Analyzing Some Exciting but Unknown Marijuana Stocks

Analyzing Some Exciting but Unknown Marijuana Stocks
Analyzing Some Exciting but Unknown Marijuana Stocks

The marijuana sector of the stock market has been a wild one. I first became interested in this segment in 2013, when in the midst of a growing optimism in the future of the legalised marijuana industry, we saw a huge bull run in every listed marijuana-related stock (see 5 Marijuana Stocks Going Crazy and Marijuana Stocks: The Madness Is Back). Since then, the progression of the legal marijuana industry has only continued: ten states in the US now allow adults to consume cannabis, with nine approving the retail sale of the drug, and the rather common sense viewpoint that many existing laws and punishments regarding the recreational use of marijuana were unjustly-harsh has continued to grow sympathy. In this new climate, I believe it is more or less inevitable that the trend of more states continuing to legalise marijuana will continue, and with it, the demand for marijuana-related products. That view is clearly well-received. One report from Arcview Market Research even estimates a projected growth in legal cannabis spending of 38% to $16.9 billion in 2019, going on to reach $31.3 billion in 2022.

Many are already familiar with the main marijuana-related stocks that aim to capitalise on this potentially massive industry and are traded on major stock exchanges including Canopy Growth Corp. (CGC), Aurora Cannabis (ACB), Tilray (TLRY), Aphria (APHA), and Cronos Group (CRON). There are also a number of marijuana-related stocks that have a long history of trading on the lesser OTCBB or Pink Sheet exchanges such as Medical Marijuana (OTCPK:MJNA), Hemp Inc. (OTCPK:HEMP), and Cannabis Science (OTCPK:CBIS). As those are (or at least were) reasonably well-known and covered by many analysts, I will not go over them here. Rather, I am interested in the many marijuana-related stocks traded on the OTCBB and Pink Sheet exchanges that have only fairly recently hit the market and appear to have gone largely unnoticed, yet continue to slowly grind up and make new developments.

Please note that the following stocks do not have comparable assets or business operations to most of the marijuana-related stocks traded on larger exchanges and, normally, do not have their earnings or financial statements audited. As such, they represent major risks. One should be extremely careful in investing in them, and be aware that they could go out of business any time.

Chemesis International Inc. (OTCQB:CADMF)

Chemesis International is a Canadian-based company that cultivates, manufactures, distributes, and retails cannabis products in California, Puerto Rico, and Colombia. First being listed on the OCTBB in late November 2017, the company reported unaudited results of revenue of about $2.8 million CDN (around $2.1 million USD) for the quarter ending December 31, 2018, representing a 47% increase from the previous quarter. The exact breakdown of that revenue is not clear, but at least, part of it is from the company's "Desert Zen" facility which offers distribution and transportation services, as well as its so called Jay & Silent Bob brand. Outside of the US market, CADMF will presumably also be much more active in Puerto Rico in future as their subsidiary, Natural Ventures, had signed a purchase order for a minimum of $4 million annually (though it is odd that the company or vendor they are doing business with is not actually revealed).