Maricann Group Inc Separating Itself From The Junior Cannabis Pack

Benjamin A. Smith
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Maricann Group Inc (CNSX:MARI) (OTCMKTS:MRRCF) (FRA:75M) continues to display relative out-performance versus its small cap peer group today. The stock is currently up $0.09 to $1.69/share (↑5.63%), almost reaching the $1.75/share warrant exercise price which still has two years before the closing date expires. It’s a fantastic beginning for those who bought into the private placement, which closed on August 10th.

For those following the sector, this recent burst of strength shouldn’t come as a surprise.

While Maricann Group was battling negative sentiment stemming from lingering skepticism pertaining to events surrounding the termination of a $70 million bought deal financing and subsequent insider investigation, all they’ve been doing is executing.

In late June, Maricann Group made a quantum leap towards leaving the past behind when it inked a 550,000 gram (minimum) supply deal with provincial crown corporation Manitoba Liquor & Lotteries (MBLL). Not only was the company’s first offtake agreement a PR and optics shot-in-the-arm, we speculated that it might prelude a much-needed financing on Bay St. Sure enough, that’s exactly what happened—no doubt fortified by larger subsequent supply agreements in both Alberta and British Columbia.

Later on, we also noted that the market may well view Maricann’s $40 million private placement raise as a big net positive. Although the placement was offered on a “best efforts” basis, and the warrant exercise price was subsequently lowered from $2.50 to $1.75 to woo fence-sitting investors, turns out the analysis was spot on.

Post-financing, the company is going on the offensive to raise its asset profile further, which many consider undervalued.

On Monday, Maricann announced the official launch of MariPlant, the Company’s European nutraceutical product line. MariPlant products will be available for sale in Germany, with strategic expansion planned throughout the European Union. The company is only one of a handful of Canadian LPs with EU-GMP certification, and subsequent ability to wholesale product throughout the continent. Obviously, that’s a very valuable asset on its own.

A couple days later, the company announced that it had successfully exported dry cannabis flowers to Germany from its EU-GMP certified facility in Langton, ON Canada. While this development was already expected by the market, it nonetheless provided crystallizing optics that the future is now—both from an export and operational perspective.

There have also been a plethora of ‘Langton progress’ videos hitting social media and affiliate websites recently, showing the build-out as progressing smoothly. Once Phase 3 at Langton is completed in 2019, Maricann will be pumping out around 95,000kg of dried cannabis flower per year.

Outside of a select few Big Cannabis compatriots, no other junior LP is positioned to issue that type of salacious presser. It’s the kind of release that demonstrates Maricann is more carnivore than minnow in the shark tank. The more the market learns of positive developments in Germany—the golden jewel of the cannabis world with 80 million people and strong CDN/EUR exchange rate—the better.

Final Thoughts

Maricann Group could be among the few long-term survivors in Canadian junior cannabis space today (<$500 million MC). With EU-GMP certification, patented cannabinoid delivery technology, a strong Germany presence, three provincial MOUs under its wing—and now the cash to sidestep a potential liquidity crunch while it completes its signature grow-op in Langton—Maricann has ample going for it right now.

The private placement was the missing piece to coalesce the entire puzzle into place. It assured the company enough wiggle room to meet its build-out requirements, and bridges Maricann into the post-legalization period when revenues start flooding in. Gradually—and now suddenly—the market is waking up to Maricann’s uniquely positioned value proposition.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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