Cannabis based products and extracts are a burgeoning vertical within the legal cannabis industry and we expect this segment to continue to experience above average growth for years to come.
One of the reasons we should see continued growth within the cannabis products and extracts industry is the growing trend toward smokeless products. Cannabis based products have been found to possess tremendous health benefits and this has also made such products very attractive to consumers, especially the elderly.
In late July, we started to watch CNRP Mining Inc. (CND.CN) after it signed a letter of intent to acquire X-Sprays, which develops and sells a life-enhancement product administered through an optimal oral spray delivery system.
X-Sprays is targeting indications with a massive addressable market and has focused its efforts on creating a natural product line of oral sprays to deliver medicines, nutrients and vitamins.
The company’s proprietary product line is comprised of eight health care and life enhancement nutraceutical products that include both hemp CBD and nutraceutical ingredients (4 with CBD and 4 nutraceutical).
A Low-Cost Expansion and Growth Opportunity
While marijuana cultivation and retail operations continue to attract the most investor interest, companies focused on the cannabis based products and extracts have flown under the radar.
The market’s focus on Canadian licensed marijuana producers have sent valuations significantly higher and we believe this has made companies like CNRP an even more attractive opportunity. X-Sprays is poised to benefit from a very significant trend within the cannabis industry, smokeless products.
One of the attractive aspects of X-Sprays’ fundamental story relates to the minimal capital and resources needed to enter new markets. X-Sprays is implementing a multi-faceted distribution strategy and will use traditional retail outlets, its e-commerce outlet, and non-traditional retail outlets such as spas, bars, and hotels.
Shares Climb After the Signing of a Definitive Agreement
In late October, CNRP Mining traded higher after the company signed a definitive agreement to acquire X-Sprays. This acquisition is significant as it will provide the company with an exclusive world-wide license to an existing line of CBD infused nutraceutical products that are already being sold.
CNRP has been executing on all cylinders and earlier this month, the company closed on a $3 million non-brokered private placement offering.
X-Sprays plans to use this capital to execute on the company’s multi-faceted distribution strategy. On top of a highly efficient e-commerce platform, X-Sprays will use traditional and non-traditional retail outlets.
A Stock that Investors Need to Watch
X-Sprays is led by a management team has more than 20 years of relevant experience and has demonstrated an ability to create value for its shareholders. The company is levered to a multi-billion-dollar market and offers a product that is effective and differentiated from the competition.
We are favorable on the recent developments and believe that signing of a definitive agreement as well as the closing of the financing have CNRP well positioned to execute on its operating plan.
Although the shares have rallied well off its recent lows, we think this rally still has room to run. We will continue to monitor how this team continues to execute and deliver value to its shareholders. CRPGF is a company that we will continue to monitor and believe this is stock that needs to be watched!
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Source: Technical 420