The acquisition of Carson City Agency Solutions, dba Cannabella could strengthen MJardin Group Inc (OTCMKTS: MJARF) market sentiments. The acquisition comes at a time when the stock is struggling for direction after a rollercoaster 2019 that has seen it succumb to short selling pressure.
MJardin Price Analysis
MJardin is increasingly trying to reinvigorate investor sentiments that appear to have hit all-time lows in response to recent wild swings. In addition to the Cannabella acquisition, the company has confirmed it is on course to reach full production capacity at its facility in Atlantic Canada.
The announcement that the company’s cultivation facility in Ontario is exceeding historical yield levels also looks set to revitalize investor interest in the stock. The company has also moved to ramp its sales and retail footprint through strategic partnerships.
Amidst the flurry of positive developments, the stock has continued to edge lower in line with the bearish trend that began late last year. A plunge below the $2 a share level raises serious concerns about MJardin long term prospects.
However, with the stock resorting to trading sideways in recent sessions, a bounce back could be in the offing on investors reacting to a string of positive developments that signal long-term growth. A bounce back above the $2 a share level should arouse suggestions that the stock has clocked a bottom a due for a correction higher.
For MJardin to turn bullish after the underperformance of recent months, it will have to rise and stabilize above the $4 a share resistance level. Below the $4 technical level, the stock remains susceptible to further drops given the underlying bearish trend.
What Does MJardin Do?
MJardin operates as a specialized cannabis management company offering turnkey cannabis cultivation, processing, and retail solutions. The company also manages 36 cultivation processing and retail facilities.
After the underperformance of recent months, focus shifts to recent developments that could as well shed light on MJardin long-term prospects. Top on the list is the acquisition of Cannabella, an operator of cannabis extraction facility as well as producer of edibles and topicals in Nevada.
The acquisition should strengthen MJardin extraction capabilities in Nevada. In addition, it should allow the company to strengthen its edibles and topical product line while leveraging a portion of its cultivation output.
Cannabella joins MJardin with a diverse product line, currently available in 50 of the 60 retail locations In Nevada.
“This transaction is a positive step for us in the U.S. market. The addition of extraction capabilities improves Martin’s market position and allows us to take advantage of diversifying our product portfolio by adding products such as oils and vapes to capture more of the value chain,” noted Adrian Montgomery, Chairman of MJardin.
The acquisition comes on the heels of MJardin confirming that its joint venture AtlantiCann medical Inc. Located in Nova Scotia has achieved full cannabis production capacity, four months after securing cultivation and processing license.
Growing Production Capacity
Phase 1 of AtlantiCann Medical can now produce 4,700kg of flower and trim. Phase 2 once complete will take the Facility’s production capacity to about 8,550kg of flower and trim on the addition of another 20,000 square feet capacity.
MJardin and its partners are currently working on securing approvals for Good Manufacturing Practices that will allow the facility to engage product export to international markets.
In addition, MJardin has confirmed that its WILL facility in Brampton Ontario registered high cannabis cultivation yields exceeding historical levels. The facility produced an average of 61 grams of flower and an additional 26 grams of extractable trim for a total of 87 grams per square foot of bench space per harvest.
“What we do best is consistently produce premium cannabis with high yields. We look forward to continued growth with impressive results at WILL and across all our facilities as more production comes online,” noted Chairman of the Board and Interim CEO, Adrian Montgomery.
Down 40% since the turn of the year, MJardin is one of the marijuana companies that has seen its share price dwindle even on the broader sector turning bullish. While the underperformance is a point of concern, it does not provide an accurate reflection of underlying developments as well as long-term growth prospects.
MJardin has made significant progress in strengthening its cannabis extraction capabilities. The acquisition of Cannabella underscores how focused the company is about pursuing growth. Improving production capacity at AtlantiCann Medical and WILL facility are positives that underscore long-term prospects.
While the stock is still trending lower, a bounce back followed by a close above the $2 level should reaffirm MJardin bounce back credentials.
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Disclosure: We have no position in MJARF and have not been compensated for this article.
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