Analysts' Ideas of the Week - www.researchfrc.com October 12, 2021 - Baystreet.ca
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Analysts' Ideas of the Week This Copper Junior is Getting No Value for Its Advanced Stage Flagship Asset October 12, 2021 www.researchfrc.com
Page 2 Reddit Discussed Stocks Our pick last week, Farmmi Inc. (NASDAQ: FAMI), went from US$0.36 on Monday, to a high of US$0.42 on Friday (up 16.7%). The Electric Vehicle sector remains the most actively discussed among retail investors, followed by cryptos, cannabis, and betting. This week, we are observing strong retail sentiment around SoFi Technologies Inc. (NASDAQ: SOFI). Key parameters used may include – a) total number of mentions, b) percentage change in the number of mentions, c) stock sentiment, and d) market capitalization. Oct 12, 2021 Company Ticker Sector SoFi Technologies Inc. SOFI Credit Services Source: FRC Historic Weekly Returns (Mar 1, 2021 – Present) 27 out of 32 picks have generated positive returns Average return = 22.97% *Returns were calculated based on the assumption that picks were sold at their peak the same week. *Past performance is not indicative of future performance. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 3 FRC Top Picks The following table shows last week’s top five performers among our Top Picks, including one technology company, two EV-metals juniors, and two precious metals juniors. The top performer, Hello Pal International Inc. (CSE: HP), was up 26.3%. HP reported encouraging performance data last week (discussed later in this report). Our prior reports can be viewed here. Top Five Performers Last Week Source: FRC Companies in our Top Picks list were up 41.6% on average since we initiated coverage vs 0.8% for the benchmark (TSXV). ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 4 Performance by Sector Source: FRC Our complete list of top picks (updated weekly) can be viewed here. Weekly Mining Commentary Global equity markets were up 0.9% last week, after retreating 2.5% in the prior week. Source: FRC / Various The IMF has lowered its 2021 global GDP growth forecast from 6.0% to 5.9% (amid supply chain issues and weaker consumption in Q3), while maintaining its 2022 ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 5 forecast at 4.9%. They also lowered their U.S. GDP growth forecast from 7.0% to 6.0%. September jobs data in the U.S. (announced last week) were below market expectations. Manufacturing activities also declined MoM in September. We believe this weakness will prompt the Fed to delay rate hikes, even though rising inflation is becoming a major concern for both investors and consumers (see chart below). The unexpected surge in oil prices has exacerbated these concerns. The IMF has warned global central banks to be prepared to combat inflation. We believe the Fed is likely to start tapering later this year, and start raising rates in H1- 2022. As we expect inflation to remain high through the end of this year, we are maintaining our positive outlook on gold prices. That said, demand for gold will be partially offset by the recent run up in crypto prices. Sources indicate that institutions are starting to move some of their gold holdings to cryptos. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 6 Similar to equity markets, base metals gained strength after reporting losses in the prior week. Inventory levels were up on the LME, but down on the SHFE (Shanghai) last week. Source: FRC / Various ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 7 Valuations of gold producers were up 9% WoW; base metals producers were up 5%. