Medical marijuana update: Supreme (C.SL) shows Creative Edge (FITX) how to ramp it up

Chris Parry Chris Parry, Stockhouse.com
13 Comments| May 13, 2014


Newsy day on the medical marijuana front as several companies are moving to the next stage of the sector’s life cycle, looking to acquire, merge, sign options and generally bulk up.

 
Thelon Capital (TSX:V.THC, Stock Forum) President Scott Walters announced today that company has signed an MOU to purchase a 30% interest in The Cannabinoid Medical Clinic, thereby securing a foothold in the patient acquisition space (and also closer to the dreaded TSX Change Of Business process).
 
Thelon’s stock price has leveled off of late, like many, and the announcement today didn’t do much for that price, sending it down 13% on the day.
 
 
PMX Communities (OTCQB:PMXO, Stock Forum) announced they’re making a push with their LXIV BUD BOX medical marijuana terminals (read: vending machines) into the California market, fresh off the news their machines would need to be manned and not include any actual marijuana in Colorado… no news on whether California would feature the same restrictions.
 
Previously they’ve sold gold bullion vending machines. Presumably to survivalists and Ron Paul voters.
 
 
Anexco Resources (CSE:C.AXO, Stock Forum) signed an LOI to acquire 100% of a BC interior grow facility capable of being scaled to 60,000 sq. ft (it’s much smaller currently), and presently capable of producing 2500 kilos of weed annually. The facility has not yet applied for an MMPR, but did grow under the old system. Anexco was up 16% on the deal.
 
I’m not so into Anexco following conversations at the GreenRush conference. Their plan is to brand BC Chronic as a world recognizable brand is a good one, but they want to keep it to only their products which is the kind of all or nothing play that increases investor risk for negligible return.
 
But hey, they’re in the race to a deeper extent than many companies – godspeed.
 
 
 
Supreme Pharmaceuticals (CSE:C.SL, Stock Forum) did a big promotional push today on the news they’ve got a second acquisition target and it puts a large piece of the Supreme puzzle in place.
 
The company has zeroed in on a southern Ontario greenhouse facility that has a pre-build approval from Health Canada to put together a 342,000 sq. ft. grow operation that will produce up to 24,000 kilos of pot annually.
 
The facility already exists. It was built by Agriculture Canada but needs to be upgraded to cater to weed and not tomatoes, and it needs to be inspected by Health Canada to get its full license once that happens.
 
But it’s a real thing. You can touch it. The city it’s located in is okay with it. The company expects to be Health Canada-ready in 90 days, initial production is expected by Q4 and over two years it will cost $5.5 million to complete the deal.
 
This is what I’d call a GOOD DEAL, and the market agreed, cranking the share price up 40% on the news. Congrats to the Supreme faithful for your glorious return.
 
 
 
Compare and contrast time: Hunter S. Thompson once told me, in between shots of Chivas and some Turkish bubble hash that had me analysing the hairs on my elbow for four hours, that if you’re not getting hate mail, you’re not a journalist.
 
So thank you, Creative Edge (OTO:FITX, Stock Forum) cultists, for confirming that I am indeed a journalist.
 
Yesterday’s medical marijuana update was the opposite of what we see with Supreme Pharmaceuticals today: It was all about how Creative Edge’s CEO has a habit of making bold statements that he can’t (yet) back up, and how anyone who had invested in the company’s claim that it will build ‘the world’s largest marijuana production facility’ was buying a promise the company had yet to figure out how to deliver on.
 
To recap: The Mayor of Lakeshore, where Creative Edge has purchased its facilities, hasn’t received any application for the largest marijuana production facility in Ontario, let alone the world. And the city isn’t sure it can get water to a facility much bigger than what’s permitted (60,000 sq. ft. – the size little Anexco’s planned facility maxes out at), and the company only has permits for five employees, and they don’t yet have an MMPR, and the city has given permits for a warehouse and a fence, not a gigantor so much weed that you can smell it in Guelph grow op, and when they actually do get an application for what they’ve planned, it might take six months to do proper investigation to see if it’s even possible.
 
