What’s being hinted at as the “1 Stock for a Life-Changing Marijuana Payday?”

Solving Blanco's "March 29 Most Profitable Day" Marijuana Pitch for Penny Pot Profits

By Travis Johnson, Stock Gumshoe, March 25, 2019

This particular ad is of the “Indiana Jones” variety… it spins a yarn of a high-risk adventure, deep in the forbidden jungle, to discover a massive profit opportunity. How can one resist?

Well, we’ll try. And the best way to resist a sales pitch, of course, is to understand it. This spiel is from Ray Blanco for his Penny Pot Profits newsletter ($1,999/year, nonrefundable), and he’s hinting at “The 1 Stock for a Life-Changing Marijuana Payday” … so what is it?

First we’ll slap ourselves in the face a bit, splash on a little cold water, and remind ourselves that no, there is no “one stock” that will change our lives (or if there is, we certainly won’t know which one it’s going to be in advance… diversify!)

But yes, we’ll throw the clues into the Thinkolator for you and get some answers percolating… so what are those clues?

Here’s the final sell on the order page (sometimes we like to work backwards):

“… starting April 1, I believe three very important things will take place:

“1. This company will finally finish construction on their newest processing facility, allowing them the ability to fully harvest and process 5,530,000 kilograms of medicinal grade marijuana.

“2. As soon as they do, they’ll have everything in place to begin commercial sales of their medicinal oil extracts, sending billions rushing onto this company’s balance sheet — a rate never before seen in history for a company this small. As soon as this happens, its share price could explode faster than ever before seen in modern history.

“3. By the time every newspaper, blog and TV show around the world are all left speechless by this company…

“… a select few investors who acted fast on this story could start walking away with more millions than they could ever spend.”

The “Indiana Jones” part of the story is the lead-in…

““When the Armed Guards Confronted Me… I Knew I Was Just Moments Away From the Biggest Stock Discovery of My Career….

“… what I saw hidden behind those gates — deep in the heart of the Andes Mountains — left me convinced…

“This could go down in modern history as the biggest stock market gain ever seen.”

And he includes a photo of what looks like a warehouse under construction, somewhere in the Andes, and says…

“This building may not look like much…

“But it’s hiding one of the biggest secrets of the 21st century.”

What else are we told?

It’s apparently a small company…

“There Isn’t a Single Mainstream Financial Analyst Covering This Tiny Stock…

“… its shares are still trading for just pocket change.”

And the insiders are somehow compelling people, and have been “acquiring” shares (note, that’s often different from buying shares — insider buying is a bullish signal, insiders giving themselves shares… not so much bullish).

“Over the Past Few Weeks, Company Insiders Have Acquired Over 1,815,000 Shares….

“One is a published author and international lecturer. From being a former adviser to the United Nations to helping establish the prestigious World Health Professions Alliance, he‘s quietly becoming one of the most influential people of the 21st century….

“Another has spent the past 27 years building some of the world’s largest companies. Most recently, he helped build a business to over 17,000 employees….

“Another is becoming one of the most celebrated and respected entrepreneurs and investors in the world. He’s on the board of some of the most powerful finance institutions in the world, like JPMorgan Chase Bank and President’s Choice Bank, to name a few. He even founded one of the world’s fastest growing personal finance startups.”

And what’s so special about this company? Apparently it’s a marijuana grower… and something about its location or its technology or techniques means that Blanco thinks it’s going to become the low-cost leader:

“This company has done what John D. Rockefeller and Standard Oil did in 1870.

“Through an innovative harvesting process that involves the use of…

  • 5 different reservoirs…
  • 12 hours of natural sunlight every day…
  • And extremely fertile soil…

“They’ve been able to cut their costs to about 5 cents a gram — a number so low they were almost embarrassed to share it with me.

“On top of that — they created some of the highest quality products on the market.

“In fact, they have over 150 registered strains of medicinal-grade cannabis!”

He also says that the “average grower” pays more than $1 per gram of marijuana, so this is a 95% lower cost. That seems like a number you’d want to double-check, I don’t know what the average cost of marijuana production might be.

And, of course, he throws out the conservative-sounding but completely unsupported numbers about “if the company takes over just a little fraction of the global industry…”

“Just imagine, conservatively speaking, if this tiny company only manages to capture 10% of the legal marijuana market…

“Billions would start flowing into this tiny company!

“Even that would be enough to build some of the fastest fortunes in history.”

Sure, I suppose it’s possible that a little startup that just built its first facility will take over 10% of the global cannabis industry someday… but it ain’t a “conservative” guess.

Any other clues? He does tell us the size of the growing operation…

“This company has over 12.1 hectares (or 1.3 million square feet) of greenhouses to grow their marijuana…

“That means they can grow over 5,530,000 kilograms of marijuana per year!”

That would indeed be dramatically more efficient production than the big Canadian growers — if the stats in this article are correct (I didn’t check), then the largest Canadian growers are on pace, as a group, to have more than 10 million square feet of production space over the next year or two and produce about three million kilograms of marijuana flower per year.

