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OTC:CPMD   Cannapharmarx Inc.
CannaPharmaRX, Inc. (CPMD)
Alert Price: $2.20
Float: 838.27K
CannaPharmaRx, Inc. (CPMD) aims to become a leading licensed cannabis producer in Canada

CannaPharmaRx, Inc. aims to become a leading licensed US Expansion Underway: CannaPharmaRx (CPMD) agrees to acquire California cannabis facility—production expected to exceed 100,000 pounds of cannabis per year. producer in Canada

The global cannabis market has been an extremely appealing investment sector with a revenue of $14.8 billion in 2019 — a robust 46 percent jump from the prior year.

while COVID-19 has had a dampening effect on many industries, the market is still expected to reach $47 billion by 2025, according to analysts at BDSA and Arcview Market Research.

The Canadian pot market, in particular, is poised for exceptional long-term growth. As one of just four nations with legalized pot, Canada is the largest fully legal recreational market in the world.

Combined with the country's roll out of its Cannabis 2.0 legalization of edibles, vapes, infused beverages and other products, Canadian cannabis producers could be a smart pick for investors.

The Canadian marijuana revolution is anticipated and CannaPharmaRx, Inc. (CPMD) is an under-the-radar producer that looks poised to explode.

Cannabis Production Climbing to Keep Up with Demand

Cannabis-related stocks are well below their all-time highs, although many have experienced a bounce along with the recent market recovery.

The legal marijuana industry is still in its early stages and has experienced sporadic growing pains, but the long-term expectation for marijuana is looking bright.

CannaPharmaRx has secured a role in Canada's growing cannabis economy as the focus on increased production intensifies.

IBISWorld estimates that revenue for the cannabis production industry in the country has increased an annualized 116.3 percent over the five years to 2020, reaching an anticipated $3.5 billion in 2020 itself.

CannaPharmaRx (CPMD) is positioned to become a future leader in ultra modern, highly efficient cannabis production facilities in Canada.

CannaPharmaRx, Inc. is focused on the acquisition and development of state-of-the-art cannabis grow facilities located in Canada.

The company owns a 48,500-square-foot cannabis grow facility presently under development and is currently in discussion with other companies regarding potential acquisitions.

CPMD’s business strategy is to become a leader in high-quality and low-cost production of cannabis through the development, acquisition and enhancement of existing facilities.

The company is committed to operating high-quality facilities utilizing the latest technology in combined heat and power generation to ensure being a low-cost producer of cannabis.

"While there has been a fundamental shift in the way many businesses are forced to operate due to these unprecedented circumstances, the need to produce high quality, pharmaceutical-grade medical cannabis in ultra-modern, highly efficient facilities remains constant. We are firmly committed to our unique business model," said Nick Colvin of CannaPharmaRx, Inc.

A Commitment to Quality

CannaPharmaRx, Inc. aims to produce the highest quality wholesale cannabis and hemp in the market in whatever format their business clients need it.

The cannabis sector has been saturated with vertically integrated producers and the company believes vertical integration is a short-sighted approach.

Instead, CannaPharmaRx, Inc. leverages its strengths by combining with other experts in the supply chain to provide the highest quality products to the industry.

With the sole focus of supplying the wholesale market with pharmaceutical grade cannabis, the company does not compete with its clients. It will supply the quality and consistency required as cannabis reaches a larger, more-discerning consumer base.

This will allow the company to meet its clients’ needs and collectively focus on the value that it creates for the consumer.

Entrance into Revenue Growth Phase

CannaPharmaRx, Inc. has entered into a fundamental revenue growth phase via strategic acquisitions and end-product opportunities.

The company is confident the strategy of acquiring complementary businesses and adding value will provide the most efficient path towards significant revenue generation.

"There are many undervalued opportunities that could benefit our business going forward. We believe we are entering a critical business phase that should enable material revenue growth for our company. Our plan is to continue to generate revenue through acquisition while simultaneously remaining active with the existing business within CannaPharmaRx," Colvin said.

