5 Reasons Why C21 Investments Is Ready To Take On The Big Cannabis MSOs
C21 Investments Inc. (OTCQX:CXXIF), an American cannabis company and multi-state operator (MSO) with a presence in Nevada and Oregon, has seen its shares soar over 100% in the past few months. With an eye on the potential for federal cannabis reform under the Biden administration, investors are watching for the next big U.S. cannabis player to emerge and C21 fits the bill.
What Happened: C21, a leading vertical integrated company, has recently made big progress in its business operations and has strengthened its management.
Here are five reasons why C21 is in an excellent position to take on the big-league MSOs:
1. The Advisor Shares Pure US Cannabis ETF (NYSE:MSOS) continues to purchase shares of C21. To date, it has accumulated 6.5 million shares in the company, making up 1.24% of its portfolio weight. This ETF now owns over 5.5% of all C21’s outstanding shares.
2. C21 is currently very undervalued compared to its peers. C21’s main competitor in Nevada, Planet 13 Holdings Inc. (OTCQX:PLNHF), holds about 10% of the state's market share and has a market cap of about $1.55 billion. Comparatively, C21 has a market cap of only $158 million and owns about 5% of market share in the state.
3. C21 runs tight operations and has the largest cash flow margin of all the major public cannabis operators at 30% equaling $10.9 million free cash flow for the trailing 12 months.
4. C21 was able to bring three big investment managers onboard to provide an equity commitment for the company: Jason Wild’s JW Asset Management, Wasatch Global Investors and Todd Harrison’s CB1 Capital Management will provide an equity commitment for the repayment of the company’s outstanding convertible debentures at maturity.
5. C21 has made moves to significantly strengthen its leadership team. C21 announced on Jan. 29 it had brought on Todd Harrison to join the company’s board of directors. Harrison brings a wealth of knowledge and experience to C21's management team because of his 30-year career, including his time as vice president of global equity derivatives at Morgan Stanley (NYSE:MS). On Aug. 18, 2020, the company announced it had named Bruce McDonald as non-executive chairman of the board. McDonald spent 28 years with RBC Capital Markets, making him highly experienced in the capital markets sector. McDonald is helping to lead C21's future growth strategy as it expands its business and operations.
What's Next: “I believe C21’s relentless focus on building a leading, profitable U.S. cannabis company is powerful, and represents a unique opportunity within the industry,” said McDonald in the release.
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