Cannabis Wheaton Income Corp (OTCMKTS:CBWTF) shares appear to be marking new key technical support and a line in the sand in the course of the latest stretch of this broad sector correction in the cannabis patch. Helping to drive recent strength, the company just announced that it has entered into a strategic alliance agreement with Ontario-based research and development firm Honest Inc. (d/b/a Province Brands of Canada).
According to that recent release, the agreement stipulates that Cannabis Wheaton will “assist Province with the establishment and licensing of a cannabis facility focused on the research, development, and commercialization of cannabis-based beverages.” That has helped to buoy shares in recent action and give this stock a bit of a lift above other similar plays in the sector.
Cannabis Wheaton Income Corp (OTCMKTS:CBWTF) trumpets itself as an investment company that seeks to provide investor returns through streams and capital appreciation in the Canadian cannabis industry.
The company operates as a cannabis streaming company. It provides funding for cannabis facility expansions, operations, and initial construction in exchange for minority equity interests and a portion of the cultivation production.
The company was formerly known as Knightswood Financial Corp. and changed its name to Cannabis Wheaton Income Corp. in May 2017. Cannabis Wheaton Income Corp. was incorporated in 1987 and is based in Vancouver, Canada.
According to company materials, “Wheaton Income is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.”
As noted above, CBWTF appears to be outperforming the cannabis patch in recent action, with the company’s new strategic relationships helping to power that outperformance.
Dooma Wendschuh, Co-Founder and CEO of Province, commented, “Today marks a giant leap forward for Province in our mission to create a safer and healthier alternative to alcohol. We are thrilled with the opportunity to partner with Chuck, Hugo and the rest of the Cannabis Wheaton team on this adventure, as Province aims to become the first company to develop a premium line of beverages brewed exclusively from the cannabis plant, as well as other premium cannabis-powered alcohol-free beers and spirits. Here’s to a partnership which we hope will create tremendous value for Province and Cannabis Wheaton’s shareholders and create lots of phenomenal cannabis-based products for everyone else.”
Hugo Alves, President of Cannabis Wheaton, stated, “We are very excited about this collaboration with Province. We believe that our regulatory and industry expertise, coupled with Province’s accomplished team, will be a winning combination for both companies as we work to develop unique consumer products and formulations which we believe will eventually play a huge role in the cannabis industry and ultimately be disruptive to the alcohol industry. We look forward to partnering with Province and helping them build an industry-leading global brand in the cannabis beverage vertical.”
Recent action has seen 6% piled on for shareholders of the name during the trailing week. The situation may be worth watching. CBWTF has a track record that includes a number of dramatic bounces. Furthermore, the name has seen a growing influx of trading interest, with the stock’s recent average trading volume running 17% above the average volume levels in play in this stock over the longer term.
Earning a current market cap value of $279.3M, CBWTF has a significant war chest ($26.1M) of cash on the books, which stands against virtually no total current liabilities. CBWTF is pulling in trailing 12-month revenues of $51K. However, the company is seeing precipitous declines on the top-line on a quarterly y/y basis, with revenues falling sharply. As more color becomes clear on the name, we will review the situation and update our take.