The Green Organic Dutchman
The Mississauga-based producer made its first foray into Canada’s recreational market when it began supplying the Ontario Cannabis Store at the end of August. It said flagship strain Unite Organic has performed well online and in dispensaries, triggering a second order from the OCS earlier than initially anticipated.
“We are thrilled to witness such strong sales and positive feedback from retailers and consumers across Ontario, Canada’s most populous province at 14.32 million people,” said chief executive Brian Athaide.
The government-owned OCS had a monopoly on recreational cannabis sales in the province for the first six months after legalization and it retains permanent control over all online transactions. However, the Ontario Ombudsman has received more than 2,400 complaints about it since it began trading and sales in Ontario have not kept pace with less populous provinces.
Yet the brick-and-mortar retail market is beginning to open up: last month Ontario revealed the winners of a second retail lottery, which will triple the number of regulated cannabis stores to 75. These stores must enter a wholesale agreement with the OCS.
Athaide sees a great deal of potential in the Ontario market, and he said his team is ramping up production to bolster its footprint in the province. It will also target other parts of Canada in the months ahead.
The firm’s share price decreased 16.5% after a large block trade from Aurora on Sept. 4. The market reacted poorly to the news, but Aurora needed a cash injection and TGOD always knew that this move was coming.
Nothing has changed about the company, and its share price has since decreased further to $2.70, so we see TGOD as a screaming buy at these levels.
Phase one of its Valleyfield site is almost complete, and Health Canada’s decision approve its Hamilton greenhouse for cultivation has given it a significant boost. It is projecting sales of 2.500 kg in Q4 2019, and then 6,000 kg in Q1 2020. It could breakeven if it made a $3 profit per gram on 6,000kg of sales, based on its current costs.
The Green Organic Dutchman is a Market Awareness client of Capital 10X.
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