With Canada set to become only the second country in the world to legalize marijuana this summer, so-called “pot stocks” are back on fire, as companies rush to secure positions in the emerging market. High-value growth stocks continue to ride the tailwinds of regulatory reform in Canada and the U.S., broadly sending stocks higher as investors are spurred by FOMO, an acronym for “fear of missing out.”
DOJA Cannabis (CSE:DOJA) (OTCPK:DJACF) is positioning to capture share in a market that the Canadian government projects will include 4.6 million individuals aged 15 and over consuming cannabis at least once this year. To that point, Miles Light of the Marijuana Policy Group expects more than 900,000 kilograms of cannabis demand in the Canadian market this year.
Through its wholly-owned subsidiary, DOJA is a licensed producer of cannabis under Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR). The company has requested its Pre-Sales License Inspection, the final step to receiving a license to sell cannabis which it will produce at its state-of-the-art licensed facility in B.C.’s Okanagan Valley.
Don’t get used to the name DOJA, though, as the company made a transformational acquisition this month, inking a definitive agreement to acquire all of the issued and outstanding securities of TS Brandco Holdings Inc. Upon completion of the merger, expected by the end of the month, DOJA intends to change its name to Hiku Brands Company Ltd. and ticker to HIKU, moves that will better reflect its brand house.
Better known as Tokyo Smoke, TS Brandco is an award-winning cannabis lifestyle brand whose accolades include recently being named "Brand of the Year" at the Canadian Cannabis Awards.
Tokyo Smoke is a dispensary; it’s all about a sophisticated retail experience. The company has six locations in Canada where it sells coffee, cannabis accessories and design products, with plans to expand across the entire country. Tokyo Smoke has established itself as a preeminent brand in Canada, acquiring designer cannabis brand peer Van der Pop and partnering with cannabis juggernaut Aphria (TSX:APH) (OTCQB:APHQF) and WeedMD (TSX-Venture:WMD) to further cement its name in the business.
Backstopped in part by a $10 million investment by Aphria, Hiku will be in a solid financial position with $31 million in cash. Management says it doesn’t intend to be complacent; it plans to continuing investing to expand production capacity and retail footprint both organically and inorganically through strategic and synergistic acquisitions.
The effective execution of the business plan has investors rallying around DOJA. Shares were slowly edging upward from November through December, breaking above $1.00 to about $1.50 as news of the acquisition plans first surfaced. Investors pounced on shares at that time, which happened to dovetail with an industry-wide rally as traders started hypothesizing about the reality of legal weed nationwide in Canada, sending shares to an all-time high at $4.82. With the merger just completed, traders will look for the next news on further expansion for this promising, integrated firm.
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