Of course, for many, that information is helpful. After all, a failure to do paperwork in a sector that will be hamstrung by bureaucracy for the foreseeable future is a big deal. And a major selling point for the company that may not be actually possible is something the company should answer to.
 
Especially when there were allegations from earlier in the year that CEO Bill Chabaan was telling people Health Canada were pushing him to get his application done so they could approve it, something Health Canada denied and FITX management blew off as unimportant when it was exposed.
 
That little PR issue was eventually almost forgotten with time, but this new issue points to a pattern of behaviour that should give investors pause.
 
It won’t – at least, it won’t give every investor pause - if the torrent of baseless idiocy that I’ve had thrown at me in the last 24 hours from certain sectors of the FITX shareholder base is any guide.
 
People who follow FITX on InvestorsHub, or on the company facebook page, blow off the issue as, in no particular order, me shorting the stock, me being paid by other companies to kill the stock, me being a slimy douchebag, me being paid per click, me not trusting management who are totes smarter than me, me misquoting the Mayor, me being unprofessional because I used the word ‘bullshit’… basically a tsunami of “SHHH, Shut up bro! I’ve got my 401K all up in this mofo an ur ruinin’ my crap! LOLZ”
 
Here’s the deal: Creative Edge’s marketing push is to keep saying “largest marijuana production facility in the world’ over and over. If pressed, the CEO will say “well, in five years maybe,” but only if pressed. Otherwise, it’s everywhere.
 
Look at their Facebook page and see what the company is pushing:
 
creative-edge-fb.jpg
 
That’s one screenshot showing three stories all on the same story arc:
 
How to Build Canada's Largest Medical Marijuana Grow Facility - Video - TheStreet
 
World’s largest legal pot facility to open in Ontario
 
Cannabis Super Grow Facility Nears Completion in Canada - MainStreet
 
There’s even a video embed of a Seth Myers monologue from The Late Show that mentions the largest ‘and most efficient’ marijuana factory in the world, pointing out ‘most efficient marijuana factory in the world’ is a pretty low bar to aim for.
 
There’s nothing there saying, “Actually guys, we won’t be achieving this for the next five years”, or, “Well, we’d have to get a lot of regulatory stuff done first,” or “We don’t really have the money for that but we hope to soon,” it’s just straight up repetition of the same (I’ll say it again) bullshit line, that assumes Creative Edge has the money, demand, permits and pieces in place to put together ‘the largest medical marijuana facility in the world’.
 
They have none of the above. No money to build more than they’ve built, no actual distribution or customer base, no permits beyond a warehouse and fence, and no infrastructure to run the largest of anything.
 
But clearly, ‘largest ever’ is the story that Creative Edge Nutrition wants to push. They do not want to push “We’re building a medical marijuana facility with five employees about the same size as Anexco” as a selling point. They don’t want to push “We hope we get an MMPR approval” as a selling point. Because you guys won’t buy that stock. Because it’s no more interesting than any five other companies I could mention. Because it doesn't back a $200m+ market cap.
 
There are other questions to ask of FITX, like are they concerned that they’ve distributed almost their limit of possible shares? Is that why they had to go to private financing when the Growlife deal fell through? How are they going to finance expansion when there’s no room for a private placement? Why don’t they have a website? And why, if they’re doing so much business in Canada, do they only list on the OTC?
 
Let’s be clear: I don’t care if the stock goes up or down. That’s not my job, I don't own it, nor work for anyone shorting it. My job is to ask questions any good company can answer in its sleep, and reveal when a company doesn’t fit the definition of ‘good’. What the people on iHub do with their pension money is not my concern. Whether you’re up 400% or down 3000%, that’s not my business, nor my motivation. I provide the accurate and bias-free information, and you then do with it what makes you happy.

If Creative Edge gets to a place where they can fix all these paperwork issues, that's great. That's ideal. I would like nothing more than for, in six months, a slew of dudebro's to hit up my Twitter account with "haha, I told ya so, ya moran", because that would mean nobody got scammed.  If you get rich on a pipe dream, that’s awesome, as long as the guy on the other end of your trades had clear and full information to base his or her trades on, not Seth Myers monologues.
 