"We remain confident with our growth forecast,” he continued. “Our commitment to become one of the top licensed producers in Canada remains our focus and we are excited to expand our vision as we increase revenues and continue acquisitions. The company looks forward to communicating with shareholders as materials events occur in the near term."

CPMD Stevensville Facility

CPMD Facilities

The company’s Hanover facility in Ontario was installed in May 2014 and includes 10 acres of land and a 48,800-square-foot growing space to produce 21,000 pounds (9,600 kilograms) of cannabis annually.

The Stevensville facility in Ontario was acquired in February 2019 and includes 38 acres of land and a 60,000-square-foot growing space to produce 27,500 pounds (12,500 kilograms) of cannabis annually. The site allows for expansion of several additional grow facilities. Production began Q1 2020.

Market Integrity

Among CannaPharmaRx's strengths are:

Access to unique financing to fund growth.
A marketing approach whereby CPMD will wholesale via fixed-price offtake agreements to other licensed producers.
Fixed operating costs achieved through operating agreements with experienced cannabis operators.
Unique construction methodology leading to low-cost production.
Utilization of on-site heat and power plants that support environment initiatives and contribute to low- cost production.
In addition, the company is strengthening its position in the market through a variety of moves:

Begun the process of moving from the Pink Open Market to the OTCQB. The OTCQB Venture Market is for early-stage and developing U.S. and international companies. To be eligible, companies must be current in their reporting and undergo an annual verification and management certification process.
In the process of completing an application to list its common stock on the Canadian Stock Exchange with initial trading anticipated to being during the third quarter of 2020.
Working toward closing the acquisition of the Okanagan Falls project, a 760,000-square-foot glass house located on a 114-acre parcel in southern British Columbia, CA. Once fully built out, the facility has an annual production capacity of 265,000 pounds (120,000 kilograms). As a result of the current pandemic, like many other companies, CannaPharmaRx has experienced certain delays with closing the financing for this acquisition. The company believes those issues have been resolved and expect to close on this investment during the current quarter.
Continues towards its goal of reviewing and researching multiple new acquisition and development opportunities within the area of cultivation and genetics.
Is fully expecting to file its annual report within the SEC's newly allotted time frames and intends to update shareholders periodically.
Expansion Plans

CannaPharmaRx, Inc. is also looking to expand with a new genetics division.

In addition to accurately labeling the varieties of cannabis, genetics is one of the most impactful issues within the current industry.

The importance of genetics cannot be underestimated in creating the desired effects for consumers and patients.

According to an article in Nature, David Kideckel, a cannabis analyst with financial-services company AltaCorp Capital in Toronto, Canada, describes genetic engineering as a “disrupter” that “promises to take a centuries-old agricultural practice into the biotechnology era, with the resulting ripples being felt throughout the cannabis sector worldwide.”

As the cannabis industry progresses, cultivators are increasingly trying to develop new strains through crossbreeding. Genetic modification could enable industrial-scale production of cannabinoids that have pharmaceutical potential. "Different cannabis users are looking for different results within the various strains of cannabis they are utilizing. We are very excited by the prospect of incorporating a genetics division into the company to not only ensure quality control, but also to produce the best possible product,” Colvin said. “These genetics can also help us to develop heartier strains that are able to grow in a shorter time period, thus enabling us to get the end product to the user as quickly and efficiently as possible."

The Bottom Line

Pot stocks could be ready for a major second-half 2020 rebound.

CannaPharmaRx Inc. may start getting recognized by Wall Street for its production facilities and plans in Canada.

According to BNN Bloomberg, for every 1 gram of cannabis priced at $10 in Canada, producers are estimated to profit $3.60. In addition, it is estimated that the private sector will generate close to $1 billion in EBITA with 85 percent coming from production and the rest from retail.

The loosening of government regulations has resulted in strong demand for the cannabis industry. In addition, the passing of the Cannabis Act and Cannabis 2.0 being rolled out in Canada have created a strong opportunity for industry producers such as CannaPharmaRx, Inc.

CannaPharmaRx, Inc. (CPMD) could become one of Canada's biggest and most important companies in the cannabis market and is worth watching at current levels.
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