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Acology Inc (OTCMKTS:ACOL): Here's What We Want To See Next

Acology Inc (OTCMKTS:ACOL): Here's What We Want To See Next
Written by
Chris Sandburg
Published on
January 30, 2017
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Acology Inc (OTCMKTS:ACOL) is one of 2017's strongest runners so far, having gained close to 450% year to date. The company currently trades around $0.017 a share, for a market capitalization of a little over $80 million. With this in mind, and taking the latest run into consideration, is there any value in an exposure at these prices, in anticipation of some further upside momentum as 2017 matures?Let's take a look.For those not familiar with the company, it bills itself as a packaging company, engaged in designing, manufacturing, branding and selling plastic medical grade containers. A quick look at the website, and the various retail channels through which the company distributes its products, refines this vague description somewhat. Basically, the company started out as the producer of pill bottles that, as well as holding the pills, are able to grind contents into a powder. The initial target was the geriatric market, or in other words, those unable to swallow whole pills. Shortly after commercial launch, however, the company had an unexpected alignment with the medical marijuana industry, and has since refocused its attention towards nurturing this alignment and attracting marijuana industry revenues.Of course, with the November legalization ballots, Acology's alignment with the space resulted in some considerable upside momentum. Back in November, Acology traded in the low double zeros, in and around the $.002 mark. It is now around 8500% up on these levels, and – unlike many other companies with a link to the cannabis space – has managed to maintain its value appreciation against the backdrop of reduced sector buzz.So what is driving the recent gains? Two major updates have – in our eyes – driven the recent run. The first hit press on January 3, and announced that the company has partnered with a company called Boveda. The partnership will produce and commercialize cannabis packaging that incorporates the latter's humidity control technology, allowing for a dryer and fresher product when consumed. Reportedly, Boveda is the only company in the world that can solve intermediate moisture needs and maintain the ideal humidity content of the items inside containers, whether they be plastic or glass. It's also FDA compliant. This is a big deal for Acology, and should help the company to ramp up sales in North America and beyond throughout 2017.The second major announcement, which hit press on January 23, detailed the fact that the company is expanding its Canadian operations in anticipation of the national referendum to legalize recreational cannabis. According to the release, recent high-level meetings with industry insiders have convinced Acology executives that the timing for increasing an already strong presence in the Canadian medical cannabis industry is in its and its investor's best interest. The company already has offices in Vancouver, and has maintained these offices for this exact reason – to press go on an expansion strategy as and when it feels the time is right.Apparently, that time is now.So what is next? Well, while these updates are enough to serve up a little bit of value, we want to see some quantitative follow-through as reinforcing the potential of both bits of news.Specifically, we want to see some early stage sales of the humidity product that has come around on the back of the partnership with Boveda, as well as some fresh numbers on Canadian distribution, to help us lock in a bullish bias.Cash on this one isn't great, reported at just shy of $4,000 as of September 30, 2016, and when weighed against around $1.7 million worth of debt, it looks a little concerning. With that said, revenues for the third quarter of 2016 hit $478,000, for a net income of $3,000, and this makes the situation a little rosier.We will be updating our subscribers as soon as we know more. For the latest updates on ACOL, sign up below!Disclosure: We have no position in ACOL and have not been compensated for this article.

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