Amazon made headlines on Friday as it joined the digital phenomenon of buy-now pay-later sales which have swept online marketing. Its partner – Affirm – has seen an incredible increase in share price in response as the mega-corporation begins introducing the feature to its clients. Increasing 41% on Monday morning, Affirm will likely lead the BNPL (Buy Now Pay Later) market thanks to this partnership. As a service already trending among young consumers, the BNPL market is poised for growth as Afterpay and Klarna – well-known competitors of Affirm – face added competition from companies like Apple and Square which plan to enter the space.
Amazon’s entrance into BNPL sales is predicted to have ripple effects among its competitors as the company’s size and market share are impossible to overlook. BNPL’s wide-range of applications even includes the cannabis market with Spence Labs unveiling its ‘Enjoy Now, Pay Later’ financing option for cannabis purchases. This application allows users to pay for cannabis products through digital installments. The company’s Co-Founder, Chris Retner, said the service “is revolutionary in cannabis, where credit cards are not available for use” before referencing companies like Affirm, Klarna and PayPal which “have all launched similar products to great success over the last few years”.
While Amazon has yet to corner the BNPL marijuana market, its decision in June to no longer disqualify employees for marijuana use will have similarly far reaching consequences for the labor force and cannabis market.
Cannabis & the Workplace
An overarching trend in positive perceptions towards cannabis have begun affecting the workplace, but Amazon – employer of 950,000 Americans – has likely accelerated the process. Setting the tone for workplace standards ahead of Federal legislation, Amazon’s relaxation of drug policies will likely lead other employers to follow suit. This is good news for the cannabis industry which could see additional consumers as a result. According to a recent study, introducing a law that prevented employers from using policies that would allow the firing of employees for using marijuana led to a 9% increase in the overall percentage of marijuana users.
While Federal workers will still be restricted from using the scheduled substance, employers’ de-stigmatization of marijuana use could introduce a previously untapped market to the cannabis industry. Even the Veterans Affairs Administration is softening its approach to the substance as it considers allowing medical professionals to recommend the therapeutic use of marijuana to our veterans.
CLSH Stock Catalysts
Well-established cannabis producers and retailers will benefit the most from this shift, making CLS Holdings (OTC: CLSH) – a vertically integrated cannabis producer and retailer – a company primed for expansion. Cannabis companies like CLSH have the know-how and comprehensive infrastructure to adapt to changes in the industry which platforms like Spence are bringing while also capturing new consumer pools brought on by changing workplace standards.
Having captured Nevada’s lucrative, tourism-infused marijuana market with products available in more than 33 dispensaries throughout the state, CLSH is now setting its horizons on New Mexico. The company has moved quickly to form a licensing agreement with Herbal Edibles, facilitating the introduction of CLSH’s products into New Mexico’s newly legalized cannabis market.
At the moment, CLSH earns 80% of its revenue from its Las Vegas dispensary – Oasis Cannabis. But this could quickly change as its cultivation, production, and distribution company – City Trees – develops according to the vision of CLSH’s management team. CLS Holdings began with a $8 million cash investment from its founding members but has been sustained through the leadership of CEO Jeffrey Binder. Binder has experience developing start ups and mid-stage companies thanks to his private holding company, JeMJ Financial Services, Inc. Additionally, he held various positions with Power 3 Network, Inc., which develops websites and back offices for home-based businesses. Altogether, the company’s management team has significant experience in raising capital and integrating acquisitions in addition to business management expertise.
According to OTCShortReport’s findings, CLSH stock is due for a short squeeze. This has put CLSH stock on some investor’s watch lists but the company is still mostly undiscovered. For this reason, we are happy to bring OTC investors’ attention to a promising stock that likely won’t stay secret for long.
Trading at $.1599, CLSH stock is currently testing its previously held resistance with its next clear resistance at .1700. The stock’s support has generally held at .1431 with a secondary support level at .1400. Over the last three days the stock has increased roughly 12% and could see a gap-up depending on its short squeeze potential. At the moment, accumulation has stayed at a low to mid-level along with an ambivalent RSI at 52.28. The MACD has recently had a crossover on the upside and has generally been uptrending. This bullish sign hints at continued, positive momentum for the stock.
Should you Buy?
CLSH stock has strong fundamentals with healthy monthly revenue. In Q1 the company saw $4.5 million in earnings with $3.7 million contributing to its net loss. In July alone the company brought in $1.9 million in revenue. Given this positive trend, the company’s August earnings report carries expectations for further increases. The stock is likely to see more volatility and an increase with its monthly earnings report – offering an opportunity for bullish investors. But in the long-term the company is likely to continue making gains which investors will see with the company’s multi-state expansion.
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