THC BIOMED INTL LT (OTCMKTS:THCBF): A Rebound Opportunity

We were optimistic about THC BIOMED INTL LT (OTCMKTS:THCBF) one month ago. The reasons were numerous. But, the most significant was that THCBF was well prepared for the regularization of the cannabis in America. As of today, we believe that the primary drivers of the previous stock run are still intact. Thus, we are not worried about the recent decline in the share price.Let's check the share price action before we assess the news. The share price declined from $2.25 to touch the psychological resistance of $1.0. The value erosion is very significant. Fair enough, but there are several features indicating that the decline may not continue. First of all, the company did not release any information to justify the depreciation. Also, the amount of stockholder selling was minimal, as the volume was low.Check the most recent price action. We will provide more details in this new article: Two months chart for THCBFFor starters, we are now providing a brief background. THC BioMed is a producer of cannabis, headquartered in Kelowna, Canada.The most critical is that THCBF is one of the few marijuana licensed producers in Canada. This fact makes the company a perfect business to profit from the growing demand for cannabis.What's new?Incredible returns are always monitored by regulators. Thus, THCBF had to explain the share price spike of January to the Regulatory Organization of Canada. This is what you need to know:

"The Company announces that it is not aware of any other material undisclosed developments. THC is also unaware of any material undisclosed change related to the Company that would explain the recent movements in the price of its common shares. The Company will keep the market informed as required." Source

What was the reaction of market participants?The market is not afraid of discussions with regulators. Judging the reaction of Alumina Partners (Ontario) Ltd., we believe that the immediate response was putting more money on THC. Alumina provided $500,000 to the company in return for a combination of shares and warrants.Furthermore, money seems to be flowing quickly to the company. On January 26, 2018, the same market participant provided another $1 million. It was not the first time; this company has invested so far as much as $4.7 million to the company.In our opinion, the demand for the stock is high. The share price is showing fantastic returns. Also, market participants are ready to finance the new dispensaries for legal marijuana and the working capital. Nobody wants to miss the growth of the company.FinancialsOn January 8, 2017, the company released a new interim report. We found an increase in cash and inventory. From $22,852 shown in July, the cash increased to $715,925 in October. Additionally, the inventory also jumped from $542,934 to $1,312,241. The total amount of assets reported also increased by 18%.Check it out: Increase in Cash - THC BIOMED INTL LT OTCMKTS:THCBFThere is another remarkable fact. The assets increased without creating stock dilution. The weighted average number of shares outstanding in July was equal to 99,426,329 shares. In the last quarter, this figure has gone to 104,707,519 shares.Also, regarding the liabilities, there is a new long-term debt of $800,000. The accounts payable and the convertible debt also increased. But, the asset/liability ratio is still stable. Have a look: Liabilities - THC BIOMED INTL LT OTCMKTS:THCBFThat's not all.The most interesting was the income statement. The company reported, for the first time, positive revenues of $276,237. It is great news since this number was equal to zero in the same quarter of 2016.Shorts are closing their positionsShort sellers commenced closing their positions in January. We believe that the news is positive. Please note that they acquired a lot of positions in November and December. But, very recently they closed them:DateShort Interest% ChangeAvg. Daily Share VolumeDays to CoverSplit New IssueJan 12, 20187,309-78.912,006,4291.00NoNoDec 29, 201734,652-9.79337,5941.00NoNoDec 15, 201738,41256.77133,1951.00NoNoNov 30, 201724,502106.98162,5081.00NoNoNov 15, 201711,838100.00149,9341.00NoNoOct 13, 20176,404-55.91269,8771.00NoNoSept 29, 201714,5263,208.88126,0511.00NoNoSept 15, 2017439-83.6772,8371.00NoNoConclusionCurrently trading with a market cap of $139 million, THCBF is an exciting story among small caps. With $1.3 million, the next months could be very profitable. If THCBF can sell it all, the next revenues could be high. Hence, we will be monitoring the next quarterly release.To sum up, there is a lot to like on this name.We will be updating our subscribers as soon as we know more. For the latest updates on THCBF, sign up below!Disclosure: We have no position in THCBF and have not been compensated for this article.Image courtesy of Cannabis Culture via Flickr