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Resolve Digital's Financing - What it Means for CannaRoyalty Shareholders

March 28, 2017

 

Earlier today, CannaRoyalty Corp. (CSE:CRZ)(OTC:CNNRF)(FRA:CY4) announced that its investee, Resolve Digital Health has completed a CAD$5 million Series A financing round

 

The financing round was led by Aphria, Inc. (TSX:APH)(OTC:APHQF)(FRA:10E) and brokered by Cannaccord Genuity, an investment bank that has participated in a number of transactions involving cannabis companies. 

 

Based on the financing price, Resolve Digital Health's implied valuation is more than 25.6 million CAD. 

 

About Resolve Digital Health:

 

Resolve Digital Health is developing revolutionary connected health technology for cannabis consumption.

 

Their initial product - the Breeze Inhaler eliminates much of the guess work currently associated with the use of medicinal cannabis. 

 

The Breeze Inhaler system uses smart pods with pre-measured, pharmaceutical grade cannabis in either dry or extract form. The pods are formulated based on symptoms - eliminating the guessing game of strains and the like. 

 

The Breeze Inhaler connects with a mobile app allowing patients and their health care providers to track symptoms, consumption, efficacy and more. It also connects patients to others in their Breeze Nation community where they can share tips, stories and treatment progress. 

 

With the capital infusion from this financing round, Resolve Digital Health plans to launch the Breeze Inhaler in California soon. 

 

Investment Analysis:

 

In the fourth quarter of 2015, CannaRoyalty acquired a 35% equity stake in Resolve for 850,000 CAD. After the completion of this Series A round, CannaRoyalty will own 27.2% of the existing Resolve shares on a non-diluted basis. 

 

Based on the deal price, this financing values CannaRoyalty's current stake in Resolve at 7.1 million CAD.  

 

Although CannaRoyalty has made numerous investments in Resolve Digital Health since their initial investment back in 2015, the implied return on their initial investment gives shareholders and others a concept of returns that CannaRoyalty can generate from their portfolio holdings.  

 

Marc Lustig, CannaRoyalty's CEO affirmed this in his earlier statement regarding the deal,  "is an example of the success of our business model that includes identifying high-value cannabis assets, partnering through investment and assisting in the growth and commercialization of brands, products and devices - while increasing value for our shareholders."

 

It is important to acknowledge that as with any business venture there are risks involved and past performance is not necessarily indicative of future results. That said, CannaRoyalty does quite a few things to reduce risk and increase potential returns for shareholders. 

 

Their investments span 24 different companies across the cannabis space, engaged in everything from medical research to consumer brands making them highly diversified. CannaRoyalty's management team is experienced and qualified, and the company structures its investments in ways intended to maximize shareholder value. 

 

Market Reaction: 

 

In mid-day trading shares of CannaRoyalty Corp. are positive on the day. On the CSE, CRZ is up over 1.7% while their OTC markets listing in the U.S. is gaining over 2%

 

Stay tuned for more on CannaRoyalty's group of portfolio companies that are reinventing the cannabis industry. In the meantime, be sure to subscribe to our newsletter so you never miss an important update. 

 

Disclaimer

 

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.


Investing in nanocap, microcap, and small cap stocks is highly speculative. The publishers of DailyMarijuanaObserver.com are not registered as Investment Advisors or Broker-Dealers in any jurisdiction whatsoever. The information contained on DailyMarijuanaObserver.com (“this site”) has been prepared solely for informational purposes. Nothing on the site is an offer or solicitation to buy or sell securities. Investors should seek financial advice regarding the appropriateness of investing in any securities mentioned from their financial advisor

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Disclaimer: Except for the historical information and data presented herein, matters discussed in articles on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future performance or achievements expressed or implied by such coverage. Smoke Show Ventures, Inc., which owns The Daily Marijuana Observer, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Smoke Show Ventures, Inc., which owns The Daily Marijuana Observer, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. Before making specific investment decisions, readers should seek their own professional advice and that of their own professional financial adviser. Smoke Show Ventures, Inc. or its affiliates, which owns The Daily Marijuana Observer, may be compensated for its services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.dailymarijuanaobserver.com/legal-disclaimer/.