CBD play: Ayurcann Holdings (AYUR:CN)

challande

Written By: Marc Challande

Francophone

Published : April 28th, 2022

Ayurcann stock (AYUR.CN), a Canadian cannabis extraction company specializing in the processing and co-manufacturing of pharma-grade cannabis and hemp to produce various derivative cannabis 2.0 and 3.0 products in the medical and recreational market, has recently provided an update on its growth in production and market share in recreational cannabis in Canada. Recently, Ayurcann has received its flower sales license amendment from Health Canada which became effective April 19, 2022 . The Flower Sales License will allow Ayurcann to sell dried cannabis flower products in Canada through authorized distributors and retailers.

ayurcann stock

Significant News

The company has shared a lot of important news about its expansion strategy.  This license will allow the company to sell dried cannabis flower products in Canada through authorized retailers.

April 20th: Ayurcann announced it received its flower sales license amendment from Health Canada. This license will allow the company to sell dried cannabis flower products in Canada through authorized distributors and retailers. According to the company, these products are highly demanded by distributors and consumers. 

April 12, 2022: Ayurcann announced it reached its 1,000 distribution point in Canada. The company announced it introduced new brands, including Bravo 6, Xplor, Her Highness, Hustle & Shake, Joints, and Vida, to the market and growing its exposure throughout the country. All these new products plus more exposure in the provinces (NB, ON, MB, AB, SK) where Ayurcann is implemented will support the company’s path toward continuous profitability and growth.

In the meantime, Ayurcann announced options and restricted share units (RSU) grants. Ayurcann granted an aggregate of 133,233 Options and an aggregate of 821,500 RSUs to certain directors, officers, employees, and consultants. Each Option is exercisable for $0.17 per common share, expires three years from the grant date, and vests immediately. Each Option is exercisable to purchase one common share in the capital of the Company.

April 6, 2022: The company provided a corporate update on this date.

Extraction & Refinement – annualized capacity of up to 300,000 kg and offers services that include bulk extraction, winterization, and fractional distillation.

Bulk Oil Sales – growth with consistent inventory of over 300 kg of THC and CBD available, providing the gold standard for bulk oil for licensed producers, manufacturers, and brands in the medical and recreational cannabis space.

White Label – solutions by working with multiple national and international brands for product development and commercialization, the Corporation has the knowledge and experience to successfully bring products to market.

ayurcann

Share Movement

The share price is currently at $0.15 for a current market cap of $18M. Investors witnessed a 52-weeks high of $0.265, and the stock price is now close to its 52-weeks low of $0.14. Despite great news and strong financials, the company’s valuation is suffering from many uncertainties outside of Ayurcann. With the inflation, and geopolitical conflicts, the CBD sector is bearish, and this sentiment is even stronger in growth companies.

The stock is currently down 15% Year-over-Year and faces well the bearish sentiment. In comparison, HITI is down 56% Yoy and FAF 68%.

Moreover,  the company’s volume didn’t decrease, which is a positive sign that AYUR still has traction. Most companies traded on the CSE index saw their volume significantly reduce. Its volume is steady, with an average of 86k shares daily traded.

About chart data, its RSI is at 49, meaning the company is neither overbought nor oversold. Bollinger bands indicate we could see daily fluctuations between $0.15 to $0.17. Moving averages confirm the bearish sentiment. Its Simple MA (200) is at $0.18, above the Simple MA (20), at $0.16.

Share Structure/Fundamentals

The company currently has 121M shares outstanding, with 24.9M warrants (exercise price: $0.18) and 3M options (exercise price: $0.165. The company currently cant exercise them as the stock price is below the exercise price. 

On February 22nd, the company reported great financial results (the period ended December 31st):

  • Ayurcann reported revenues of $3.2 million for the three months ended December 31, 2021, compared to $1.5 million for the three months ended December 31, 2020, an increase of 106% year-over-year and 71% increase over the Q1 for the three-months ended September 30, 2021. Revenues for the six months ended December 31, 2021, were $5.1 million, a 115% increase over a similar period in 2020.

  • Ayurcann reported gross margins of $1.8 million for the three months ended December 31, 2021, compared to $302,000 for the three months ended December 31, 2020, an increase of approximately 500% year-over-year, maintaining substantial control over sales and operating income. Gross margins for the six months ended December 31, 2021, were $2.7 million, compared to $408,000 in 2020, a 569% year-over-year increase.

Bottom Line

The company is facing the bearish market sentiment well, is expanding its product range and market exposure. Its strong and growing fundamentals are very positive and prove the company looks very promising in the long term side. Once markets pick up some steam, companies traded on junior exchanges will see investors coming back at them.

This article solely expresses the opinion of the writer which might be disagreeing with the other writers of Money,eh?. Moreover, the writer is not involved in AYUR, and does not own shares of the Company .

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