In my blog post on January 4th, I listed four new stock picks of mine in 2018. Those were ThreeD Capital Inc. (OTCPK:BWSOF) (IDK.C), MGX Minerals Inc. (OTC:MGXMF) (XMG.C), Fanlogic Interactive Inc. (OTCQB:FNNGF) (FLGC) and UpSNAP Inc. (OTC:UPSN) (UP.C). IDK, XMG and UP have all gone on nice runs, though did give a lot of that back. It looks like it is now FLGC's turn as I have noticed the start of a U.S. promotion:
This Tiny Digital Company Is Using Blockchain In A Revolutionary Way by smallcapstocks.com
FanLogic: the New Crossover Play Uniting Blockchain and Cannabis by fastmovingstocks.com
Both articles have a similar tone and message. The latter made mention that it was compensated $5,000 in the disclaimer. There was no mention of any compensation by the former that I could see. Recall what I said in my piece on January 4th:
I find the digital token for loyalty programs to be of interest. I have never been a fan of loyalty program companies as they are in a saturated market and the small cap ones I've seen have failed miserably in trying to turn a profit. A new generation thinking of a loyalty program through a digital token might be what is needed to re-energize this industry. This is also a similar concept to what APP is proposing to do with Citizen Green and its digital token so people who have benefited from a profitable investment in APP can appreciate the opportunity with FLGC.
So whether these sites got paid or not, I agree with their conclusions that FLGC's attempt to revolutionize the loyalty industry through blockchain and digital tokens is a valid speculative business. Both articles mention the recently announced LOI between FLGC and Belgravia Capital International Inc. (OTCQB:BLGVF) (BLGV.C) for "the joint development of the world’s first unified cannabis automated industry loyalty rewards program".
If you recall my blog post on December 31, I said that Global Cannabis Applications Corp. (OTCQB:OTCQB:FUAPF) (APP.C) looked like the next weed and blockchain stock set to explode. FLGC has the same three ingredients:
- An early-stage/pre-revenue blockchain business
- A weed connection
- U.S. promotion
APP went from $0.43 to as high as $0.99 in the days that followed and is at $0.67 now. Now APP has the Citizen Green token and Tony G on its side so it could have something to say about FLGC's claim of being the world’s first unified cannabis automated industry loyalty rewards program. There could be enough differentiation between APP's token which will reward people for participation on the Citizen Green platform and FLGC's token which will likely be more closely related to purchasing behavior. But something to consider is that if two Canadian companies that I happen to follow closely are getting into the weed token business, there must be others out there trying to do the same thing. Both APP and FLGC need to move fast in order to be the Bitcoin or Ethereum of the cannabis world, instead of just one of the million weedcoins that will eventually be out there, lost in the shuffle of a future saturated market.
However, industry headwinds that FLGC may one day face are less important to me as an early-stage speculative investor or to others who are traders merely looking for an opportunity. FLGC isn't as large of a holding as some of my others, but I still own a significant stake in the stock. Let's compare FLGC to APP and another blockchain-related stock of mine, Fintech Select (OTC:SLXXF) FTEC.V):
FLGC has a $27 million non-diluted market cap. This is cheap compared to a lot of blockchain stocks out there which are up more on hype than substance, but I'm not invested in those stocks. APP has about a 50% premium to FLGC at a $39 million market cap while FTEC is trading at barely over half of FLGC's market cap at $14 million.
In my opinion, both FTEC and APP are further along in development of their respective businesses than FLGC. FTEC has over 20 cryptocurrency points-of-sales locations currently open, in addition to its legacy business. APP seems to be on the brink of growing its CannaLife app and digital token business, giving away three tokens to everyone who downloads it. CannaLife is still in the 100-500 download range and there isn't a lot of activity yet, but it is ahead of the LOI stage between FLGC and BLGV.
I don't have any official target on FLGC. But should the stock attain a price of well over $1.00, which I think can happen upon further U.S. promotion, there is a good chance that I will flip some shares for my cheaper blockchain plays unless they also move up a lot during that time. In the larger context of the blockchain industry, FLGC could support a market cap in excess of $50 million and stock price in excess of $1.00. But at that price it would be worth more than the market cap of FTEC and APP combined. Looking at how stocks run, and then pull back, I have learned that short term moves are all about promotion. FLGC has that going for it right now.
The long term sustainability of the stock prices for FLGC, APP and FTEC will depend on how well each company profitably executes on each respective business plan. Short term moves will depend heavily on who wants to promote them. And right now it looks like U.S. traders are waking up to this speculative opportunity in FLGC. The U.S. symbol FNNGF had 133,000 shares traded on Monday. This may seem like nothing, but it is more than double the volume of any other day in recent history. Pay close attention to the volume on FNNGF going forward.
Disclosure: I am/we are long FNNGF, FUAPF, BWSOF, SLXXF, UPSN, mgxmf.
Additional disclosure: I hold positions in securities as disclosed in this article and may make purchases or sales of these securities at any time. I have not received any compensation for this article and all opinions reflected herein are my own. The information provided herein is strictly for informational purposes only and should not be construed as a recommendation to buy or sell, or as a solicitation of an offer to buy or sell any securities. There is no guarantee that any estimate, forecast or forward looking statement presented herein will materialize and actual results may vary. Investors are encouraged to do their own research and due diligence before making any investment decision with respect to any securities discussed herein, including, but not limited to, the suitability of any transaction to their risk tolerance and investment objectives.