- Company to announce another 1 or 2 deals this month
- Favorable Market Trends in Taxes
- Land Grab Strategy Taking Shape
- At a 67% Discount to Early March high of $ .105
- Favorable Share Structure with 37 million in Float
Bahamas Development Corp. (BDCI) merged with Cannabis Consortium earlier this year. The idea of the reverse merger was announced late last year, where 100 million restricted common shares of BDCI were issued to Trans Global Group, Inc. (TGGI) for the rights to Cannabis Consortium. This concluded transaction now makes TGGI BDCI’s largest shareholder. The significance is that this is an affiliate control position subject to stringent Rule 144 leak out provisions. This means there is little if any overhanging stock being shed by BDCI. The company has been relatively quiet since its announcement last year, but recent news seems to indicate its coming into a super news cycle. The company has been working strategically to capture a piece of the pie within the hot Cali Cannabis space via partnerships and deals.
Earlier this week BDCI and its partners executed a lease for a 5,000-square foot space just outside Los Angeles, CA. The building is one of only two locations zoned for “On Site Consumption” of cannabis and is sited across a local landmark with heavy foot traffic and ample parking facilities. The plan is to buildout a VIP area inside the space to attract high-end clientele.
The City is only issuing 8 retail licenses, so its key for Cannabis Consortiums strategy was to align itself with an experienced partner with a successful track record. BDCI anticipates the licensing phase shall take up to 120 days from the date of submission.
In March, the company partnered with a group that will own a percentage of a Pre-ICO marijuana dispensary. The dispensary currently operates in an under 1,000 square foot, and is relocating to an 8,000 square foot, facility. The new dispensary has current licenses for Retail, Manufacturing, and Cultivation.
The reason this latest deal is vital to BDCI’s strategy is because the Manufacturing license that comes with the new dispensary was required in order to let them to produce oil, edibles and concentrates. This Manufacturing license will allow Cannabis Consortium to produce and sell its own branded patented products throughout the state of California.
Scarcity of Licenses Leads to Land Grab
The state of CA is only issuing 160 retail licenses in the next 18 months. In this city outside of Los Angeles, BDCI will own 1 retail shop out of 8 and 1 of only 2 consumable licenses in the city. There is a real scarcity of retail licenses which is where the money is made. The way the rules are delineated in CA it’s really turned into a land grab situation and opening first is the key to success and then the first to develop revenue. It’s reasonable to expect they will have the buildout done in about 60 days because time is money.
Pressure on the Tax Rates
There is a push to drop the Marijuana tax rate which could lead to a dramatic increase in consumption. California has one of the highest tax rates in the country currently pegged at 35%. Just recently a city lowered the tax rate to 20% to compete with the black market weed to avoid a loss of revenue. This trend is likely to continue and will be very beneficial to BDCI.
In late February, they partnered with a Cannabis Distillate to supply all of its Oil needs in California and any other state the company has operations in. When Cannabis Consortium rolls out its specialty products, the key factor will be a steady supply of premium oils to be used in its products. The partner chosen by Cannabis Oils has the expertise to assist Cannabis Consortium in creating the right mixture for its various products. The Cannabis Distillate offers a diverse variety of Oils, that combined with Cannabis Consortiums patented delivery method, will provide for desired effects. Once details of the delivery mechanism are released, investors will be able to evaluate how novel the delivery is and how much additional revenue it can create.
News in the Pipeline
It was hinted in the April 2nd press release that shareholders can expect to see another deal or 2 in the coming weeks. It is pleasant to see a steady flow of news, and if the stock price can even get back to it’s early March highs, investors would be excited. On March 5th, 2018 the stock price peaked at $0.105 on over 18 million shares traded that day. Even with the positive news and the anticipation of more, investors are aware it has seen a dime less than 30 days ago and may just get there again.
The company also mentions in the future they may utilize their website and social media to inform shareholders and investors while following all SEC guidelines. More and more companies are utilizing such platforms as Facebook and Twitter to keep everyone “in the loop” and is very cost effective versus making official press releases via newswires.
Pursuit of 5 Revenue Streams
Investments into other private cannabis operations
Research/New Products will focus on the medical benefits of CBD oils for the treatment of animals.
Favorable Share Structure
The company has a current market cap of $6.5 million. It has 182,687,610 shares outstanding as of March 13, 2018. TGGI, with 100 million shares has the controlling interest in BDCI. These shares are restricted and unable to be sold and when they do become freely tradeable will fall under the rules of an affiliate. According to Madison Stock Transfer 33 million shares are restricted and 12 million are held in certificate form which means the float is no more than 37 million shares. On March 5th, 2018 over half the float traded that day as the stock surged higher. The favorable share structure is definitely a positive for the company.
Shares of BDCI are trading currently just above long term support of $0.03. In early March the price hit a high of $.105 before retreating over the coming month. There hasn’t been much activity but the press release this week marks the third major development in as many months and hinted at another deal or 2 later this month. This stock appears to be waking up and poised for a super news cycle. It’s in a hot sector and has been executing on its strategy. If it continues to execute on its acquisition targets and provided details of its plans that give insights to its earnings and revenue model it might be able to break out of its trading range into new highs. Given these factors we have a conservative one to 3 month price target of $.10.
Disclosure/Disclaimer: PSInvestor.com has not been compensated for the above mentioned article, it does hold a long position in the company purchase in the open market. To read our full disclaimer, please click here.