SPLIF (OTC)

Should you invest in Nutritional High International? Recommendation: See Below

Nutritional High International, Inc. engages in the developing, acquiring and designing of marijuana-infused products. Its products include FLI Edibles, FLI Concentrates, and Cannabis oil. The company was founded on July 19, 2004 and is headquartered in Toronto, Canada.

Should you invest in Nutritional High International? Let’s take a deeper look.

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Fundamentals
Profile:
HQ: Toronto, Canada
Founded: 2004
Facilities: California, Colorado, Oregon, Canada
Symbol: SPLIF (OTC)

See Our Technical Analysis of SPLIF

Focus: Neutral
Nutritional High is a vertically integrated company focused on the sales and manufacturing of cannabis oil, tinctures, and edibles for adult use as well as medical purposes. Nutritional High is also developing additional cannabis-infused products in the near future like beverages, gummies, and topicals. Nutritional High’s corporate strategy is based on the acquisition and restructuring of businesses to develop high-quality products.

Size: Weak
Market Cap: $11.79 million
Enterprise Value: $21.04 million

Markets: Neutral
Primary: Colorado, California, Oregon
Secondary: USA, Canada
Subsidiaries: Calyx Brands, Pasa Verde, Green Therapeutics

Operations: Neutral
Cultivation:
Current production: 11,000 square feet facility in Colorado with 4 licenses
Future production: 12,600 square feet under development in Sacramento, CO, 5,600 square feet facility in Washington under strategic review

Distribution:
Direct sales: NA
Store networks: Nutritional High uses Calyx brand’s (subsidiary of Nutritional High) distribution services for their products to ship to more than 600+ licensed retailers. Calyx provides core fulfillment services, optimal fulfillment services, and enhanced services.
Supply Agreements: Signed a distribution partnership agreement with Green Therapeutics in the US

Integration/Diversification:
Vertically integrated: Yes
Horizontally diversified: No

Financials:  Weak
Outstanding shares (diluted): 364.5 mil
Revenue last year: CAD 23.61 mil
EPS: (0.09)

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Management: Strong
CEO: Adam K. Szweras
CTO: BIlly Morrison
Adam K. Szweras, CEO of Nutritional High, has over 20 years of corporate law and strategic management experience including managing big cannabis brands like Aurora Cannabis. Billy Morrison, Chief Technology Officer of Nutritional High, has experience running marijuana companies and dispensaries as well.

Branding: Neutral
Nutritional High offers dab jars, syringes, and oil vape cartridges under their “FLЇ” brand as well as sells many other cannabis products through their distributor. Nutritional High is working on offering Cannabis-infused products, beverages, gummies, topical and tablets in the near future.

Valuation: Weak
Current share price: US $0.0277
Price to Sales: 0.70 (Tobacco industry Avg. = 5)
52 Week Low/High: $0.0181 to $0.227
EV / Revenue: 1.13
Price to Book: 0.87

Financings: Neutral
Nutritional High raised $1,807,000 by issuing 1807 secured convertible debenture units.

Risks: High
The risks of investing in any cannabis company are currently high given the volatility of the market. The risks of investing in this company are very high given the competitiveness of the cannabis markets in the states they compete in. Should you invest in Nutritional High International?

Recommendation: Weak
Nutritional High is a vertically integrated company focused on the sales and manufacturing of cannabis oils, tinctures, and edibles for adult use as well as medical treatment purposes. Nutritional High is also researching additional cannabis-infused products in the near future like beverages, gummies, and topicals. Should you invest in Nutritional High International? We think it’s best to wait for now.

Nutritional High offers dab jars, syringes, and oil vape cartridges under their “FLЇ” brand as well as sells many other cannabis products through their distributor. Nutritional High is working on offering Cannabis-infused products, beverages, gummies, topical and tablets in the near future.

Nutritional High’s capacity to grow is not very good as they had cash and cash equivalents of just $1.09 million in the third quarter of 2019 as compared to $5.07 million in the same period in 2018 which is not enough to meet their working capital needs for another year. Nutritional High is facing a significant liquidity crunch which is impacting its share price making them take more debt to run operations in the short term.

Nutritional High faces significant supply risk in 2019 as 85% of their products are produced by a single supplier. Nutritional High raised $1,807,000 by issuing 1807 secured convertible debenture in August 2019.

Nutritional High’s return on total asset (ROA) was -63.17 % which implies that it made a loss of $63.17 on every $100 spent on asset. This is very low as compared to the industry average however it will improve as their new facilities become operational.

For these reasons, we think Nutritional High, at or near its current price of $0.03 a share, can be a risky investment opportunity.