Green Organic Dutchman Holdings Ltd (TSE: TGOD) (OTCMKTS:TGODF) is trading precipitously higher over the past couple of sessions, breaching the important $5.00/share level earlier today. The premium organic cannabis LP is showing uncommon strength not yet a month into its initial public offering (IPO) listing, as well as general sector outperformance.
The main catalyst appears to be an under-the-radar press release disseminated by TGOD on May 29. The company announced it had entered into an exclusive agreement with Stillwater Brands to license its RIPPLE SC (Soluble Cannabinoids) ingredient technology. The product is a proprietary, patent-pending suite of water-soluble ingredient products that can be used to infuse cannabinoids into beverages and food products. It also overcomes the problem of dissolve-ability, in which CBD and THC are notoriously hydrophobic.
While other companies have developed similar products, Stillwater Brands is among the leaders in the space (a simple Google web search bears this fact out). TGOD also redefines the company as a premium refined goods producer, and not simply an organic farming entity. Should the stock make consistent headway above $5.00/share and forge a market capitalization into the 10-digits, greater institutional interest is sure to follow.
In light of euphoric investor response, a company to watch is Xanthic Biopharma Inc. (CNSX:XTHC) The company produces a similar THC powder compound which can be infused in water-based solutions. The company also has the ability to license-out production in existing partner facilities in a rapid, non-invasive and low-cost manner. All they need are a few thousand square feet in a licensed production facility.
A quick look at Xanthic’s price action won’t inspire anyone to act. The stock has been languishing at six week lows, since listing on the Canadian Securites Exchange on April 19. While TGOD’s press release was the catalyst which inspired technical buying above all-time highs, Xanthic will not experience any such luck.
However, it’s a story investors may want to keep their eye on. Infusable cannabinoids will definitely become a high-growth niche market, and other LPs will likely begin partnering-up. TGOD has simply raised the niche’s profile, and established a front-running position of their own.
Adding $150 million in market capitalization will tend to raise eyebrows—even if the Stillwater deal was only part of the equation.
The Green Organic Dutchman is currently trading at $5.00/share, up $0.33 (↑7.07%) on the session.
Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.
Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.
Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.