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FSD Pharma Inc (CNSX:HUGE) Pivoting to Medicinal Biotechnology

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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.

FSD Pharma Inc (CNSX:HUGE) (OTCMKTS:FSDDF) (FRA:OK9) Executive Co-Chair Anthony Durkacz shares his thoughts on the impact of short sellers in the cannabis space and the company’s 2019 plans. Durkacz cautions interested parties to find the middle ground of any report and suggests Canada needs tougher laws to combat reports that mislead investors to the downside. Durkacz reveals FSD Pharma plans to pivot 75 to 80 percent of its business into biotechnology as the company believes medicinal biotech is the most lucrative aspect of the cannabis space. FSD Pharma is also considering value added edibles, which fits perfectly with its HQ location at a former Kraft plant. FSD Pharma is taking the necessary steps to uplist on the NYSE and Durkacz anticipates that occurring in the next two quarters.

Transcript:

James West:   Joining me right now is Anthony Durkacz, Co-Chairman of FSD Pharma. Anthony, welcome back.

Anthony Durkacz:   Thank you so much, James.

James West:   Anthony, I was very interested to have you on because we have this new culture has come up around the cannabis industry, and it’s the culture of, I’m going to categorize it as ‘idiot analysts who don’t know anything, taking pot shots at companies that are doing a lot, then making a quick score when they push the stock price down, moving on, and then the companies are revealed to have none of the problems stipulated by the analysts.’

And we’ve got just one such has taken a lewd shot of drawing bead on FSD Pharma, and everything that I’ve looked at about this guy – first, I’ve never heard of him, he’s got a, you know, a Seeking Alpha profile, which Seeking Alpha notorious for it’s the land of the undisclosed paid pumper dumper, it’s the land of the undisclosed run and gun short seller. So quickly, what were the points this guy was trying to make, these criticisms about FSSD Pharma, and what is the reality?

Anthony Durkacz:   Sure. So it is here, but I think, you know, one of the reasons why I want to talk about it is just to make sure that, I think every investor should be very, very cautious about what they read. And if something is too positive, or too negative, you really want to make sure that you get other people or trusted, you know, opinions from other people like your financial advisor and account and stuff like that.

James West:   You got it.

Anthony Durkacz:   But you know, in this case they talked about, you know, I have a track record of 92 percent over 11 stocks. In that article I actually had my analyst run our numbers, so you know, if you did look at the very height of our hit and then lowest it hit, could it be 92 percent down? Well, that’s true, but also if you looked at where we financed it and those 11 deals and their highs that they achieved after they were financed, that was a 2,600 percent gain.

So you know, the truth is going to lie in the middle. So I think anywhere it’s going to go, again: if it’s too positive, that’s typically people pumping or longs that, you  know, have a reason, and sometimes they’re doing that to sell their position; it’s the same way as a short seller would do when they’ve already sold short and then they come with these articles, hoping to scare, you know, the average retail investor. Which is really, you know, despicable in so many ways. And then that poor average retail investor panics, sells at a low price to go short to cover.

James West:   Let me ask you this: what kind idiot goes short on a $0.32 stock in the first place?

Anthony Durkacz:   That’s a good question. So in the case of FSD Pharma, you know, we are asset-rich.

James West:   Right.

Anthony Durkacz:   We have no debt. We are going to be alive for years, no matter what. We have great things in the pipeline, and so what’s the maximum that you can make is $0.32, to the downside; but we’re asset rich. The tide it’s never going to go there. You know, but, the upside is unlimited, so if you’re shorting a $100 s5tock, yes, is there a lot of room to go down? Yes, there’s $100 per share to go down. In this case, it’s $0.32 per share to go down, at your best.

James West:   Exactly. I found the whole thing ridiculous, especially, especially in the context of the last few short reports that came out, like for example, Andrew Left of Citron Research has almost zero credibility based on the fact that he told everybody to sell Cronos because there was no business there; Cronos is $24 just got $2.6 billion from Altria.

Anthony Durkacz:   Correct, correct.

James West:   He told everybody to sell Aphria, Aphria had no business, it was, you know, and actually was he the one on Aphria, I can’t remember that exactly, but anyways, I tracked a few of his picks, I found that he was right for a very short period of time on a couple, but not that it would have been any big win for anybody. And so I just, you know, every time I get a new report from him I just kind of laugh and say what rake this guy’s gonna step on now.

