Isodiol International: A Briefing on the Latest Major Developments

We’ve previously covered Isodiol International Inc (CSE: ISOL) twice as a result of the current market sentiment. Since our last article, the stock has only continued its downward slide despite positive developments that have been made by the company. This was much to the disappointment of current shareholders, whom couldn’t place a finger on the justification for continued bearish sentiment.

However, it appears that that sentiment has changed after the trading action that was seen yesterday. As the technical pattern that had formed was coming to a critical point, it did what few expected and broke bullish, sending the price of the stock sharply north with only a handful of minutes left in the trading session. Due to this sudden bullish action, lets spend some time catching up with the latest on Isodiol since we last covered them.

 

Isodiol International: A Briefing on the Latest Major Developments

Isodiol’s supply agreement with Namaste Technologies

Recently, it was announced that a binding letter of intent had been signed with Namaste Technologies Inc (CSE: N). Namaste, a company that we have also frequently covered, is currently in the process of establishing vendors for its online sales platform.  As of yet, they had largely focused on acquiring suppliers of medical cannabis for their platform. However, it appears that they have now branched out much to the benefit of Isodiol International.

The basis of the agreement between Namaste Technologies and Isodiol.
The basis of the agreement between Namaste Technologies and Isodiol.

With the advent of this binding agreement, it opens up a new sales avenue to Isodiol International. Through this online e-commerce platform it will enable the company to reach a wider audience, both nationally and internationally. With the growing presence that Isodiol has on a global scale, the company only stands to benefit from such further exposure.

Although the deal did not specifically outline which of its product lines Isodiol will make available to Namaste, it does state that it is focused on pharmaceutical-grade products. Based on the current offerings that Namaste has selected to secure for its online platform, it can be assumed that a limited lineup will be made available by Isodiol. This is due to the fact that only the highest grade medical product lines will likely be made available, and not the many lines currently available for casual use such as Pot-O-Coffee.

Namaste Technologies does not currently have a license to sell cannabis products through its CannMart subsidiary. As such, we are currently unable to determine when this sales channel will open up for Isodiol International.

 

The letter of intent with Nuuvera

A day before Isodiol announced its supply agreement with Namaste Technologies, it released to the market news of a separate supply agreement. This time, the agreement was with that of Nuuvera Holdings Ltd (TSXV: NUU), a company currently involved in research and development on the cannabis plant. The focus of the letter of intent is for the importation of 99% pure cannabidiol from Isodiol’s United Kingdom based facility.

Isodiol's letter of intent with Nuuvera Holdings
Isodiol’s letter of intent with Nuuvera Holdings

It appears that with this deal, it is Nuuvera’s intention to utilize the cannabidiol that is imported for research and development initially. Upon the success of the formulation of products, the company will then import up to 30,000 KG of cannabidiol from Isodiol’s European facility on a monthly basis. These pharmacy grade products will then be sold by Nuuvera in local and international markets. Essentially, it appears that Isodiol is simply providing the raw ingredients for a product.

What may be the most beneficial aspect of this deal for Isodiol is recent developments in the sector. Yesterday, it was announced that Nuuvera is to be bought out by Aphria Inc, one of the largest players in the Canadian cannabis market. The purpose of the acquisition as stated by Aphria, is for the leveraging of Nuuvera’s international assets. Isodiol stands to benefit from the increased customer base provided through Aphria, as well as any potential growth seen on a global scale by the company as Aphria focuses on leveraging these markets.

The deal is set to progress to a definitive agreement after an initial importation of product has occurred. This batch of product will then be analyzed and tested by Nuuvera before a final agreement is ultimately agreed to.

 

Isodiol’s technical breakout

The last item we wanted to address in our briefing, is the technical breakout that was experienced yesterday by Isodiol. After more than two months of consolidating through a descending triangle, the equity broke the trend and went north at an explosive rate. The magnitude of this move can be best demonstrated through the hourly chart.

The hourly chart on ISOL as of January 29, 2018.
The hourly chart on ISOL as of January 29, 2018.

As can be seen above, after consolidating in a slow ascending triangle on the hourly time frame the equity broke the trend on the last candle of the day. The force of this move was further magnified by an intense amount of volume flowing in to the stock after a relatively quiet period of slow consolidation.

On the daily chart however, the inverse pattern had formed. Isodiol had been in a downtrend since December 4, with which it formed a descending triangle as it went through a period of price discovery. Meanwhile, the relative strength index was able to return to normal levels, along with the range of the bollinger bands.

The daily chahrt of Isodiol as of January 29, 2018.
The daily chahrt of Isodiol as of January 29, 2018.

Based on the technicals seen above, the first point of resistance will likely occur at $1.49 currently as the stock runs in to the upper bollinger band. Following this, expect some resistance at price levels of $1.55 and $1.65.

Should the equity lose its bullish momentum in the next couple days, we’ll be watching the area of $1.18 for support, followed by the $1.07 area. Anything much further below and things will likely turn ugly quick.

 

Closing Remarks

After the price movement we saw yesterday, things might finally be looking up for Isodiol investors. It’s been a long two months for long term shareholders as they watched the value of their holdings slip away while so many others in the sector ran the opposite direction.  It’s clear that the company has been working hard to change the sentiment from bearish to bullish as they continue to ink agreements and progress forward.

Keep in mind that these were, in our mind, the most significant recent developments for Isodiol. In addition to these two agreements, there has been progress made on other fronts as well for the company. For instance, they have secured a manufacturer for their Pot-O-Coffee brand in California, in addition to signing a deal to acquire CBD assets of yet another company. There’s also the news that was issued yesterday, hinting that they are aiming to get the National Football League on board with the use of medical CBD, which would benefit the company greatly. In all, its further sign that this company hasn’t stopped working to improve value for its shareholders.

Invest in companies that are constantly improving. Dive Deep.

 


Information for this analysis was found via The CSE, Bloomberg, The Financial Post, and Isodiol International. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.

As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.