If a mine operator started claiming that their silver mine was going to be the world’s largest without any actual data or funding to make that happen, investors would burn the core shack to the ground in rage and follow the coke trail back to the CEO’s home where they would curbstomp him for giggles. Investors in junior resources have seen those types come and go and there are regulatory mechanisms to prevent them from re-emerging. Not so much in the OTC, and (sadly) not so much in the weed sector.
 
A 60,000 sq. ft grow facility (with no value-adding) is a fine business in and of itself (as Anexco would happily point out), assuming it gets its MMPR approval. That’s the real Creative Edge story right now. Outside of that, they’re behind Tweed and Supreme Pharmaceuticals on the whole ‘world’s largest’ goal, and right now have a smaller customer base than the Pigeon Park Compassion Club.
 
And no manner of hate mail from bagholders is going to change the fact.

FITX down 6% today.

Before we wrap this one up - a quick note to those classless penny stock vultures who think the correct response to questions being asked about their company is to get personal and attack the messenger in the thinking he'll go away, or leave your stock alone, or find another line of work: You clearly don't know me very well.

I'm not some part time blogger hoping to make a few bucks shorting -this is what I do. I've worked alongside people who have bulletproof glass on their living room windows and get death threats every other day. I've worked with people who were held at gunpoint in Rwanda. I worked with legendary promoter-destroyer David Baines, who policed the Vancouver exchange for decades like a crusading hammer of justice. I've worked on award-winning journalism projects that took down gangs and changed the law. 

So if I say your company management needs to pick its game up, your options are for management to pick their game up or be beaten down to putty. I work for my readers, not penny stock slingers.

Offense freely given to those who choose to accept it at my Twitter feed. Exclesior, d-bags.
 

THE MOVERS:
Supreme Pharmaceuticals Inc   0.070 +0.020 +40.00% 12.87m
Jourdan Resources Inc.   0.035 +0.005 +16.67% 155k
Anexco Resources Ltd.   0.180 +0.025 +16.13% 10k
MODERN MOBILITY AIDS INC   0.120 +0.013 +12.15% 509.86k
Satori Resources Inc.   0.050 +0.005 +11.11% 607k
West Point Resources Inc.   0.050 +0.005 +11.11% 62.3k
Papuan Precious Metals Corp.   0.105 +0.010 +10.53% 689.34k
PMX COMMUNITIES INC   0.024 +0.001 +6.19% 475.16k
Enertopia Corp.   0.245 +0.010 +4.26% 23k
Crailar Technologies Inc.   1.150 +0.040 +3.60% 9.34k
GREEN AND HILL INDUS INC   1.310 +0.010 +0.77% 66.14k
88 Capital Corp.   0.205 0.000 0.00% 0
Abattis Bioceuticals Corp.   0.880 0.000 0.00% 217.34k
Alchemist Mining Inc.   0.070 0.000 0.00% 0
Ansell Capital Corp.   0.050 0.000 0.00% 0
Growlife Inc   0.110 0.000 0.00% 7.19m
Pan American Fertilizer Corp.   0.070 0.000 0.00% 0
Seaway Energy Services Inc.   0.340 0.000 0.00% 0
Southbridge Resources Corp.   0.450 0.000 0.00% 0
Terra Firma Resources Inc.   0.015 0.000 0.00% 1.52m
Senator Minerals Inc.   0.105 0.000 0.00% 0
Prominex Resource Corp.   0.025 0.000 0.00% 0
Cavan Ventures Inc.   0.035 0.000 0.00% 156k
Ressources Affinor Inc    H   0.490 0.000 0.00% 0
Chlormet Technologies Inc.   0.465 0.000 0.00% 0
Calyx Bio-Ventures Inc.   0.070 0.000 0.00% 0
Rango Energy Inc   0.087 0.000 0.00% 0
Majescor Resources Inc.   0.060 0.000 0.00% 4.51k
Pacific North West Capital...   0.065 0.000 0.00% 17k
Spearmint Resources Inc.   0.050 0.000 0.00% 7k
Green Swan Capital Corp.   0.070 0.000 0.00% 300
Arrowhead Gold Corp.   0.060 0.000 0.00% 1,000
Totally Hip Technologies Inc.   0.180 0.000 0.00% 0
GreenBank Capital Inc.   0.145 0.000 0.00% 0
PREMIER BRANDS INC   0.002 0.000 0.00% 64.48m
Lexaria Corp.   0.255 0.000 0.00% 0
ROSTOCK VENTURES CORP   0.037 -0.001 -1.35% 31k
EASTON PHARMS INC   0.024 -0.001 -2.49% 4.43m
Naturally Splendid Enterpr...   0.300 -0.010 -3.23% 60.98k
Windfire Capital Corp.   0.130 -0.005 -3.70% 160k
Global Hemp Group Inc   0.075 -0.005 -6.25% 18.5k
CREATIVE EDGE NTRTN INC   0.078 -0.005 -6.46% 36.47m
NEXT GENERATION ENERGY   0.028 -0.002 -6.67% 5.62m
Tweed Marijuana Inc.   2.690 -0.210 -7.24% 724.03k
Meridex Software Corporation   0.270 -0.025 -8.47% 253.38k
Next Gen Metals Inc.   0.190 -0.025 -11.63% 11.95k
Thelon Capital Ltd.   0.065 -0.010 -13.33% 3.29m
Maple Leaf Green World Inc.   0.060 -0.010 -14.29% 188.3k
Weststar Resources Corp.   0.030 -0.005 -14.29% 567.85k
AXE Exploration Inc.   0.030 -0.005 -14.29% 75k
Victory Ventures Inc.   0.030 -0.005 -14.29% 19.95k
 
