If there is one micro-cap growth stock that might represent an extremely interesting opportunity right now, we would point to MCTC Holdings Inc (OTCMKTS:MCTC), now doing business now as Cannabis Global, Inc. (MCTC), with an imminent name change now in the works.
This stock jumps out at us right now for two main reasons: first, it is flying under the radar to an almost obscene extent, with a series of potentially huge moves stacking up over the past two months without any real response in the stock, and second, because the company just put out a watershed corporate update – a piece that seems to have gone almost completely unnoticed by the market, but one that effectively announced the start of commercial stage operations. That’s nearly always the most important moment in the life cycle of a publicly traded stock. The hint that we are transitioning from development to commerce is the green light for more engagement with a stock, provided you have reason to believe that the company has a substantive value proposition to market to investors.
MCTC Holdings Inc (OTCMKTS:MCTC) certainly fits that bill.
In its corporate update announcement on Tuesday morning, the company stated directly that it has begun to “transition toward monetization of its market-leading intellectual property involving isolation, infusion, and bio-enhancement of potent cannabinoids.”
That’s very direct language and is exactly what we want to hear. This was further backed up by the company’s management.
“This continues to be a transformative period for Cannabis Global as we start to realize a commercial return on our foundation of strong R&D investments,” commented Arman Tabatabaei, CEO of Cannabis Global. “We strongly believe we have positioned the Company as a market leader in the cannabis, hemp, and CBD products landscape. We have defensible unique IP that is increasingly in demand, as evidenced by our recent licensing deal flow. We anticipate a continued pickup in tangible agreements with downstream partners and distributors.”
What we know about MCTC is that it has genuinely powerful IP that is starting to gain traction through licensing deals that will likely be the company’s bread-and-butter for the first part of its assault on topline growth. In fact, this is already underway, with several deals recently announced, and several more likely in the works.
The model is, for the time being, to deliver superior isolation, infusion, and bio-enhancement of both CBD and THC through the licensing of proprietary methods and trade secrets that the company has developed or acquired over the past year. The company claims to have methods that can simultaneously lower cost and raise quality (bioavailability) for infusing CBD and/or THC into edibles, coffees, or sweeteners.
Given the accelerating deal flow we are seeing for this technology, the California cannabis market would seem to agree. One clear example of that substantive value is its recent deal with BudCars, the top emerging cannabis delivery outfit that just announced an expansion into the LA regional market. BudCars is stacking up massive growth and just signed a deal to license Cannabis Global’s proprietary tech for edibles distribution to its core customer base. BudCars is already on pace to do better than $30 million in annualized 2020 sales.
According to the company, Cannabis Global has recently filed six patents on cannabinoid extraction technologies and delivery systems. Management is currently working with patent counsel to protect various other technologies it has developed or is currently developing, including its programs pertaining to cannabinoid glycosides, polymeric cannabinoid nanoparticles and nanofibers, and its hemp extract-based alcohol replacement technologies.
We would also note that it is now testing a formulation that could provide a cannabinoid solution for weight loss, which could open up a massive new market opportunity.
The main point here is this: MCTC is flying under the radar even as the company takes monumental steps toward major revenue generation based on a foundation of clearly valuable IP with specific application in the monster cannabis structural growth trend.
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