Flower One Holdings Inc. (CNSX:FONE) has not had the best of the receptions ever since it went public. The stock price tumbling from highs of $1.55 level to lows of $1.10 came as a surprise. However, the stock has since bounced back, and as it stands, the upward momentum appears to be gaining momentum at the backdrop of improving fundamentals.
Flower One Holdings Price Analysis
For starters, the company is in the process of acquiring a Nevada cannabis cultivator for $27.2 million. The raising of CA$57 million ahead of CSE listing is another development that attests to the company’s cash balance, ideal for pursuing opportunities in the cannabis sector.While the underlying fundamentals look positive, the stock remains engulfed in a steep downtrend. After a recent plunge lower, the stock appears to have found strong support at the $1.1 level. A break of the support level could leave the stock susceptible to further declines on a continuation of the bear trend.After bouncing back from recent lows, the stock looks set to continue climbing high on stabilizing above the $1.30 level. Above the $1.30 level, the stock should make a run for the $1.50 mark, seen as the immediate resistance level
About Flower One Holdings
Flower One Cannabis is a publicly traded company that is plotting to become the leading cannabis cultivator and producer in Nevada. The company is engaged in the cultivation of cannabis at scale. It also engages in the business of packaging cannabis products for distribution.
What We Know About Flower One Holdings
Flower One Holdings is an emerging cannabis play. The company boasts of a 455,000 square foot facility made up of 400,000 square foot greenhouse space. The remaining 55,000 square foot space acts as a production shop for the processing p of dry flower, cannabis oils, and other infused products.Once the entire greenhouse becomes fully operational next year, the company should be in a position to produce 62,500 kg worth of cannabis annually, making it one of the leading cultivator and processor in the region.
NLV Organics Acquisition
In a bid to further strengthen its prospects in the sector, Flower One Holdings has entered into an agreement with NLV Organics Inc. for the acquisition of some property in Las Vegas Nevada. The acquisition of NLVO’s property will expand the company’s footprint in one of the biggest and fastest cannabis markets in the world.For instance, the company would gain access to a 25,000 square foot facility for cultivation and production of cannabis products. The facility is licensed to grow and process cannabis for both medical and recreational use. The acquisition is also set to expand Flower One Holdings license portfolio to nine licenses from four.
“This transaction is more than an acquisition, it is a true partnership that strengthens Flower One’s business model and our ability to execute market entry in Nevada tightly. The collaboration and knowledge transfer between our organizations has been exceptional and, for Flower One, has validated how accretive this acquisition will be for our company and our shareholders,” said CEO, Ken Villazor.
CA$57.4 Million Capital Raise
Flower One Holdings is also fresh from completing private placement offering of common shares. The Company generated gross proceeds amounting to CA$57.4 million from the offering. The company intends to deploy net proceeds from the offering for the acquisition of a 12-acre site with a nine-acre greenhouse. The acquisition will go a long way in strengthening the company’s cannabis cultivation capacity.The emerging cannabis company also intends to use part of the net proceeds to accelerate the conversion and construction of its 400,000 square foot greenhouse.
“With our commercial scale, automation and technology, Flower One is positioned very well to be the preferred partner for major cannabis consumer brands looking to strategically enter what we believe is the most lucrative cannabis market in the United States,” said Mr. Villazor.
Bottom Line
There is no doubt that Flower One Holdings is still in the early days as a public company in the cannabis space. However, over a short period, the company has shown it has what it takes to battle the big boys when it comes to opportunities in the cannabis business.The company’s 400,000 square foot cannabis cultivation facility, as well as a 55 square foot processing facility, attests to its ability to pursue market share in the fast-growing business going forward. The stock looks like an exciting pick at current levels as the company continues to expand its footprint in the industry.We will be updating our subscribers as soon as we know more. For the latest updates on CNSX:FONE, sign up below!Disclosure: We have no position in CNSX:FONE and have not been compensated for this article.
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