and Cannabis Wheaton Income sees an internal rate of return of about 60 percent on deals like these.
Most importantly, this investment strategy makes Cannabis Wheaton Income the first publically traded royalty marijuana stock.
As a royalty marijuana stock, Cannabis Wheaton Income not only sees such high rates of return, they’re also able to diversify their product portfolio. Their expansion into Uruguay builds on their already existing 15 partnerships throughout Canada. In a market whose reputation depends on diversity, this puts Cannabis Wheaton Income way ahead of the game.
Cannabis Wheaton Income predicts a 230,000kg annual yield of cannabis after this partnership. For us Americans, that’s a little over 507,000lbs of marijuana. It will be the largest yield of any Canadian marijuana stock in the industry to date, and its margins should also be significantly higher than its competitors for 2019. This is still after their cost of $2 per gram, which is well below the Canadian average of $6.20 per gram.
Since marijuana is still a Schedule I drug in the United States, it’s the Canadian market that investors need to keep an eye on this year. The projected 150 percent growth in this industry that’s predicted for 2021 will greatly depend on more companies like Cannabis Wheaton Income investing in cannabis cultivators around the world.
[Photo credit: David Rock Design]