There will be competition in any growing sector of the economy, but only a few winners will emerge from the crowd to become industry leaders. As investors, our responsibility is to seek out these winners and take a position before the mainstream media catches on and sparks a buying frenzy.
I don’t mind the media frenzy as long as I’ve already bought shares in the company beforehand. What my research team is looking for are strong revenues that beat expectations because revenues are the touchstone of a strong company, and that’s the basis of stock price appreciation.
When hunting for cannabis stocks to invest in, most individuals only look at companies that sell products directly to the consumer, or else they’re just looking at licensed producers. This is a crowded trade with stiff competition, and the well-known names among licensed producers and direct-to-consumer cannabis companies are vastly overpriced by now.
Don’t count on finding a ground-floor opportunity in those areas anytime soon. Instead, we’ve been looking in a different sub-sector entirely, and we’ve identified a business-to-business company that provides solutions for cannabis companies that cover technology and software-as-a-service, genetics, cultivation and extraction, retail, devices, and product branding.
Courtesy: TILT Holdings Investor Presentation
This company, TILT Holdings Inc. (CSE: TILT, OTC: SVVTF), addresses each touch point in the cannabis supply chain by providing all-inclusive software, services, and products for businesses in the cannabis space. Amazingly, over a thousand dispensaries and more than 400 brands use TILT’s software, hardware, and distribution services across 40 U.S. states, Puerto Rico, Jamaica, Canada, and Europe.
According to our research, TILT is unrivaled as a business-to-business cannabis-focused company and is continuing to expand rapidly. In fact, TILT recently acquired Blackbird Holdings Corp., the largest distribution platform in Nevada. Blackbird has already raised nearly $12 million in capital, and they’re conducting business with more than 1,000 dispensaries in 24 U.S. states and Canada.
What really caught my eye, though, is TILT’s revenues. As of January 10, Canaccord analysts forecast 2019 revenues of $461 million – an astounding number for a company of this size. In January alone, the company generated $18.3 million, according to a preliminary report, indicating that TILT’s foothold in the cannabis business-to-business market is now essentially unrivaled.
CEO Alex Coleman attributes much of the company’s blockbuster success in 2019 to the company’s ever-expanding reach into new frontiers of the legalized cannabis market. As Mr. Coleman points out, TILT is making great strides in the U.S., Canada, and Europe, and it recently entered into a joint venture in Macedonia, providing access to the European Union, with 512 million potential patients and customers.
Courtesy: TILT Holdings Investor Presentation
TILT’s Macedonia venture is significant, as the company’s partner is currently producing over 5 metric tons of cannabis per year, increasing to 13 tons in 2019, with exclusive manufacturing and distribution rights afforded to TILT Holdings.
Macedonia’s growing conditions are among the best in the world, and TILT will now be able to leverage these cultivation advantages into processing and distribution across the European continent for both THC and CBD. It’s a huge advantage for TILT, as the E.U. is an emerging market where the U.K. currently allows for the sale of CBD products and Germany allows for the potential sale of cannabis products in over 13,000 pharmacies.
As you can see, TILT Holdings’ competitive advantages are paying off big-time for the company, and the irrefutable proof is in their revenues, which are outstanding by any measure. TILT/SVVTF shares are a great investment today in a company that’s poised to dominate the business-to-business cannabis market both locally and globally.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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