The competition will continue to increase as this cannabis company aims for its first revenues. Meanwhile, it plans to aggressively expand its growing facilities
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FSD PHARMA INC., $0.17, symbol HUGE on the Canadian Securities Exchange (Shares outstanding: 1.4 billion; Market cap: $238.0 million; TSI Cannabis Quality Rating (CQR): ; www.fsdpharma.com), holds a license to produce marijuana under the Access to Cannabis for Medical Purposes Regulations. It received its licence on October 13, 2017. The company received a Sale for Medical Purposes licence on April 18, 2019.
The Canadian Securities Exchange (CSE), formerly the Canadian National Stock Exchange (CNSX), is one of the country’s alternative stock exchanges. You can trade CSE-listed stocks through your broker. You can also get stock quotes at www.thecse.com.
FSD Pharma is headquartered at the former Kraft plant in Cobourg, Ontario. It aims to transform the facility into the largest indoor hydroponic cannabis production site in the world. FSD intends to target all legal aspects of the cannabis industry, from cultivation and processing, including the production of extracts, to manufacturing, and research and development.
That research and development will focus on novel cannabinoid-based treatments for several central nervous system disorders, including chronic pain, fibromyalgia and irritable bowel syndrome.
The company currently has just 25,000 square feet of growing space now producing its first crop, but it has an ambitious expansion plan. Phase 1 of the plan will add 820,000 square feet, while Phase 2 will add another 2.9 million square feet.
So far, FSD has no production revenues; in the three months ended March 31, 2019, its revenue of $18,500 came from subleasing a small part of its facility. It lost $2.3 million, or nil per share, in the latest quarter. FSD holds $17.1 million in cash.
The stock is likely to remain volatile and could move higher on investor momentum and interest in marijuana stocks. But FSD faces a couple of obstacles to lasting investment or business success. It needs to succeed with its ambitious expansion plans. It must then sell its significantly higher production into an increasingly competitive market. Meanwhile, though, it will likely have to undertake dilutive share issues at today’s low share prices before long to keep developing its planned production facilities.
The company needs to accomplish all this to justify its $238.0 million market cap, let alone make lasting gains.
FSD Pharma has a 2-Leaf Cannabis Quality Rating (CQR). FSD does not inspire our confidence, and we don’t recommend the stock.
Comments
Bill
This article did not mention that HUGE also had a breakup with a former supporting partner Auxly ; such things also do not inspire confidence despite what Fabrice Taylor has said about FDS Pharma in the past or present.
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This article did not mention that HUGE also had a breakup with a former supporting partner Auxly ; such things also do not inspire confidence despite what Fabrice Taylor has said about FDS Pharma in the past or present.
Thanks for your view on this cannabis stock.