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 8 ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 9 Last week, three (previously one) out of the 15 hardest hit nations experienced higher daily new COVID-19 cases. Only one country (unchanged) experienced a WoW increase in deaths. Globally, 47.59% have received at least one dose, up 1.9 ppt WoW vs 1.2 ppt the same time last week. 77.14% of Canadians have received at least one dose (up 0.07 ppt vs 0.7 ppt). 72.06% of Canadians are fully vaccinated (0.8 ppt vs 0.9 ppt) vs 66.25% in the U.K. (0.3 ppt / unchanged), and 55.67% in the U.S. (0.5 ppt vs 0.6 ppt). Source: Our World in Data / FRC ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 10 We are maintaining our price forecasts. In the following section, we review companies that announced key developments in the past week. Mining / Exploration Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Panoro Minerals TSXV: PML $0.15 $0.77 Ltd. PR Title FRC Opinion Announces the sale of Antilla copper Positive – The final sale price will be 13% project for cash and royalty of the NPV8% of an upcoming PFS/FS on Antilla. PML will retain a 10% interest. Based on the various scenarios outlined in the press release, we believe the final sale price will be $74M, which is very close to our valuation. In our initiating report in October 2020, we had valued a 90% interest in Antilla at $81M. As proceeds from this sale can be used to advance PML’s flagship Cotabambas project, we believe this deal allows PML to advance Cotabambas with minimal share dilution. PML’s MCAP is $40M. As we are expecting $74M from the sale of Antilla, we believe the market is assigning zero value to Cotabambas and any of its other assets. We will be publishing an update shortly. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 11 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Golden Minerals NYSE: AUMN US$0.46 US $1.03 Corp. PR Title FRC Opinion Reports quarterly gold production Positive – Q3 production was up 38% QoQ increase of 38% in Q3 to 4.8 Koz, and 16% higher than our estimate. Production growth came from higher throughput and grades. As stated in our last update, we are expecting record Q3 financials. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Aurcana Silver TSXV: AUN $0.66 $1.14 Corporation PR Title FRC Opinion Update on mill commissioning and mine Positive – Pleased to see that mill ore sampling construction is complete, and that shipment of concentrates will commence imminently. Management’s guidance is 1.3–1.6 Moz in production this year, with US$10-US$12/oz in OPEX. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Tartisan Nickel CSE: TN $0.41 $0.57 Corp. PR Title FRC Opinion Intersects 25.6 metres of 1.03% Ni, Positive - A 10,000 metre diamond drilling 0.41% Cu, including 2.7 metres of 2.76% program is ongoing to test mineralization at Ni, 0.88% Cu at the Kenbridge Nickel- depth and along strike. The first three holes copper-Cobalt Project, NW Ontario. returned high-grades over long intercepts. Kenbridge is 80 km north of New Gold’s (TSX: NGD) Rainy River gold mine. We believe the project has room for resource expansion, especially higher-grade mineralization at depth. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 12 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Tudor Gold TSXV: TUD $2.37 $5.29 Corp. PR Title FRC Opinion Announces $7 million brokered private Positive – TUD is pursuing an aggressive placement of common shares and flow- resource expansion drill program. Targeting through shares an updated resource estimate in early 2022. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Cora Gold AIM: CORA £0.13 £0.18 Limited PR Title FRC Opinion 73m @ 2.24 g/t Au at Zone B, and 34m Positive – Multiple long intercepts of high- @ 3.06 g/t Au at Zone A, Sanankoro Gold grade gold values. An updated JORC project compliant resource estimate and DFS are expected in the coming months. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Azure Minerals ASX: AZS A$0.32 A$0.45 Limited PR Title FRC Opinion More drill hits Positive – Results continue to indicate potential for a relatively high-grade nickel deposit. We were particularly pleased with: 7.6m @ 2.38% Ni (within 33.6m @ 1.3%), and 7.1m @ 2.22%. Management expects to complete a resource next year. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 13 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Grid Metals TSXV: GRDM $0.11 $0.54 Corp. PR Title FRC Opinion Options newly discovered lithium Positive – The property, located pegmatite property in NW Ontario approximately 250 km northwest of Thunder Bay, has returned high-grade lithium values from preliminary exploration. The property has never been explored for lithium, and is in very early stages. Initial geological mapping and sampling will provide insights on its potential. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: K9 Gold Corp. TSXV: KNC $0.24 $0.65 PR Title FRC Opinion Provides update on Stony Lake (NL) drill Positive – Drilling has intersected a broad program; Discovers new mineralized zone of low-grade gold mineralization. zone at Jumper's Pond Results of three holes have been announced; one reported 1.03 g/t Au over 7.9 m. Too early for us to assign a preliminary speculative resource estimate. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Kootenay Silver TSXV: KTN $0.21 $0.60 Inc. PR Title FRC Opinion Reports best Columba intercept to date Positive - 2,035 gpt silver over 6 m, within 805 gpt silver over 17 m, and 333 gpt silver over 44 m, and 9,840 gpt silver over 0.92 m are bonanza grades. To put things in perspective, silver grades of over 100 gpt are considered high. KTN is preparing for phase 4 drilling. We are not in a position to assign a preliminary resource estimate yet. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 14 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Quaterra TSXV: QTA $0.085 $0.42 Resources Inc. PR Title FRC Opinion Positive assay results at MacArthur Positive – Recently completed a 10- copper project, Nevada and potential for hole/1,569 m drill program. Results of the resource expansion first three holes were encouraging, including 31.1 m @ 0.58% Cu, including 22.6 m @ 0.70% Cu, and 23.5 m @ 0.44% Cu. These values are significantly higher than the existing resource’s average grade of 0.21%. An updated resource is expected to be completed before the end of 2021, followed by a PFS in late 2022. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Renforth CSE: RFR $0.07 $0.12 Resources Inc. PR Title FRC Opinion Drills 21.85m of 3.06 g/t gold at the Positive – These high-grade values came Parbec open pit gold deposit in Malartic, from a previously undrilled area. We expect Quebec management to move to an updated resource estimate. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Steppe Gold TSX: STGO $1.33 $4.50 Limited PR Title FRC Opinion Inventory build up continues and near- Positive – Pleased to see that there is term catalysts currently over 40 Koz of gold in inventory. The pandemic has impacted STGO’s production this year, amid supply-chain disruptions, shortage of chemicals/reagents, and border restrictions. Results of a definitive feasibility study are expected later this month; we will publish an update shortly after the results. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 15 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Equity Metals TSXV: EQTY $0.15 $0.29 Corporation PR Title FRC Opinion Reports bonanza-grade intercepts from Positive – Continues to return bonanza- offset drilling on the Camp vein silver grade gold values. One hole intersected 1.4 target, Silver Queen project, B.C. m grading 1,097 gpt Au, 0.2% Cu, and 0.5% Pb and 2.2% Zn. Typical gold grades of miners are 0.5-2.0 gpt gold. EQTY is completing a maiden resource estimate on the Camp target. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Colibri TSXV: CBI $0.10 $0.29 Resources Corporation PR Title FRC Opinion Receives drilling permit for 56 holes at Positive – This is a fully funded drill the Evelyn project in Sonora, Mexico program, and we believe the company might be able to complete a maiden resource estimate upon completion. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 16 Financials, Technology, Energy, and Special Situations Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: BIGG Digital CSE: BIGG $1.28 $3.25 Assets Inc. PR Title FRC Opinion Netcoins becomes the first publicly Positive – This is a major milestone for owned crypto trading platform in Canada BIGG as we believe investors are likely to to be registered to trade crypto contracts prefer a registered exchange/platform for trading. We are expecting a significant increase in customers/trading volume in Q4. In a recent study, we found that trading volume is directly correlated to Bitcoin prices (R-squared of 0.6). As crypto prices rebounded in August/September, we believe BIGG’s revenue increased significantly in the second half of Q3. Although the recent milestone calls for an upward revision in revenue, we will revise our forecasts after seeing the company’s Q3 financials. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Oculus TSXV: OVT $0.54 $1.23 VisionTech Inc. PR Title FRC Opinion Announces New Forget-Me-Yes® (FMY) Positive – This is a major breakthrough, as Shopify Connector it allows Oculus to tap into Shopify’s (NYSE: SHOP) 1M+ customer-base. Oculus is also partnering with AWS/NASDAQ: AMZN, and Salesforce/NYSE: CRM to market its solutions. Management expects to begin generating meaningful revenue by year-end. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 17 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Lexaria NASDAQ: US$6.58 US$10.51 Bioscience Corp. LEXX PR Title FRC Opinion Oral nicotine study delivers outstanding Positive – DehydraTECH™-enabled oral results nicotine pouch was absorbed in just 2-4 minutes vs 45 minutes for generic pouches. LEXX’s technology has potential to deliver nicotine into the bloodstream 10-20x faster than generic products. LEXX is preparing for a human clinical study. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Hello Pal CSE: HP $0.58 $1.81 International Ltd. PR Title FRC Opinion Announces $2.7M in monthly revenue for Positive – Revenue fell 11% MoM, but was September 2021 inline with the last six-month average revenue. We were pleased to see that non- China revenue increased 30% MoM, as it shows that the company is diversifying its customer-base/revenue-stream. Cannabis Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Pure Extracts CSE: PULL $0.25 $0.90 Technologies Corp. PR Titles FRC Opinion Commencing build-out of extraction Positive – Management is planning to grow facility in Michigan revenue to $20M/year by the end of 2022. Our 2023 revenue forecast (which is more conservative) is $15M, increasing to $22M by 2024. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 18 Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Ayurcann CSE: AYUR $0.20 $0.71 Holdings Corp. PR Title FRC Opinion Rolls out medical cannabis strategy and Positive – AYUR has partnered with reveals its first partnership ReLeave Therapeutics, a company that works with medical cannabis patients, on a patient-referral agreement. We believe such partnerships will allow AYUR to quickly get exposure to a large user-base. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Chalice Brands CSE: CHAL $0.80 $2.04 PR Title FRC Opinion Pre-announces third quarter 2021 results Positive – Pleased to see record revenue in with record revenue of $8.0M Q3, and inline with our expectations. Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: THC BioMed Intl CSE: THC $0.09 $0.26 Ltd. PR Title FRC Opinion B.C. cannabis store features THC kiss Positive – Excellent exposure for THC’s biscuits for 2021 Thanksgiving weekend products; We note that THC’s products were featured on the front page of the B.C. cannabis store website for the entirety of the long weekend. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 19 Update on Coverage Company Ticker Current Share FRC Fair Value Name: Symbol Price: Estimate: Fiore Cannabis CSE: FIOR $0.08 n/a Ltd. FRC Update We are temporarily suspending coverage on Fiore, as we would like to see the upcoming Q3-2021 financials prior to revising our projections. We are expecting a strong Q3 amid the relaunch of Fiore's extraction lab operation at its Apex facility. Full operations at the Apex facility are expected to commence this quarter. We will resume coverage once the company publishes Q3 results (expected in late November 2021). Weekly Cannabis Commentary Cannabis Industry Performance October 12, 2021 U.S. Companies YTD 1-Week 1-Year Curaleaf Holdings Inc. -17% -1% 29% Trulieve Cannabis Corp. -32% -5% 21% Green Thumb Industries Inc. -8% -5% 59% Cresco Labs Inc. -27% -2% 13% Canadian Companies YTD 1-Week 1-Year Aurora Cannabis Inc. -31% -4% 64% Canopy Growth Corp. -57% -2% -30% Cronos Group Inc. -41% -4% -6% Tilray Inc. -35% -7% -35% HEXO Corp. -64% -3% -45% Organigram Holdings Inc. 30% -1% 70% Canadian Average -33% -3% 3% U.S. Average -21% -3% 31% Indices Canadian YTD 1-Week 1-Year HMMJ -21% -1% 20% MCAN -9% -1% 16% XCAN -23% -2% 0% U.S. YTD 1-Week 1-Year MSOS -28% -3% 18% Source: FRC ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 20 Last week, both U.S. and Canadian cannabis stocks were down 3%. Key developments included: ➢ Ohio lawmakers introduced a bill to legalize recreational marijuana. ➢ U.S. Senator Elizabeth Warren sent a letter to the U.S. Attorney General pushing to remove cannabis as a federally controlled substance. ➢ Illinois’ recreational cannabis sales totaled $997M in 2021 (9M), up 49% from 2020 (full-year) sales. Valuation As of October 12, 2021, the Canadian big four LPs were trading at a 37% premium (down from 40% in the previous week) over their U.S. peers. October 4, 2021 October 12, 2021 Canadian Companies Ticker TEV/Revenue TEV/EBITDA TEV/Revenue TEV/EBITDA Aurora Cannabis Inc. TSX: ACB 7.1 NM 7.2 NM Canopy Growth Corp. TSX: WEED 11.2 NM 10.9 NM Cronos Group Inc. TSX: CRON 17.8 NM 16.7 NM Tilray Inc. NASDAQ: TLRY 10.9 NM 9.3 NM HEXO Corp. NYSE: HEXO 5.6 NM 5.3 NM Organigram Holdings Inc. TSX: OGI 9 NM 8.7 NM AVERAGE 10.3 NM 9.7 NM MEDIAN 11.2 NM 10.9 NM MINIMUM 5.0 NM 5.0 NM MAXIMUM 17.8 NM 16.7 NM U.S. Companies Ticker TEV/Revenue TEV/EBITDA TEV/Revenue TEV/EBITDA Curaleaf Holdings Inc. OTC: CURLF 8.9 33.1 8.4 31.3 Trulieve Cannabis Corp. OTC TCNNF 7.1 15.5 7.6 16.6 Green Thumb Industries Inc. OTC: GTBIF 8.4 22.8 7.8 21.2 Cresco Labs Inc. OTC: CRLBF 4.9 15.0 4.5 13.9 AVERAGE 7.3 21.6 7.1 20.8 MEDIAN 7.8 19.2 7.7 18.9 MINIMUM 4.9 15.0 4.5 13.9 MAXIMUM 8.9 33.1 8.4 31.3 Implied Premium (Canada vs U.S.) (Average) 40% 37% Source: S&P Capital IQ, FRC The following chart shows the average EV/R of the companies we track in both countries: ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 21 Average EV/R Source: S&P Capital IQ, FRC Canadian Retail Cannabis Pricing Province (As of 2021/10/12) Average Price per Gram Average Price per Gram THC Average Price per Gram CBD # of Products Min. Price Max. Price B.C. $ 9.39 $ 9.45 $ 8.45 239 $ 3.89 $ 15.71 Ontario $ 9.16 $ 9.29 $ 7.87 392 $ 3.57 $ 19.99 Quebec $ 9.10 $ 9.10 $ 9.05 281 $ 3.60 $ 21.68 Alberta $ 10.46 $ 10.45 $ 10.61 439 $ 3.14 $ 22.00 N.B. $ 9.26 $ 9.35 $ 8.07 231 $ 3.57 $ 15.99 P.E.I. $ 9.61 $ 9.62 $ 9.34 197 $ 4.40 $ 23.30 Newfoundland $ 9.88 $ 9.84 $ 10.17 