Anthony Durkacz:   And also I guess the risk with shorts is that, if you get caught on the wrong side and all of a sudden say like a stock has very news coming out or it gets halted and you can’t cover that position in a halt and you get gapped up, you can lose that entire fund. That’s the interesting part of it is, they can do well in short bursts, but when they get caught on the wrong side, those are massive, massive losses.

James West:   In Canada and the United States we have very tough, arguably strict rules about misleading investors. Publishing information that is considered misleading to induce them to buy stock based on something that may or may not happen.

Anthony Durkacz:   Yes.

James West:   Do you think that the laws currently governing what you’re allowed to say about a negative of the company is proportionate can and can’t be said that’s positive about a company, or do you think that we need to revisit the idea of misrepresenting facts to the downside and apply the same standard?

Anthony Durkacz:   100 percent, we have to. Because you know, these types of articles, and in this case, you know, the author has a series of other articles that are all extremely negative, but you know, are completely misleading, and a number of cases here are libel. The challenge is that the author and these companies, you know, they reside in Colombia, so for us to go and chase them for libel is going to do, realistically, what? For anybody? Is not really that much time factor. But when you look at the commissions, for example, and you look at the disclosures when anyone writes, whether it’s positive or negative, you know, they should be disclosing, well, how much are you positive or negative, and when, and at what price, right?

James West:   Right.

Anthony Durkacz:   So if you’re an author of anything, it’s whoever you’re doing it for, when did you buy or sell that stock, and what price, and how much. Those types of disclosures should be prevalent where the reader sees it not at the very bottom of the article, but at the very top.

James West:   Sure. That’s a good idea. Now tell us: what are the catalysts in 2019 that we can look for for FSD Pharma that are going to take the stock in the other direction?

Anthony Durkacz:   So you know, I’ll never comment on share price ever. What I’m very, very excited about is our move to the US. To NYSE, you know, we’re going to pivot into this very focused medical biotechnology side of the cannabis world. You know, being a cancer survivor myself, I have sort of a real soft spot for this sort of new frontier in medicine that’s about to unveil, and we’re seeing – you know, in Canada, the investment money wasn’t the same that it was a year ago in the cannabis sector.

In the USA and other countries, we’re beginning to see what we were seeing here about two, two and a half years ago, and it’s just beginning. And I think that in those markets, you know, it’s, as we all know, there’s just so much more money.

James West:   So FSD Pharma is pivoting full board towards biotechnology research?

Anthony Durkacz:   75 to 80 percent. So with the pivot, the rest will be operational. So you know, we’re in the middle of building, we are growing, we are cultivating, and we believe we’re very, very close to the sales license. And you know, the idea is that here in Canada we’re going to have an operating business that’s going to be profitable over the next 18 months.

James West:   Now you had, at your facility, you had several other businesses that were all starting to generate a very interdependent sort of relationship to each other where it was like, oh, this now makes sense. Instead of trucking this A to B, it’s just like no, we’ll take a conveyor belt or a wheelbarrow and just take it across the parking lot.

Anthony Durkacz:   Correct.

James West:   So is that still part of the strategy at the FSD plant?

Anthony Durkacz:   100 percent. It’s still part of the strategy. CanTab is building, world class extractions is building; we will make another announcement, I would say, shortly on something similar, and we’re also exploring, because we have so much room and space, some of the value-added areas. We’re getting approached by a lot of edibles companies that, you know, I think see the craft, formal craft plan as probably being a good place to make commercial edibles.

James West:   A good place to make cookies, cause you do get the munchies when you’re high! OK then, so FSD Pharma is moving towards a New York Stock Exchange listing?

Anthony Durkacz:   Yes.

James West:   Really?

Anthony Durkacz:   Yes.

James West:   And when do you anticipate that happening?

Anthony Durkacz:   It will happen within the next two quarters

James West:   Well, that’s fantastic. Okay, well, we’re going to leave it there for now, Anthony, I really appreciate the update and we’ll keep following the story. Thanks for joining me today.

Anthony Durkacz:   Thanks, James, for giving me your time.

James West:   Of course.

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.

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