Opinions
Brian Madden
Organigram Holdings
OGI-X
DON'T BUY
Jan 17, 2018
Stock price when the opinion was issued
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Chart shows some pretty big swings. What is positive currently is that there is nice little upward trend, but is probably going to be in jeopardy based on the gravity affect. If it got below $2.70, he would say there is probably something wrong with the story. When you have a new industry like this, you will often get some rationalization, and in this new cycle, he expects it will happen much sooner. It’s really hard to tell which are the winners.
Contender, go by the wayside, or be acquired? Be careful, takeout premium is built in. If no takeout, there could be a blow up in the stock. Stuck in no man’s land, no R&D on pharmaceutical side, no export agreements. Tough for them to compete in exports and pharmaceuticals when the market price of wholesale marijuana reaches a plateau in a year or two.
(Market Call Minute.) Until proven otherwise, marijuana producers are producing an agricultural commodity and will earn low returns on investment capital. It's a business model that’s unproven, and he would steer clear.