Weed, Inc. BUDZ (OTC Pink)
Should you invest in Weed, Inc. BUDZ (OTC Pink)? Recommendation: See Below
WEED, Inc. spends its energy on the development of cannabis-derived molecules for the treatment of human diseases. They also focus on the purchase of land and commercial cultivation centers to consult, assist, manage and lease to dispensary owners and organic grow operators.
Fundamentals
Profile:
HQ: Tucson, AZ
Incorporated: 1999 as United Mines (2015 change)
Facilities: La Veta, Colorado
Symbol: BUDZ (OTC)
Focus: Neutral
WEED, Inc. is an early stage, holding company attempting to develop cannabis-derived (CBD) compounds to treat specific human diseases. They are in the early stages of both R&D and cultivation. Their wholly-owned subsidiary, Sangre AgroTech (bought in Mar 2018)—a plant genomic research and breeding company with expertise in genomic sequencing, genetics-based breeding, plant tissue culture, and plant biochemistry—is on a 5-year, $15 million plan to complete a genetic blueprint of the Cannabis plant genus, by creating a global genomic classification of the entire plant. Its team plans to develop and patent scientifically-valid cannabis strains for disease-specific medicines. It will conduct this study only in states where cannabis has been legalized for medical purposes.
WEED Inc. trades on the over the counter pink sheets market, which has very limited financial reporting requirements.
Size: Weak
Market Cap: $35 million
Enterprise Value: $36 million
Markets: Neutral
Primary: Primary: US states where cannabis medicine is legal (currently 30 states). They plan to develop CBD-based treatments for diseases such as PTSD, epilepsy, chronic pain, Crohn’s disease and pediatric brain cancer.
Operations: Weak
Cultivation:
Weed Inc does not report that it grows any cannabis or hemp to date.
Distribution:
Weed Inc does not yet have any products to distribute.
Should you invest in Weed, Inc. BUDZ (OTC Pink)? Recommendation: See Below
Integration/Diversification: Weak
Vertically integrated: No
Horizontally diversified: No
Financials: Weak
Previous Year Income after Taxes: ($29.3 mil)
Outstanding shares (diluted): 107.5 mil
EPS: ($0.28)
Management: Weak
CEO: Glenn E. Martin
Martin serves as President, CEO, and CFO of WEED, Inc., and is Chairman of the Board of Directors. Prior to forming Weed Inc, he served as an executive with several companies. From 1988-1992, he was Executive Director of World Trade Center, Tucson, AZ.
President and Chief Science Officer (of Sangre): Dr. Patrick Williams.
Williams has expertise in plant genetics and molecular biology. He has served on the National Scientific Review Board for the Human Genome Project, provided technical leadership as branch chief of the Armed Forces DNA Technology Development Program at Walter Reed Army Medical Center, and on numerous NIH Study Sections on technology development. He believes a comprehensive understanding of the genome of a variety of cannabis strains will provide the blueprints for developing medical products to treat many diseases.
Secretary, Treasurer, Director: Nicole Breen (Glenn Martin’s daughter).
As Secretary, Ms. Breen maintains corporate records and minutes of meetings. As Treasurer, she is in charge of corporate funds. For 12 years, she served as the Managing Associate of GEM Management Group, a subsidiary of WEED, Inc., specializing in acquiring mineral rights and mining properties.
Branding: Weak
The company does not yet have any products.
Valuation: Neutral
Current share price: US $0.31
Price to Sales: NA (No revenue yet)
52 week low/high: US $0.29 to $1.87
EV/Revenue: NA
Price to Book: 19.38
Should you invest in Weed, Inc. BUDZ (OTC Pink)? Recommendation: See Below
Financing: Weak
The build-out of the research facility in La Veta, CO—scheduled for completion by the end of Q1 2019—was budgeted to cost $3.13 M.
In March 2018 the company offered to purchase 43 acres in Westfield, New York for $800,000 to begin the hemp and infused beverage business. The deal was expected to close May 1, 2018.
Risks: High
The risks of investing in any cannabis or hemp company are currently high given the newness of the market. The risks of investing in this company are very high due to the limited news the company puts out and the long-term nature of its corporate mission.
Should you invest in Weed, Inc. BUDZ (OTC Pink)? Recommendation: See Below
Recommendation: Weak
Weed Inc’s goal is to develop cannabis-derived drugs to treat specific diseases, which could include epilepsy, chronic pain, Crohn’s disease, PTSD and pediatric brain cancer, among others.
Unfortunately, management puts out very little information on the company upon which to know exactly what they are doing, and what their progress is. Based on their last press releases they have two main efforts underway: R&D in Colorado, and hemp cultivation in New York.
In an older press release, dated March 2018, they announced that they had bought 4 acres in La Veta, CO on which to build their research facility, through their subsidiary, Sangre Agrotech. It reported that Sangre is on a 5-year, $15 million research plan to map the genome of several varieties of cannabis and to develop patented cannabis-derived drugs for specific diseases.
Weed Inc claims that Sangre has certain advantages, which, along with its talented personnel, will allow it “to accomplish its goals in months, rather than years.”
These advantages include The use of next-generation sequencing instruments that are currently restricted to a few key “decision-maker” laboratories and the use of the most advanced bioinformatics data systems. It will use these to develop “genomic and phenotypic data to identify regions of the genome related to growth, synthesis of desired molecules, and drought and pest resistance.” They will eventually use this to breed new cultivars with desired traits. This will enable them to produce new seed stocks, clones, and intellectual property of great value to the company and investors.
This sounds like an exciting goal, but one that could take a long time (years not months)) and a lot of money, since research is expensive. One thing is for sure, they have no revenues and are burning through cash likes it’s water.
Weed Inc’s goals sound potentially promising. However, as mentioned, management has failed to issue updates on company progress or any news in the past year.
This has spooked investors, and the company shares have lost >95% of their value over the last two years, dropping from $5.55 on May 1, 2018, to $0.30 now.
This lack of public transparency is flagrantly bad management for all sorts of reasons, including but not limited to the fact that we believe the company needs money to continue their progress. With no products and no revenue yet, they have spent (lost) $30 million over the past 20 months.
This kind of random volatility is what investors can expect from this kind of small company stock with a limited volume of stock trading.
From a fundamental analysis POV, we do not recommend investors get involved until there is a lot more transparency about what is going on. We do not feel comfortable about the management.
For those of you who also like to use technical analysis, we recommend you consult Cannin’s technical analysis of this stock (see below). It is possible that after a year of falling stock value, investors feel the stock has hit bottom and could, in the short term, hold out hope for a profitable bounce.
Should you invest in Weed, Inc. BUDZ (OTC Pink)? Recommendation: See Below
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