199 $ 4.08 $ 25.84 Yukon $ 16.33 $ 14.49 $ 12.68 9 $ 12.68 $ 16.41 N.S. $ 9.91 $ 9.94 $ 9.50 203 $ 4.64 $ 42.85 Nunavut $ 13.15 $ 13.35 $ 18.41 32 $ 9.43 $ 17.91 Northwest Territories $ 14.53 $ 12.64 4 $ 12.08 $ 17.28 Manitoba $ 11.31 $ 11.21 $ 11.46 372 $ 3.93 $ 23.57 Saskatchewan $ 11.78 $ 11.64 $ 12.07 275 $ 4.40 $ 38.50 CANADA $ 11.07 $ 10.80 Province (As of 2021/10/4) Average Price per Gram Average Price per Gram THC Average Price per Gram CBD # of Products Min. Price Max. Price Max. Price B.C. $ 9.43 $ 9.49 $ 8.45 240 $ 3.89 $ 15.71 $ 15.71 Ontario $ 9.21 $ 9.34 $ 7.87 391 $ 3.57 $ 19.99 $ 22.66 Quebec $ 9.12 $ 9.12 $ 9.05 279 $ 3.60 $ 21.68 $ 21.68 Alberta $ 10.52 $ 10.50 $ 10.61 437 $ 3.14 $ 22.00 $ 22.00 N.B. $ 9.30 $ 9.39 $ 8.07 229 $ 3.57 $ 15.99 $ 16.28 P.E.I. $ 9.62 $ 9.64 $ 9.34 195 $ 4.40 $ 23.30 $ 23.30 Newfoundland $ 9.90 $ 9.84 $ 10.24 190 $ 4.08 $ 15.40 $ 15.40 Yukon $ 16.33 $ 14.49 $ 12.68 9 $ 12.68 $ 16.41 $ 22.28 N.S. $ 9.92 $ 9.95 $ 9.50 206 $ 4.64 $ 42.85 $ 42.85 Nunavut $ 13.15 $ 13.35 $ 17.41 32 $ 9.43 $ 17.91 $ 17.91 Northwest Territories $ 14.53 $ 12.64 4 $ 12.08 $ 17.28 $ 17.28 Manitoba $ 11.31 $ 11.23 $ 11.46 372 $ 4.87 $ 23.57 $ 23.57 Saskatchewan $ 11.78 $ 11.68 $ 12.07 272 $ 4.40 $ 38.50 $ 38.50 CANADA $ 11.08 $ 10.82 Source: Online Provincial Cannabis Stores, FRC The average retail price per gram fell week-over-week from $11.08 to $11.07. The chart below shows the Canadian retail dried cannabis flower pricing trend: ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 22 Canadian Retail Dried Cannabis Flower Pricing Source: Online Provincial Cannabis Stores, FRC Canadian Retail Cannabis Stores As of October 12, 2021, there are 2,643 retail cannabis stores, a week-over-week increase of 44 stores across Canada, including 19 in Ontario, two in Alberta, five in B.C., 10 in Manitoba, and eight in Saskatchewan. Nationwide Store Count ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
Page 23 Sept-7-2021 Sept-13-2021 Sept-20-2021 Sept-27-2021 Oct-4-2021 Oct-11-2021 Geographic Region Store Count Store Count Store Count Store Count Store Count Store Count Population Population / Store Alberta 677 677 684 688 689 691 4,428,247 6,408 B.C. 373 373 374 373 369 374 5,120,184 13,690 Manitoba 107 108 108 108 108 118 1,379,121 11,687 N.B. 20 20 20 20 20 20 780,890 39,045 N.S. 25 25 25 25 25 25 978,274 39,131 Newfoundland 30 30 30 30 30 30 520,437 17,348 Northwest Territories 6 6 6 6 6 6 44,982 7,497 Nunavut 39,486 Ontario 1,077 1,087 1,112 1,130 1,154 1,173 14,745,040 12,570 P.E.I. 4 4 4 4 4 4 158,717 39,679 Quebec 77 77 77 77 77 77 8,552,362 111,070 Saskatchewan 112 112 112 112 112 120 1,181,987 9,850 Yukon 5 5 5 5 5 5 41,293 8,259 CANADA 2,513 2,524 2,557 2,578 2,599 2,643 37,971,020 14,367 Source: Provincial Websites, FRC Weekly Psychedelic Commentary Psychedelic Industry Performance October 12, 2021 Company YTD 1-Week 1-Year COMPASS Pathways plc -29% 7% -17% Atai Life Sciences N.V. -36% -5% -36% Numinus Wellness Inc. -45% -7% 106% Mind Medicine Inc. -26% 3% 140% Braxia Scientific Corp. -80% -5% -80% Cybin Inc. 29% -6% 191% Levitee Labs Inc. -31% -9% -31% Seelos Therapeutics Inc. 57% -1% 157% AVERAGE -20% -3% 54% MIN -80% -9% -80% MAX 57% 7% 191% Indices YTD 1-Week 1-Year PSYK -30% 0% -30% PSIL -11% 1% n/a Source: TMX Money, FRC Last week, Seattle announced that it has decriminalized the non-commercial cultivation, possession, and personal use of a plant and fungi-derived psychedelics. In addition, a bill allowing for research and clinical studies of psilocybin was filed by Pennsylvania lawmakers. ©2021 Fundamental Research Corp. “18+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” Click here to view FRC’s complete list of top picks PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT
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