Umbral Energy Corp (CSE: UMB) for all intents and purposes, is the medical cannabis company that missed its chance to shine. As its name suggests, it was previously a resource sector based organization, which has made its way in to the cannabis sector like so many before it. To do so, it has successfully acquired 75% of PhyeinMed Inc, an applicant under the ACMPR regulations.
Although Umbral Energy has owned 50% of PhyeinMed through a purchased subsidiary since 2014, it just recently acquired a larger percentage. This additional 25% was purchased from Estek Ventures Corp, for a price of $120,000 in cash plus a boatload of shares and options to certain parties. Following this Umbral Energy commenced the process for a change of business, resulting in the equity being halted on November 2, 2017. For this, they get the award for the worst timing ever. Lets take a look at where the company is at as of late.
The Latest on Umbral Energy Corp
Umbral Energy is to be renamed as Heritage Cannabis Holdings Corp
On the day in which Umbral Energy was halted for their change in business, they offered up some new information to investors. The company would be renamed to Heritage Cannabis Holdings Corp, to reflect their new line of business within the medical cannabis market. Although they currently hold some resource properties within Canada, the company has indicated that there’s a likely probability that these assets would be sold off rather than developed.
In addition to this name change, we recently received word on what the new ticker would be. Due to the name change, the company has reserved the ticker “CANN” on the Canadian Securities Exchange. This move has been approved by the governing body.
PhyeinMed has accelerated its expansion plans
The facility for PhyeinMed is located within the small town of Falklands, British Columbia, a town consisting of roughly six hundred people. It consists of thirteen acres, from which it will build upon its facility through a series of successive expansions. Initially, the facility was slated to be roughly 10,500 square feet including all back office space. This was the size that was originally submitted to Health Canada for licensing approval.
Due to recent changes, they’ve managed to increase this figure to 15,500 sq ft, which is expected to produce approximately 3700 kg of dried cannabis per annum. This will be conducted through the use of hydroponic and aeroponic grow systems, which enables the company to maximize its grow space. In total, the grow space will consist of 10,500 square feet.
In addition to establishing this facility, Umbral Energy has elected to accelerate the construction process. To do so, it is now simultaneously constructing the planned second phase of the facility as well. This consists of a second building, approximately 14,000 square feet in size across two floors of space. The company claims that somehow these two figures equate to a total of 37,000 square feet of growing space, but those numbers aren’t adding up for us. With this added grow space it is anticipated that roughly 4,550 kg of product will be produced annually. The facilities are expected to be completed by the end of this month.
In total, Umbral Energy plans to expand the facility to a size of 420,000 square feet. This will be spread across two buildings, each of which are believed to contain two storeys. This will reportedly give them an annual production capacity of 110,000 kg of dried cannabis per year, resulting in over $500 million in revenues on an annual basis. To us, this seems to be a gross over estimation of the facilities production capabilities. Time will tell if we are incorrect in this assessment or not.
Umbral Energy should be unhalted shortly
Currently, there are rumours abound that the stock will finally be unhalted this week. We have heard dates from Tuesday through Friday for this, so it’s difficult to measure the merit behind this information. However, the data filed by the company as of late supports this theory to a certain degree.
As of right now, it is believed that the only document remaining to be filed pertains to that of the approved name change from Umbral Energy to Heritage Cannabis Holdings Corp. It has already acquired shareholder consent, the listing agreement, the certificate of compliance, and the necessary paperwork from their transfer agent. As such, it is likely that this equity could finally have its chance to shine as cannabis companies continuously soar to new heights with no basis in reality.
We aren’t a huge fan of Umbral Energy Corp to be blatantly honest. The current facility is rather undersized relative to the market, and doesn’t offer much that isn’t already on the market. Had this facility received its license a year ago, it would be a slightly different story. For what its worth, PhyeinMed has already signed an agreement with Canopy Growth Corp. Although it was a little premature, they have already signed up to sell their product on Canopy’s Tweed Main Street online store. This will ensure their product has an immediate distribution method once operations come online.
Lastly, upon the stock becoming available to trade again expect some significant gains to be locked in. The last reports were that investors were asking for at least $0.50 per share while they eagerly await for the halt to be lifted. This is a massive increase from the companies last closing price of $0.15. Mixed in with a little bit of market hype, and current holders of the company or those who participated in the most recent private raise will be quite well off. Best of luck when this one becomes unhalted, and don’t be surprised if traders swarm.
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Information for this analysis was found via The CSE, SEDAR, PhyeinMed Inc, and Umbral Energy Corp. 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.