When it comes to small-cap pot stocks, WeedMD Inc. (TSXV:WMD) (OTCQX:WDDMF) is one of the most overlooked in the industry. The company boasts one of the few outdoor grows in Canada, and is already creating a strategy for the infused cannabis market with a newly outfitted processing facility and a beverage partnership with Phivida Holdings Inc. (CSE:VIDA) (OTCMKTS:PHVAF). WeedMD is currently trading at little over $1 on the OTC, meaning right now is the perfect time for investors to take a closer look.
WeedMD launches new products after posting positive numbers for Q1 2019
In the first three months of 2019, WeedMD pulled in over $3 million in net revenue, a 23 percent increase over last quarter. Contributing to that is the fact that the company sold over forty percent more cannabis flower than last quarter, and they are currently sitting on more than $8 million in inventory and over $5 million in biological assets.
It is their backstock of supply that has some investors keeping their eye on WeedMD. The company is prepared to flood the market, creating brand recognition and brand loyalty with not only flower, but also new infused products, including a brand new recreational line called Color Cannabis that will be launching later this month. Color Cannabis was designed specifically with the recreational consumer in mind, offering up ten unique strains in both flower and oils to meet the evolving expectations that modern consumers are bringing into the market.
WeedMD is also underway creating new products for the new infused market waiting to launch in October. The pot stock inked a joint venture agreement with Phivida Holdings last summer to develop Cannabis Beverage Inc., a company that will tap into Canada’s billion-dollar CBD-infused market later this year. WeedMD will be the exclusive cannabis supplier and will help the new company obtain all the necessary licenses it needs to process infused beverages.
“We are thrilled to begin the development of this joint venture. With the launch of CanBev, WeedMD will be one of the first to introduce an innovative and popular consumption method with our cannabis-infused beverages—adding a new brand category for the medical and adult-use markets,” Keither Merker, CEO of WeedMD, said last August.
Per the agreement, Phivida will be providing its intellectual property, trademarks, branding, and packaging to the venture. Although no recent announcement has been made regarding their agreement, investors will note that Phivida recently acquired a new e-commerce website that will push their products throughout the North American market. While neither company can confirm that the website will also leverage the new CanBev products, it is safe to assume that both companies are well-prepared to meet customer demand once the infused market finally opens up in Canada.
WeedMD will be producing 150,000kg of cannabis annually by 2020
WeedMD continues to watch consumer trends and stay one step ahead of their expectations, and they have the cultivation space and processing capacity to do so. The company is sitting on a total of 5.2 million square feet of indoor and outdoor cultivation space, including a 110,000 square foot hybrid greenhouse. Included in that as well is the 100 acres of outdoor grow space that was just licensed by Health Canada in May. Only 27 acres are currently outfitted to grow cannabis, but the remaining outdoor acreage will be ready by 2020.
WeedMD also has space ready for the infused markets. The company is converting one of its 26,000 square feet facilities into a large-scale cannabis extraction operation that will produce 200,000kgs of biomass every year. The site, located in Ontario, is already fully-licensed for the production and sale of cannabis oils, and WeedMD is fully confident that they have enough supply to start producing oils by the end of the summer.
“All cultivation has been consolidated to our greenhouse and outdoor Strathroy facility, which is delivering consistently improving yields at increasingly competitive costs,” Mr. Merker explained in the press release.
When it comes to costs, WeedMD is producing cannabis at a little under $2.90 per gram, which is a bit of a drop from the $3.66 in Q1 2018. But with an infused market underway, WeedMD appears more than well-prepared to deliver on the new kinds of products cannabis consumers are looking for. The next two quarters will surely tell where this pot stock stands in the North American market, but cannabis investors should act quickly if they do not want to miss out on their chance to secure this stock before the price skyrockets.