Canadian CANNAINVESTOR Magazine November 2018 | Page 306

DTEA makes the perfect case study because it is the story of a Canadian company that has had its challenges and how the cannabis industry could mark the turnaround DTEA and its shareholders are looking for. With the lawsuit dropped and the appointment of Anne Darche, we will see how these translate into increased sales and bottom line and from there share price. Because Anne Darche is also on the board of 48North, watching her success at DTEA could reveal what investors of 48North are counting on.

A case study this month on obvious topics such as supply shortages, retail profitability, the bearish trends, and on any specific cannabis company could get lost in the volatility of the sector at this time.

What you may learn about DTEA through your own investigation should help you short list companies in this sector. Is there a turnaround story here? Are major players knocking at the door? Is there brand recognition and loyalty? Are shareholders demanding change? Are there recent board and key managemet changes that may suggest opportunites?

If a company were to enter the cannabis space is it in the higher margin areas of edibles and beverages or to join the race to the bottom of a dry commodity?

Finding legitimate companies that enter into the space could be the next wave of superior ROI. Scot’s Miracle Gro, Constellation Brands and others (Pyxus International Inc) are proving this to be true. Diageo and Altria could be two more. We predicted years ago that large beverage companies would be the first led by alcohol and that has proven to be true with Constellation Brands (it was more than a year ago that they first invested in Canopy Growth).

We then predicted tobacoo would follow suit and that too has proven true with AOI/PYX. You may recall we did a case study on AOI/PYX in March 2018 and it was not really until September many others caught on. Our third prediction was pharma entering the market. Shoppers Drug Mart is now an LP and is part of the Loblaw Companies Ltd group of companies – LP Shoppers, massive retail distribution, household recognition and loyalty. So even if you dimiss DTEA as an investment, Loblaw Companies could be on your radar. But what about other pharma?

MannKind Corporation (DAQ:MNKD) has being make news latety withember, all content is for discussion and awareness purposes and is not investment advice of any kind.

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