Back in November 2019, we highlighted for investors the importance of two cannabis retailers that investors should keep their eye on, and these two have once again showed continued support on the chart and maybe ready for another great pop as Ontario starts to roll out more cannabis stores in the coming months!
We First wrote about Fire & Flower Holdings (TSX: FAF) on November 27th when FAF traded at $0.91 cents a share. The stock subsequently found a base at $0.80 cents. Approximately two weeks after our first article on Fire and Flower, shares quickly rose 15% and hit $1.05 on December 13th. Our second article titled “2 Cannabis Retailers Ready to Rise on Expansion in Ontario” was later published on January 08th 2020, at a share price of $0.85 cents and shares closed up 14% to $.97 cents the same day. Shares of Fire & Flower continued to build a bullish base and their ascent two weeks to the day from the second article peaking on January 22nd to $1.22 per share for a total increase of 43.5%.
Since our previous articles, FAF has pulled back significantly due to pressures in the cannabis sector however some developments have come out as of late and maybe worth noting. On February 11th, Fire & Flower announced that they have forced the conversion of its 8% unsecured convertible debentures which matures on July 31st 2020. FAF expects to issue a total of 12,173,912 common shares to repay the remaining principal of debentures and accrued and unpaid interest. Fire & Flower recently took action to increase its trading activity as they announced on February 4th that the company began trading its shares in the US on the OTC Market under the symbol (OTCQX: FFLWF). This is very strategic for Fire & Flower as the company increases the distribution and availability of its common shares to investors in the United States prior to the expansion of retail cannabis stores in Ontario.
On November 27th,2019, we wrote about the opportunity Meta Growth could provide to investors and is a stock they should keep their eyes on as a potential mover in the cannabis space in relation to our bullishness on the expansion of retail cannabis outlets in Ontario. We published the article on META at $0.19 per share and on December 23rd, 2019, shares of META soared to $0.41 per share for a total return of 115% within 4 weeks!
Since the rally to $0.41, shares have since pulled back substantially to $0.17 as the company announced that META would no longer be selling its clinic division and later a $10 Million bought deal with Desjardins. The units of the bought deal consist of $0.22 cents common shares and warrants at $0.29 cents. However, since the pullback, investors who may have missed the great rally to $0.41 cents, investors may have a second chance to make a profit.
The bought deal financing was completed as the company needs additional capital to fund its expansion of retail outlets in the province of Ontario. META opened its first retail outlet in a busy spot located at 378 Yonge Street in downtown Toronto. Yonge street is a very popular and very busy street and this location should prove to generate a lot of revenues due to the high foot traffic. Additionally, according to a recent press release, META mentioned that it has begun construction on locations in Toronto and Kitchener as they anticipate submitting store authorization applications on March 2, 2020.
At $0.17, we believe META provides a good risk to reward ratio and a good entry for the possible upcoming rally that cannabis retailers may see as the province of Ontario expands retail outlets in the coming months.
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