 
 


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celcius
Check out CMT Facebook page. They released reno pictures last night.
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May 14, 2014
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Boug1234
Love your articles keep up the great work :) just one question why is it that were always hearing about these grow places out west or in Ontario is any of these companies planing on opening in Quebec or out east ? Just to let some one out there no theres a great big airport called mirabel were they don't no what to do with just a thought
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May 13, 2014
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cparry
So I went to the Creative Edge Facebook page (they don't have a website) and offered to back any statement, answer any question, and give CEO Chabaan an opportunity to 'clarify' where my story was wrong. He banned me and deleted my comments. Says it all, don't you think?
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May 13, 2014
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daffid
Another article, fitx looks for re-zoning. http://blackburnnews.com/chatham/chatham-news/2014/05/14/medical-marijuana-facility-seeks-expansion/
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May 14, 2014
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Citizendex
Ha ha. Speak the truth and shame the devil, Chris! Stomp em out like a cocroach.
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May 13, 2014
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blk04a4
sooooo because Creative Edge chose to post 3 articles that were written about the company on their facebook it means they are full of it? Do you know anything about the future plans of the company? the new 25 acre purchase for R&D is what, just fluff? You seem to be extremely biased and tunnel vision on one aspect of the company. hopefully people do their own research instead of reading this garbage and believing it
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May 14, 2014
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MakeMeMoney
You tell em Chris! Tell the world!
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May 13, 2014
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zuluprinciple
im confused about Supreme....dont they say they have the "Ready to Build" Status? But i see it as 5.5M plus 65M shares....or is it 45% more shares so its actually 117M shares. HELP
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May 14, 2014
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GaiusOctavius
Savvy investors are buying cheap shares of C.WOF (Woulfe Mining). C.WOF is in strategic negotiations with Warren Buffett's company IMC part of the Berkshire Hathaway group of companies. Two scenarios could take place here. 1) Goodman's Dundee Corporation makes a buyout offer on Woulfe Mining. 2) Buffett's Berkshire Hathaway makes a buyout offer on Woulfe Mining.
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May 14, 2014
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jaberwock
Finally someone has stepped up and told the truth about Creative Edge - Well done Chris. Take a closer look at Supreme - today's announcement left readers with the impression that they have secured a large licensed MMJ op for virtually nothing. In reality, they have an option to buy a tomato growing greenhouse and join the queue with about 400 others to get an MMPR license.
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