EMBLEM CORP COM NPV (OTCMKTS:EMMBF) Preparing For Upcoming Recreational Marijuana Market

The legalization of recreational marijuana in Canada is on the horizon. The pending legislation is expected to go in effect in July of next year. As a result, the entire marijuana industry, both in and out of Canada, is gearing up for the anticipated spike in demand in Canada, and for what may follow in terms of other countries following Canada’s lead. To this end, EMBLEM CORP COM NPV (OTCMKTS:EMMBF) is taking major steps to expand its production capacity.Emblem is licensed under the Access to Cannabis for Medical Purposes Regulations as a producer of Medical Cannabis in Canada, and is led by a team of former Healthcare & Pharma Executives who have built & run multi-billion dollar companies. Uniquely positioned within the vastly-growing medical and recreational cannabis industry, the Company’s targeted strategy flows across three distinct verticals of cannabis production, patient education, and pharmaceutical R&D. Emblem carries out its principal activities producing marijuana from its facilities in Paris, Ontario pursuant to the provisions of the ACMPR and the Controlled Drugs and Substances Act (Canada) and its regulations.Emblem was incorporated under the CBCA on October 8, 2014 under the name KindCann Holdings Limited, then changed its name to Emblem Corp on September 1, 2016. Emblem came public via a merger with Saber Capital Corp, a capital pool company. The brand-new Paris, Ontario facility was custom-designed and purpose-built specifically to cultivate and cure cannabis for medicinal use; and has a planned expansion to 21,000KG of annual production.On May 30, 2017, Emblem announce that it agreed to purchase two contiguous parcels of land, aggregating approximately 80 acres of industrially zoned land within very close proximity to the Company’s current production facilities in Paris, Ontario, in preparation for the anticipated demand for cannabis and cannabis derived products stemming from the proposed legalization of adult recreational use in Canada. The aggregate purchase price for the land is C$7.7 million.Emblem’s ultimate goal is to have a total of 300,000 sq. ft. of new operational production space on which a total production capacity should reach about 70,000 kilograms per annum. In the third quarter of 2017, Emblem expects to break ground on the newly acquired land, and build of its initial 100,000 sq. ft. state-of-the-art facility, of which 60,000 sq. ft. will be dedicated to production, and the remaining 40,000 sq. ft. allocated to support services and administrative functions. Two additional 100,000 sq. ft. production capacity expansion modules will follow. A total of up to 20,000 kilograms of dried cannabis is what the Company expects the facility to produce from the initial 100,000 sq. ft. expansion, once it is operating at an optimal level. This will translate to approximately C$160.0 million in potential sales, given the Company’s current average selling price of approximately C$8.00 per gram (or equivalent derivative product), and production capacity assumptions.Emblem employs a “closed box” indoor production method in its facilities. This production methodology requires access to robust natural gas and electricity infrastructure to support the significant energy demands of large scale, superior quality cannabis production. The land acquired by Emblem provides access to low cost, high pressure, high capacity natural gas and high wattage electricity.

EMMBF stock has been on a downward trend since the beginning of 2017 when it made a high of US$3.74. It is currently trading at US$1.4016, and appears to be breaking down through a support level at US$1.6023. The stock has sold off along with the entire cannabis sector. For those with a long-term time horizon, the current opportunity is one for dip buyers.First quarter financials for 2017 report a significant increase in revenue year-over-year from the same period in 2016, but the Company is operating at a net loss. Emblem currently has approximately C$33.0 million of cash on hand and about C$34.0 million of “in-the-money” warrants, a portion of which are callable. Through its existing capital structure, the Company expects to be able to complete the first 100,000 sq. ft. production capacity expansion on its newly acquired land in Paris, Ontario without the need to raise additional capital. Current market capitalization stands at $71.99 million, on 51.36 million shares outstanding as of June 1, 2017. We will be updating our subscribers as soon as we know more. For the latest updates on EMMBF, sign up below!Disclosure: We have no position in EMMBF and have not been compensated for this article.