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This seemingly unrelated news release with respect to board appointments to 48North Cannabis Corporation (TSXV:NRTH) could provide a clue. This news release from December 2017 is titled “48North Cannabis Co., parent company of licensed producer Delshen Therapeutics, adds industry heavyweights to board of directors”. One of these “indutry heavyweights” is “marketing guru” Anne Darche.
We can all agree that to some degree any given company’s current share price includes discounting (and that could be a 0% discount or even a negative discount so in fact a premium) for volatility and uncertainity. Investors tend to assign a low value to risks that are outside of their control. One such risk was a shareholder lawsuit against DTEA. On October 24th, the shareholders withdrew their lawsuit.
That is one reason why DTEA makes an intriguing case study this month because we are looking at a non-inudstry company. The withdrawal of the lawsuit will bring stability because part of the lawsuit’s demands was for the removal of a co-founder of DTEA who is also acting as the interm CEO.
The appointment of Anne Darche led some to conclude that was proof that DTEA would be entering the cannabis space and in particular what is expected to be in the high margin and high demand beverage subsector. A household name in much of Canada and premium products seemed like the perfect fit. Untiil October that is …
In October, David Segal (a DTEA Co-Founder) during an interview with Blookmberg TV made a reference to the effect of not having interest in the cannabis space. The share price of DTEA retreated. David Segal was in fact speaking about his company “Mad Radish” and was not speaking at all about DAVIDsTEA Inc - the company that he co-founded. In other words, regardless of what DTEA does or does not do with respect to the Cannabis space, this interview is what some claim contirbuted to the share price pullback.
If they are correct, we should see a share price correction to a degree. It is diffiuclt in the short run to assign any percentage of share price change to any single factor.
Now let’s turn the clock back to late September … in an interview with BNN in late September, it was reported that six Licensed Producers approached DTEA for a partnership. DTEA denied any formal relationship. So let’s look at this now from a speculative perspective … and I mean speculative in the true sense.
DTEA’s 2015 IPO price was $19 and its all time high of $27 was realized on June 5, 2015. Its share price has been in a steady descent since.
If we accept as true that six LPs contacted DTEA, then perhaps the appointment of Anne Darche may be a signal of readiness to start looking at the cannabis space.
Ane Darche is a marketing and consumers-brand expert and perhaps her appointment is as simple as that.
DTEA’s revenues and EBITDA have disappointed shareholders. What the cannabis beverage space brings:
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