Jan 3, 2023
As part of our series on North American cannabis operators that have been especially impacted by the recent selloff, we want to present Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF). The company is unique and has leverage to both Canada and the United States (US) and we consider the business to be differentiated due to the brands that it owns.
Currently, Heritage is capitalizing on Missouri and West Virginia in the US and we are favorable on this part of the business. Although Missouri and West Virginia are not considered to be high-profile markets in the US, we expect Heritage to use the markets as a launchpad to expand into other states in the US.
Last year, Missouri voted in favor of legalizing recreational cannabis and we expect the development to benefit the business in the coming years. A few months ago, Heritage started selling cannabis in Missouri and this comes after it formed a strategic relationship with Como Health (doing business as 3Fifteen Primo Cannabis).
Shortly after Heritage formed a relationship with 3Fifteen, the North American cannabis company started to operate in West Virginia and established a strategic relationship with Harvest Care, a grower, processor, and provider of premium quality medical cannabis products. Through the relationship, Heritage can produce branded products to be offered to medical cannabis patients in West Virginia.
Although we are especially bullish on the US market, Heritage has been steadily capturing market share in Canada and our readers need to be aware of this side of the business. From building brands to forming strategic relationships, the company is becoming a bigger presence in several major provinces.
RAD is the most valuable brand that is owned by Heritage and we are favorable on the amount of consumer demand for the product line. The brand is manufactured in-house and is sold in provinces across Canada. The management team is highly focused on bringing new SKUs to market and we believe the strategy will continue to play an important role with how the business captures market share in Canada.
By working with LPs like Canopy Growth Corp (TSX: WEED) (Nasdaq: CGC) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB), the company has become one of the largest medical cannabis suppliers in Canada and we believe the market is not assigning any value to this accomplishment. We consider this to be an undervalued part of the business and expect this to change as the revenue stream continues to grow.
Over the next year, we expect Heritage to report a series of major developments and for the market to become more favorable on the business. We are of the opinion that Heritage is in the early innings of a major growth cycle and believe it possesses the resources that are needed to capitalize on North America and on strategic international markets.
A few months ago, Heritage secured an equity line of credit agreement from Obsidian Global Partners to purchase up to US$20 million of common shares through a private placement. By having access to additional equity funds, Heritage can accelerate growth by adding new revenue streams, expanding across borders, and executing on a multi-national growth strategy. We believe the business has significant potential growth catalysts and find the valuation to be compelling at current levels.
https://technical420.com/cannabis-article/heritage-cannabis-is-flying-under-the-radar-and-you-need-to-read-this/#
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