Embark Health continues to deliver for MMJ Group

By Trevor Hoey. Published at Jun 1, 2020, in Small Caps

MMJ Group Holdings Limited (ASX:MMJ; OTC:MMJJF) continues to demonstrate its ability to successfully invest in early stage unlisted enterprises in the cannabis sector with the prospect of realising potential gains.

The group specialises in managing a portfolio of investments along the cannabis value-chain, and today it’s largest investee, unlisted Embark Health Inc informed the market that is production facility in Delta, British Columbia had been commissioned, and the production of bubble hash, rosin and dry sift had commenced.

This is a credible achievement given that Embark only secured its Health Canada processing licence less than three months ago.

MMJ was a foundation investor in Embark Health in July 2018, and it now has a shareholding of approximately 12.7% with a book value of C$2.40 per share.

The group also has warrants that provide the option for it to acquire a further 3.3 million shares in Embark.

MMJ has generated a total return of two times its investment with a current book value of $13.2 million.

It is worth noting that MMJ is total portfolio including cash was valued at $44 million as at 30 April, 2020, representing net tangible asset (NTA) value per share before tax of 19.3 cents.

Based on these metrics, the company’s share price would need to appreciate some 60% in order to trade in line with its NTA.

Embark ideally positioned to cash in on the value chain

Embark is an emerging leader in cannabis extraction, with a focus on reaping the full potential of the cannabis plant through scientific approaches to extraction and the production of quality products to enhance everyday life.

Management’s mandate is to pursue the best production processes throughout product innovation and development, manufacturing and take to market lifecycles.

Not only is this where the value lies, but the result is unparalleled commercial and consumer extraction products.

Embark’s key milestones have included the benchmarking and optimisation of cannabis biomass processing time to ensure the most effective length of treatment to optimise outputs with high purity while maintaining cost-effectiveness.

Test runs have been conducted to ensure equipment is effectively configured for the ideal balance of consistent throughput and purity.

Embark has also correlated biomass quality with extraction output, determining the most appropriate means to achieve the purity and unique properties that will provide it with a competitive edge.

With these operational factors in place, the company is developing a revenue pipeline consisting of tolling, contract manufacturing and the brokering of orders.

Dual brands to target recreational market

Embark continues to move forward with plans for two brands set to launch in the recreational market.

The group is launching a Value brand and an Approachable Premium brand with each comprising a selection of solventless products within their respective portfolios.

The brand product offerings and price points will address the demand for 2.0 solventless products within the different market segments.

In order to fulfil the increase in customer orders, production pipeline and achieve around the clock operations, Embark has begun the ramp up of its people strategy and is actively seeking additional personnel.

Management also said that it was pleased with Health Canada’s policy announcement on May 12, 2020 regarding ‘’Operational Changes to Cannabis Program Requirements’’, which permits licensed producers to expand on existing facilities without requesting lengthy amendments to their licence.

On this note, Chief Executive Dr. Luc C. Duchesne said, “This amendment is significant and allows Embark to accelerate the remaining facility retrofits to add production modalities in our licensed facility in Delta, BC.”


Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


SEE THE PORTFOLIO

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X