With legislative restrictions on cannabis loosening, the industry is entering a boom and is expected to grow rapidly in the near future – offering a potentially valuable investment opportunity. Leading Nevada’s cannabis industry, CLS Holdings (OTCQB:CLSH) is a vertically integrated cannabis producer and retailer offering high quality cannabis targeted towards a growing market.
In February, CLSH saw a sudden upsurge when it increased 150% over only ten days after reporting excellent results for Q2. But the company has even more room to grow considering that the cannabis industry is one of the few industries to be positively impacted by the pandemic. Witnessing a 46% increase in sales and becoming a $17.5 billion industry in 2020, the cannabis sector appears to hold long-term opportunities for investors.
CLS Holdings currently offers a variety of cannabis products through its two subsidiaries. Oasis Cannabis, a dispensary operating in downtown Las Vegas, has become recognized as one of the top dispensaries in the state. But CLSH has made a name for itself through its wholesale brand, City Tree, which distributes and produces a variety of cannabis products for Nevada’s dispensaries. In fact, City Tree holds a remarkable position as the state’s best-selling tincture brand since 2020. Its success can be attributed to CLS Holdings’ patented extraction and conversion method which ensures high-quality freshness and effectiveness. This acclaimed methodology has distinguished CLSH from its many competitors and given it a competitive advantage to continue capitalizing on well into the future.
CLSH performed well in the last quarter, reporting revenue of $1.9 million for July alone which is an increase of 104.1% compared to July 2019. With a gross margin of 50.4% and a 40.9% year-over-year increase in monthly revenue, the company is progressing on all fronts with considerable momentum. Already, the company has completed a $4 million conversion and extraction facility which has the capacity to produce $20 million in revenue. The company is also planning to expand its production facility and rollout, which will likely catalyze its stock value thanks to prospective ROIs.
Seeking to be much more than just a dispensary and producer, CLS Holdings – also known as Cannabis Life Sciences Holdings – has a comprehensive business model designed to capitalize on every area of this burgeoning industry. With a growing list of services, CLS currently includes licensing operations, processing operations, processing facilities, sales, brand creation, and consulting services.
The company’s recent success is setting the tone for its future endeavours which will likely build on CLSH’s patented method of extraction, Nevada’s vibrant tourist industry, and expansion into other states. As more states consider legislation to legalize cannabis, a well established and comprehensive cannabis company like CLSH has the potential to anticipate and capture the growing market demand.
Trading at only $.1448, the stock has largely maintained its value over the last year. While the company’s strong fundamentals are supported by its healthy revenue growth, CLSH has recently retained Renmark Financial Communications Inc. to develop the company’s image. Now, CLSH’s branded division has announced a limited endorsement of UFC welterweight fighter, Sasha Palatniko. Shareholders will likely see continued efforts by CLSH to enhance its image as it prepares for further expansion.
With a market cap of $18,557,290, the stock is currently seeing a volume near 75 thousand. This shows a general slowing from its average volume of roughly 110 thousand. There are 250 million AS of which 128 million are outstanding.
After spiking to $.2 on August 12th, the stock’s value has dipped however the Delta variant may increase the likelihood of state-wide restrictions and more people staying at home. This coupled with the upcoming harvest season – which usually entails an increase in sales – and focus on company promotion could result in the stock’s appreciation. At this momentum, it seems likely CLSH could return to its February peak of $0.35.
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