If you are looking for a CBD play with growth, learn more about Cannibble Foodtech (PLCN.CN). It is an innovative Israeli food tech company that develops and manufactures food mix products that are enhanced variously with hemp seeds, hemp protein, non-active and active cannabinoids, where legal to do so.

A High Growth Sector Opportunity

Cannibble Foodtech is involved in one of the fastest-growing market industries. The CBD-infused products market is expected to reach $216.8 billion by 2028, at a CAGR of 45.6% during the forecast period, 2021-2028. The U.S. hemp-derived CBD market will reach $5.3 billion in retail sales in 2021, implying a 15% growth over 2020 sales of $4.6 billion. The market for CBD products is projected to grow into a $20 billion market by 2024—and the evolution of that is expected to come from beverages primarily and edibles, according to data from BDS Analytics and ArcView Market Research. Drinks and gummies were expected to be the fastest-growing product types in 2021 with 71% and 44% value growth, respectively.

Earnings/Fundamentals

The company reported a healthy balance sheet for the period ended December 31, 2021. Cannibble Foodtech announced it has the US $694k in cash and cash equivalents ($304k for 2020) for $981k in current assets. In the meantime, it has $1.1M in total liabilities, meaning the total shareholder’s equity is deficient by $157k. The company is getting better as, in comparison, the company’s deficiency for the year 2020 was $196k. So far, the PLCN’s most considerable expense is coming from the selling and marketing expenses ($632k) and general and administrative expenses ($826k). Cannibble had a higher basic and diluted loss per share than 2020 (-$0.12 vs. -$0.04). It is explained because the company wants to popularize the brand and its products in North America. The company reported $1.3M in net cash provided by financing activities in 2021, representing a 230% increase compared to the prior year ($416k).

The company has 21.7M shares outstanding shares and has been diluted through the year 2021:

• April 15, 2021: 26,882  ordinary shares to Amuka Capital Corp
• July 5, 2021: 160,936  ordinary shares to private investors
• December 22, 2021: 26,882 issued shares to Amuka Capital Corp
• December 29, 2021: 234,886 Yoav Bar-Joseph, Elad Barkan, and Ziv Turner
• December 31, 2021: 2,594,789 CLA conversion

The company also has 195k warrants that could lead to some more dilution. Besides this, the company has excellent fundamentals as most the companies usually have more than 80M shares fully diluted.

Share Movement

Cannibble Foodtech’s stock price is currently traded at CAD $0.54 for an $11.7M market cap. The stock saw its all-time high at $0.93 on its first day of IPO (March 7, 2022). Then, it went straight to its all-time low of $0.20. The stock is on an uptrend and is 170% higher than its lowest stock price. We can’t use the Simple MA (200) because Cannibble Foodtech IPOd recently opened, so that we will use the Simple MA (50). These data prove the chart data trend is bullish because the Simple MA (20) is above the Simple MA (50), with $0.54 vs. $0.51. Nevertheless, the stock is considered overbought because of the high RSI data. Its data is worth 88, meaning the stock is in overbought territory (over 70). It can be explained the volume occurring on PLCN is low and has a strong influence on this data. If its 50-days ADV only represents an average of 11k shares traded, this data is down for the 30-days ADV (4.8k) and the 10-days ADV (3.5k). The volume should remain low because the TSX Cannabis Index (XCAN) is down by 68% even if the stock price is on an uptrend. PLCN is one of the very few CBD stocks to have an uptrend. PLCN is one of the very few CBD stocks to have an uptrend.

Bids and asks are small orders. Any significant trades will have a substantial impact on the stock price. The Bollinger Bands support this idea as it says we could see fluctuations between $0.39 to $0.56. There aren’t significant support or resistance zone. If you are looking for a price target, Morningstar gives a 3-stars rating and a fair value of $1.54 but mentions it with extreme uncertainty.

Recent News

May 16th, 2022: PLCN announced that its product “The Pelicann Protein Brownie Mix” will be available at Sam’s Club Puerto Rico stores starting on May 15, 2022. Sam’s Club is a division of Walmart Inc. and operates over 600 stores in the United States and Puerto Rico.

Yoav Bar-Joseph, Cannibble’s CEO, commented, “We are extremely pleased, as this is a major milestone for Cannibble and its shareholders. One of our products has been accepted for sale by one of the leading US retailers on a trial order for seven stores. On completing the trial run, we hope to sell our products in Sam’s Club stores in the US.”

Bottom Line

Cannibble Foodtech (PLCN.CN) has good fundamentals, is overperforming the cannabis sector, and recently announced that Sam’s Club will sell “The Pelicann Protein Brownie Mix.” Even if the cannabis sector is currently not trendy, you could take advantage of it. If the stock gets more volume, get ready to see high price fluctuations because of the low number of outstanding shares.

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