Medical marijuana update: Consultants profit while Supreme (V.SL) locks in grow deal

Chris Parry Chris Parry, Stockhouse.com
4 Comments| April 22, 2014


If you’re a mining company switching to being a weed company, and you don’t yet have a weed consultant, your pickings are starting to get sparse.
 
Four companies announced deals with consultants today, that being the traditional second move, coming right after the ‘we’re exploring options in agriculture, biomed and mining’ news release and right before the ‘we have an option on a grow property that may or may not get a license some time’ newser.
 
Greenbank Capital (CSE:C.GBC, Stock Forum) added a medical marijuana consultant today in Dr Stefan A. Hulea, who has a background in biochemistry and has written a book on pain alleviation with MMJ. I’m not sure if Dr Hulea knows anything about growing marijuana or distributing it, or marketing it but, for his trouble, Dr Hulea will be given warrants to purchase 100,000 shares of the company at.. the exact price it opened at today.
 
Cavan Ventures (TSX:V.CVN, Stock Forum) announced it had placed a professional project manager and a former field officer in the Canadian Military named “Mr. Lawson” to its advisory board Tuesday. If you’re looking for a first name, the news release about him won’t help much as it isn’t mentioned at all. I did some digging and found out the guy’s name is Dix Lawson, and he has more letters after his name on his LinkedIn profile than anyone I’ve ever seen. He’s an OMM, a CD, an MPM, a PMP, and a PCIP.
 
In contrast, all you’ll find on my LinkedIn profile is PIMP, HACK and LOLZ.
 
Papuan Precious Metals (TSX:V.PAU, Stock Forum) announced the hiring of an owner of several medical marijuana dispensaries in California, Colorado and Arizona as a consultant today. Drew Milburn is their man, and they say he’s acted as an advisor to Health Canada in the past, as well as serving twelve years as a Marine.
 
The news release reads well but Milburn’s company website is down and his personal website is… sparse to say the least. And his Linkedin profile says he has an education from the University of Phoenix, an online open-enrollment university that gives you college credit for ‘prior learning assessment’: IE: If you’ve worked, you’re halfway to a degree.
 
I’m not saying Milburn doesn’t know anything about selling weed: clearly he does. But so does my old roommate Neil, and the only thing I’d pay him to consult about is who’s the guest on Ellen this afternoon, and whether the Doritos Extreme Zesty Sour Cream and Cheddar flavor actually tastes anything like zesty sour cream and/or cheddar.
 
I’ve always seen the consultant news release as weak sauce, personally. For me, it translates to, “we don’t know what we’re doing, but we know a guy,” and most investors don’t do too much digging into who that guy is.
 
To be fair, a good consultant can be a game changer. Windfire Capital (TSX:V.WIF, Stock Forum) added a brand and marketing expert with 35 years’ experience to its board of directors today in Robert Harrison. He has consulted for companies such as Heinz, Nabisco, Nestle and Slim Fast, and the announcement pushed that stock up 40% to $0.14, the biggest upward move for that listing in the last month. Windfire can be proud it brought in a heavy hitter with genuine company building chops, and the market is rewarding it.
 
But such big moves have been rare in this sector.
 
Admittedly, when a mining company brings on a consultant for IR, exploration, moving to production, or raising finance, that’s generally seen as smart play. But you also assume the CEO and the board doing the hiring know a little about mining going in, so they don’t hire someone who once cleared a few trees on the back forty with a backhoe as a Qualified Person.
 
How many CEOs of former mining companies now in the dot.bong world have any knowledge of the marijuana world beyond a quick drag out back of Brandy’s during a ‘gentlemen’s business lunch’?
 
The only one I know of is Bayhorse Silver (TSX:V.BHS, Stock Forum), whose CEO Graeme O’Neill once inspected licensed grow ops for the city of North Vancouver. But even with that background, the company brought on two medical marijuana specialists to explore options in the sector.
 
Supreme Pharmaceuticals (CSE:C.SL, Stock Forum), which announced yesterday it was done with the Venture Exchange, hasn’t publicly announced that they’re looking to consultants to blaze their trail, but they did today announced the completion of an option on a South Okanagan, B.C.-based grow facility for $150,000 in cash and $100,000 in shares, at a deemed price of $0.05 per share.
 
According to the company, “The [facility] has been in production since May of 2013. The current operator of the facility has successfully and cost effectively facilitated personal license holders' production of monthly amounts of medical marijuana in full compliance with all regulatory authorities. The facility includes three green houses, a purpose-designed drying room, processing machinery, an office, and appropriate indoor equipment storage. All electrical, plumbing, security, and related plant and equipment are built to full commercial standards.”

Important to note: “The MMPR application is nearly complete and it is anticipated that it will be submitted by the end of April 2014. The application is for a production licence of 45 kilograms per month of medical marijuana to be produced in a significantly larger facility. There is no guarantee that the application for the MMPR licence will be successful.”
 
Should the license fail to be approved, the deal will presumably be off. If it receives a conditional license, Supreme has 60 days to lock down a $1.25 million purchase on the plant.
 
The due diligence process was extended three times previously, so this is big news for Supreme… but it’s still all hinging on the license being approved, and there’s no guarantees on that.
 
NEW PLAYERS:
Announcing their shift to medical marijuana in late March is Anexco Resources (CSE:C.AXO, Stock Forum), which was formerly Bison Petroeum. They’ve just announced they'll change their name (again) to B.C. Chronic Inc., with the intention of branding weed and associated products with what they hope will be an internationally recognized symbol of quality. As far as business plans in this space go, I’ve seen worse.

