Next Green Wave Makes Good On Its Promise Of Imminent Revenue With The Launch Of Its First CBD Pet Product
Just two weeks after Next Green Wave Holdings Inc. (CA: NGW – $0.63 & US: NXGWF – $0.48) acquired SD Cannabis, the Company is already making good on its promise for immediate revenue generation as it has announced the launch of its first CBD pet product, Loki Naturals Love Biscuits. These biscuits contain infusions with the full spectrum of CBD and quality oil extracted from U.S. grown hemp. In addition, they have 100% natural and locally sourced raw ingredients and are free of preservatives and fillers.
The branding and social media expertise promised as part of the SD Cannabis acquisition is already bearing fruit as NGW has put its cutest social influencer, Loki the Wolfdog, front and center to the sales launch campaign. This begins with a very personalized ad that should effectively resonate with dog owners.
The pet industry has been an area of focus for a lot of companies as people are spending a greater amount of money on their pets. This industry is high-margin and recession-proof and Loki’s Biscuits will be no exception. While the intent is to get this product into pet food stores soon, it is currently selling online at www.lokinaturals.com for $40. With that type of retail price, investors can imagine that margins are healthy. If the biscuits help to keep customers’ dogs active and healthy as the above ad shows with Loki, then these customers will keep coming back to buy this premium product.
Loki Naturals Love Biscuits Is The First Of 45 Products To Be Launched
Loki Biscuits is the first of 45 products to be launched by NGW as part of the SD Cannabis acquisition, with the expectation that all of these launches will occur over the coming months. This will ensure that there are plenty of near-term news catalysts for investors to chew on, enabling NGW to stand out from a rather packed crowd in the minds of cannabis investors.
This extensive product launch and branding will stimulate premium pricing from cannabis consumers as the plant itself becomes commoditized. With an initial focus on the Californian market, NGW stands a good chance to take a fairly large chunk of it through its diverse and innovative product line that has commenced with a dog biscuit.
In addition to being innovative on the branding and product side, NGW has simultaneously continued its dedication to research and development on the cultivation side. Last week, the Company announced that it has begun the optimization phase of the strategic licensing agreement with Intrexon. The two companies have teamed up to use Intrexon’s Botticelli™ next generation plant propagation platform to enable rapid production of Next Green Wave’s proprietary cannabis cultivars.
The Botticelli™ platform offers potential for a more sustainable, scalable, and more economical solution than conventional cloning approaches with cannabis.
Conclusion: Pullback Is A Buying Opportunity As Revenue Growth Appears On Track
Since we last wrote about NGW and the SD Cannabis deal, the stock price has dropped back to where it was at the start of February. Some of this can be attributed to the cannabis sector pulling back slightly after a strong three months of performance since December 2018. This pullback represents a good buying opportunity because NGW appears to be on track to extracting value from its acquisitions and partnerships.
The structure of the acquisitions are not dilutive if they accelerate revenue and earnings growth beyond the pace of the increase to the share count. The successful launch of the pet product line, that without the acquisition of SD Cannabis would not have been on NGW’s radar in Q1 2019, is an indication that this will be the case.
It won’t take very long for NGW to prove us correct if it continues to launch products and execute on its Californian market cannabis strategy. We expect to see substantial revenue numbers as early as Q2 2019. Smallcaps Recommendation: BUY.
|Smallcaps Recommendation: Buy||Price Target: $1.78||Latest Company Report (pdf)|
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