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When CBW first listed on the TSX:V this past May, many investors did not understand their streaming model or how it could be monetized in the cannabis space. This uncertainty seemed to spark a coordinated campaign to discredit the company and its management team. Since then, the company has raised and deployed tens of millions of dollars towards their unique streaming model.
Cannabis Wheaton describes them-selves as LP 2.0. The company provides producers and applicants the capital necessary to
build or expand their capacity in exchange for equity and a percentage of that streaming partner’s cultivation yield at a pre-determined price. What investors may find particularly attractive about this is that the company has signed deals with 15 streaming partners in 6 provinces. This makes them the most well diversified of public companies, which mitigates the risk associated with being in one province, or in one facility.
In exchange, these producers and applicants gain access to less dilutive (in some cases non dilutive) capital, resulting in a mutually beneficial relationship for all parties.
The CBW team, lead by Chuck Rifici (co-founder of Tweed Inc.) is among the most impressive in the industry. It is comprised of Ivey League MBA’s, senior cannabis industry advisors, leading ACMPR security consultants, among many other specialized experts. A full list of the team can be found in its corporate deck.
Highlights:
15 streaming partners in 6 provinces.
Industry leading management and strategic advisory team.
Pharmacy deal for medical distribution and sales.
1.4 million sq. ft. of production space by 2019
Although there haven’t been any provinces yet to announce retail recreational sales through convenience stores, the company
has been proactive in covering all its bases. On October 16, 2017 the company announced that it had entered into a strategic partnership with a major convenience store that operates over 350 stores for the sale of recreational cannabis, if and when permitted.
In May, 2017, the company inked a deal with Harvest One (HVST.v) to finance the construction of their Lucky Lake facility in Saskatchewan. This gives Wheaton exposure in SK, a province with only two current LP’s. If provinces continue to favor local producers, this could prove to be a very lucrative investment for CBW. In the event that Lucky Lake receives approval, the proposal is for HVST to spin it off into a new company that HVST would own 49% of and receive 40% of its production.
On October 3, 2017, the company listed common share purchase warrants on the TSX.V under the symbol “CBW.WT”. For investors new to the concept of publicly traded call warrants, they present a unique opportunity for leverage (gearing).
Cannabis Wheaton Income Corp.
TSXV: CBW
As At Date 10/17/2017
Shares Outstanding: 205,063,900
Share Price: $0.99 Market Cap: $203,013,261
Warrants: $0.135 Strike Price & Expiry: $1.50 June 29, 2019
By William Weady