Anexco is now helmed by former director now President Michael Martinez, who says his ten years experience in the ganjasphere includes having created a marijuana trimming and processing machine called the Centurion.

THE MOVERS:

PREMIER BRANDS INC   0.003 +0.001 +65.00% 121.95m
Windfire Capital Corp.   0.140 +0.040 +40.00% 109.5k
GreenBank Capital Inc.   0.150 +0.025 +20.00% 3.04k
PMX COMMUNITIES INC   0.030 +0.005 +18.47% 260.99k
Next Gen Metals Inc.   0.255 +0.035 +15.91% 73.18k
AXE Exploration Inc.   0.040 +0.005 +14.29% 438k
EASTON PHARMS INC   0.036 +0.004 +13.06% 17.25m
Weststar Resources Corp.   0.050 +0.005 +11.11% 73.8k
Alchemist Mining Inc.   0.110 +0.010 +10.00% 133k
Naturally Splendid Enterpr...   0.285 +0.025 +9.62% 53k
ROSTOCK VENTURES CORP   0.057 +0.004 +7.29% 246.41k
Thelon Capital Ltd.   0.080 +0.005 +6.67% 3.2m
MODERN MOBILITY AIDS INC   0.139 +0.009 +6.54% 328.45k
Green Swan Capital Corp.   0.100 +0.005 +5.26% 35k
Enertopia Corp.   0.375 +0.015 +4.17% 53.35k
88 Capital Corp.   0.250 0.000 0.00% 0
Abattis Bioceuticals Corp.   1.280 0.000 0.00% 364.23k
Ansell Capital Corp.   0.050 0.000 0.00% 0
Growlife Inc   0.502 0.000 0.00% 0
Seaway Energy Services Inc.   0.340 0.000 0.00% 0
Southbridge Resources Corp.   0.440 0.000 0.00% 0
Senator Minerals Inc.   0.135 0.000 0.00% 0
Supreme Pharmaceuticals Inc   0.050 0.000 0.00% 3.44m
Prominex Resource Corp.   0.025 0.000 0.00% 0
Cavan Ventures Inc.   0.050 0.000 0.00% 808.42k
Maple Leaf Green World Inc.   0.075 0.000 0.00% 48.17k
Chlormet Technologies Inc.   0.465 0.000 0.00% 0
Crailar Technologies Inc.   1.230 0.000 0.00% 0
Majescor Resources Inc.   0.070 0.000 0.00% 54.58k
Bayhorse Silver Inc.   0.110 0.000 0.00% 1,000
Pacific North West Capital...   0.070 0.000 0.00% 28k
Spearmint Resources Inc.   0.085 0.000 0.00% 0
Totally Hip Technologies Inc.   0.180 0.000 0.00% 0
Victory Ventures Inc.   0.040 0.000 0.00% 43k
RANGO ENERGY INC   0.080 0.000 -0.12% 537.85k
CREATIVE EDGE NTRTN INC   0.086 -0.001 -0.69% 26.87m
Calyx Bio-Ventures Inc.   0.085 -0.005 -5.56% 159.92k
Arrowhead Gold Corp.   0.085 -0.005 -5.56% 5k
Pan American Fertilizer Corp.   0.075 -0.005 -6.25% 178.68k
Tweed Marijuana Inc.   3.380 -0.310 -8.40% 1.36m
West Point Resources Inc.   0.050 -0.005 -9.09% 46k
Meridex Software Corporation   0.225 -0.025 -10.00% 133k
Global Hemp Group Inc   0.085 -0.010 -10.53% 142k
Jourdan Resources Inc.   0.035 -0.005 -12.50% 80k
NEXT GENERATION ENERGY   0.029 -0.006 -17.09% 6.62m
Papuan Precious Metals Corp.   0.070 -0.015 -17.65% 775.13k
Satori Resources Inc.   0.065 -0.015 -18.75% 1.25m
Ressources Affinor Inc    0.300 -0.090 -23.08% 3.52m
Terra Firma Resources Inc.   0.015 -0.005 -25.00% 125k
 
Check back daily for the latest news in this sector.

For more stories on this sector, see our Medical Marijuana section.

Follow me on Twitter at @ChrisParry

Send tips, news, suggestions to chris(dot)parry(at)stockhouse(dot)com



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Comments

cparry
No AFI news today. I like that company though. As for those who pay for marketing through Stockhouse, Bayhorse and Calyx are current clients, but editorial coverage isn't something we sell - and if we write specifically about them we disclose the fact.
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April 23, 2014
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antonaki1
Great article, some laughs too. Keep us informed on Bedrocan anytime you hear anything new, that was really interesting yesterday. I'm also wondering about SEW like the fellow above as i own that but everytime i tried to contact them in the last month the phone was allways left on a busy signal. They are certainly keeping something on the quiet. Company CEO Kyle Stevenson from what i can tell was a former broker.
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April 22, 2014
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jujibird
No mention of AFI today ? They are spoken about so minimally yet have one of the countries prominent grower/ players at the helm. Curious. Possible to see a list of those who pay for play on Stochouse within this group of companies?
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April 22, 2014
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Chris1029384756
Another informative and entertaining article, thanks again Mr Parry! I'm curious about the Seaway (V.SEW) situation, how long do you think this halt will last?
2.5 stars
April 22, 2014
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