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Psychedelic stock Core One Labs (CLABD) continues to trend this week but is it a buy? Core One Labs is a biotech company focused on bringing psychedelic medicine to market through novel delivery systems, psychedelic assisted psychotherapy, and API grade psilocybin manufacturing. Read on to see if Core One Labs stock is a good buy.

Is Core One Labs Stock a Good Buy?

Core One Labs Inc. operates as a biotechnology research and technology life sciences company in the United States and Canada. It focuses on bringing psychedelic medicines to market through novel delivery systems, psychedelic assisted psychotherapy, and API grade psilocybin manufacturing.

Related: Cannin’s Top 3 Cannabis Stocks for July

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The company manufactures CannaStrips, which are cannabis-infused strips, as well as produces oils, distillates, and resins. It also offers consulting services for cultivation, extraction, and manufacturing, as well as financing, nursery, and cultivation services; and holds real estate properties and equipment. The company was formerly known as Lifestyle Delivery Systems Inc. and changed its name to Core One Labs Inc. in September 2019.

Core One Labs Fundamentals

Company Profile

HQ: Vancouver, BC, Canada
Founded: 2010

Company Focus: Neutral

Core Labs used to produce cannabis infused strips. They then pivoted into a life sciences company looking to develop psychedelic medicines to treat various indications such as depression and alcoholism.

Core One Labs Company Size: Neutral

Market Cap: US $69.0 million
Enterprise Value: $67.3 million
# of employees: 20

Markets for Core One Labs: Neutral

Primary: USA
Secondary: Canada
Majority Subsidiaries: Akome Biotech; Ketamine Infusion Centers of Texas; Vocan Biotechnologies; Rejuva Alternative Medicine Research Centre; Bluejay Mental Health Group
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Related: Little-known Biotech Stock Up 149%

Company Operations: Neutral

Cultivation: None

Distribution: None. They are currently undertaking drug development. They have IP for sublingual and transmucosal strips and novel formulations for psychedelic indications. They also have access to over 200,000 patients for clinical research.

Vertically integrated: No
Horizontally diversified: Yes

Company Financials:  Weak

Revenue (ttm): $ None
Outstanding shares (diluted): 13.7 million

Core One Labs Management: Neutral

CEO: Joel Shacker
President: Casey Fenwick
Founder: Brad Paul Eckenweiler
CFO: Geoffrey Balderson
CTO: Jan Burian Ph.D.
CMO: Dr. Santiago Ferro

Company Branding: Weak

They have no products and thus no brands. Current drug candidates in their drug pipeline are for depression and alcoholism. There is a long road towards getting a psychedelic compound approved through clinical trials.

Company Valuation: Neutral

Current share price: US $4.51
52 week high/low: $1.88-10.40
Price to Sales: N/A (no sales)
EV/Revenue: 13.82
Price/book: 13.60

Related: Up Over 80% this Week – Is Core One Labs a Buy?

Core One Labs Financing: Weak

They reportedly have $2.62 million in cash. Total liabilities are $3.7 million with total assets of $10.1 million.

Risks of Investing in Core One Labs: High

The risks of investing in any cannabis company are very high given the immaturity of the market and all competitors. This company has additional risks in their choice of psychedelics as drug candidates, lack of revenue, and the fact that developing drugs is a very slow, expensive process.

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Bottom Line: Is Core One Labs Stock a Good Buy?

Core One Labs is a life sciences company in Canada looking to turn psychedelics into medicines. Various indications for them could include alcoholism and depression. They do hold IP on thin strips for oral/sublingual delivery of medical compounds.

They have recently announced that they can now produce psilocybin at scale in a cGMP facility to be used as their API. They claim the costs to do so are $100s per gram instead of the market prices of $10,000 per gram for synthetic psilocybin. This could turn them into a contract manufacturing company which just supplies API to other companies.

RelatedCannin’s Top 5 Psychedelic Stocks for 2021

The larger news for them is the preparations to list on the Nasdaq, which would give them access to huge liquidity. To do this they will consolidate shares in a 8:1 ratio. Developing drugs is a long and expensive process. Listing on the Nasdaq could supply them with all the capital they need to be successful for this.

The problem with them is that they have an accumulated deficit of $130 million and for Q1 2021 a loss of over $24 million. They need capital fast and if the Nasdaq listing doesn’t happen, they will be in an extremely difficult position. For these reasons, we see them having way too much risk moving forward. They may yield short term gains for the rest of 2021 (thanks CanninBot!) but longer term, we give them a Weak rating.

Is Core One Labs Stock a Good Buy?

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