NEW AGE FARM INC COM NPV (OTCMKTS:NWGFF) has been ripping higher as one of the strongest plays in the North American cannabis patch, stacking on as much as 1200% in the past 3 months in terms of gains for shareholders. The catalyst, to be sure, is a combination of recent key legislative moves in the United States and Canada, with more important moves coming from the Canadians sometime next year.
The stock is up about 69% over the past month of action, but has finally shown some kind of pullback to give shares a breather, and give new money a chance to catch up. Traders should clearly keep this stock on the radar given the set of catalysts in play and the fact that this stock has shown a historical tendency to make some huge moves. It also shouldn’t be overlooked that the name is seeing some massively increased attention in the market, as indicated by the recent jump in average daily trading volume (170% increase in volume, on average, over the last few weeks).
NEW AGE FARM INC COM NPV (OTCMKTS:NWGFF) trades in the market as a company that engages in the construction and marketing of warehousing and processing facilities.
It owns and rents a 5.5 acre agricultural property with a 48,000 square feet of greenhouse capacity and 80,000 cubic yards of saleable peat soil located in the Langley, British Columbia; and intends to build and rent turnkey facilities for growing and processing of recreational marijuana products at the Sumas Green campus located in Whatcom County, Washington, as well as the Oroville property located in Oroville, Washington.
The North Vancouver, Canada company currently earns a market cap value of $7.3M. The company has almost no cash on the books, with total assets a bit less than $6.7M, which compares with an appreciable load ($1.92M) of total accumulated debt.
Strong Catalysts Continue to Shape the Story
As noted above, the macro picture particularly works for Canadian-based cannabis plays right now. In Canada, legislation is likely to be on the table sometime next year to fully legalize pot on a national basis for all conceivable consumers, according to a promise made by the country’s PM Trudeau.
According to recent Forbes article, “Canada has an established national medical marijuana program within Health Canada that is well respected by many other countries and looked up to as a model to follow. The program is still making adjustments and improvements as it matures and determines what is and isn’t working. Now the country is tasked with figuring out how to legalize recreational marijuana. A task force was established and has been given the job to figure out to to deliver Prime Minister Trudeau’s legalization promise. The expectation is that recreational marijuana will happen sometime in 2017.”
Susan Boyd, a professor at the University of Victoria and a member of the task force. “The big question is what’s next,” she said. “Certain myths are quite enduring, They become moral issues and so it doesn’t matter about the evidence or our research conclusions.”
In addition, NWGFF has significant growth expectations in Washington state in the US, where Pot is already thriving as a fully legitimate market, much like Colorado.
In fact, the company just announced the completion of a 5,600 square foot state-of-the-art greenhouse cannabis production facility at its Oroville, Washington Green Campus which is capable of “growing, trimming, curing and storing product. New Age Farm’s on-site master growers (the “Master Growers”) advise that production at the newly completed facility is expected to begin November 30, 2016 for New Age Farm’s I-502 Tier 3 licensed tenant-grower. The Tier 3 license allows the tenant-grower to produce and process marijuana, producing up to 30,000 square feet of plant canopy in the facility compound. The Master Growers estimate that the initial harvest date will be approximately 90 days from the start of seed planting.”
Mr. Carman Parente, President and CEO of New Age Farm, commented, “We are extremely pleased that our Master Growers and operations crew continue to meet and exceed expectations helping us achieve this truly significant milestone at our Washington State Green Campus facility that our growing company needs to attain our strategic goals. Our assembled team of experts truly do provide complete seed to sale advisory and performance services for our Green Campus tenant-growers.”
It’s no wonder the company’s recent private placement capital raise was over-subscribed. The ROI should be clear net-positive for new money as the legal sales footprint for the underlying commodity (marijuana) continues to expand.
Given all of these factors, the stock possibly compares favorably to a number of other plays in the space, including CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) and AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF), which also have strong exposure to the Canadian marijuana sector, but have been more actively priced to include future growth.
We will keep close tabs on this exciting play and will follow-up our analysis soon.