Heck, the Emerald Health/Village Farms partnership has the potential to put almost five million square feet of greenhouse space into marijuana production itself if they wish (they’ve only committed to less than a quarter of that so far, but have the vegetable greenhouse space and extra land they could use)… though at current production estimates that would apparently only provide ~400,000 kg/year.

So if Blanco’s calculations make any sense, then a greenhouse operation near the equator is dramatically more efficient than a greenhouse in Canada. I’ll buy that, but don’t know if it’s anywhere near as dramatic as he says — it seems like 1 million square feet of greenhouse space would be expected to generate something in the range of 100-150,000 kilograms of marijuana flower a year in Canada, could that same space really generate 50X as much in Colombia? Maybe, I guess, I’m no horticulturist, but there’s room for some skepticism.

But anyway, now that we start with a little skepticism… what’s the company? This is the Canadian/Colombian marijuana producer PharmaCielo (PCLO on the Canadian Venture exchange, PHCEF OTC in the US). They went public through a reverse merger with a Canadian blank check company that consummated in January, though also raised money in a private placement last year that was widely covered in the marijuana investment press.

And it’s a fairly big company market cap around C$900 million, with the primary business being a Colombian licensed marijuana grower. There is in fact one sell-side analyst covering the shares, according to the company, from GMP Securities — they have similarly positive things to say about the company in terms of massively globe-leading production yields and potential for low-cost CBD oil production for export…. though the analyst targets C$12 a share (current price is C$9.70), which is, of course, a far more conservative stance than Blanco’s “your small investment will turn into millions next week” pitch. And, one must note for fairness’ sake, GMP Securities is not a disinterested party — they were one of the agents for the private placement last year and presumably enjoy the investment banking business from PharmaCielo.

PharmaCielo aslo has an investor presentation posted here if you’d like to see their plans and strategy (or you can see the pre-listing presentation here from November). They do own a licensed medical marijuana business in Colombia, with retail customers, but their goal seems to be to build a global supplier of cannabis oils for consumer packaged goods.

They do own about 12 hectares of greenhouse space, which they say gives them capacity for about half a million kilograms of flowers per year — which is much more rational than Blanco’s 5+ million… but you can see where he gets that number, that comes from the 10X larger space that’s available to PharmaCielo from contract growers (most of whom are presumably currently growing roses and chrysanthemums, one of Colombia’s largest exports today is cut flowers). They’re building up their industrial capacity to turn that marijuana into cannabis oils, which seems like it’s the real focus of the company.

And, yes, they would like to become a major exporter of cannabis oils — they do have a couple joint ventures now, with partners in Mexico and Italy, though it sounds like that’s still in a pretty early stage. Presumably they’re talking to large customers about becoming a core ingredient supplier, but it’s hard to guess where they are in that process. They are not the only company growing marijuana legally in Colombia, nor are they going to be the first to export (that was Clever Leaves, last month), but they may have other competitive advantages that I don’t know about. There has been substantial interest among the big Canadian players in expanding to South America, too, so both Canopy and Aphria have invested in Colombian companies in the past year or so, and it’s unclear to what extent they might be interested in growing for eventual export to Canada or Europe versus just establishing a bigger global business for non-Canadian consumers.

So that’s where we are, dear friends — a licensed Colombian marijuana producer, with a fair chunk of cash that they raised with their Canadian listing in January that they’ve apparently been using to expand capacity and get their oil processing plant developed. Most of the commentary from them that I’ve seen envisions meaningful export revenue beginning in 2020.

And no, I don’t know of any magical event that we should foresee coming on March 29 that will turn this C$900 million company into a barnburner — their quarter ends at the end of February, I think, so it could be that they’ll have a quarterly update at some point in the next few weeks… but March 29 would be a bit early for that (their MD&A for the year ended November 30 is here if you want to see the previous SEDAR filing… the Filing Statement with the IPO/merger details is here). The only thing that pops up as meaningful in their filings is that March 29 is the date by which they’ll have finalized their agreement and budget for their Italian joint venture… which might get some attention, I suppose, and may become a meaningful business for exporting CBD oils to Italy, but I doubt it will make an overnight difference to the stock’s valuation.

My general qualm about marijuana growing companies is that I have no idea what the market will look like in a couple years — agricultural companies and raw-ingredient suppliers who lack a proprietary product are subject to market forces, so if the massive ramp-up in investment in marijuana production leads to oversupply, or if legal marijuana ends up being price-controlled in an effort to squash the black market, prices may fall substantially. Certainly we’ve seen overproduction and weak prices in some US states, though it’s way to early to have any real understanding of what a mature market might look like — that’s just a risk factor that concerns me… in the case of PharmaCielo, I can see the possibility for them growing into ingredient-supply relationships with major packaged goods or medicinal products companies, but have no idea what kind of pricing that would entail, what regulatory restrictions there might be on international trade in psychoactive cannabis products, or if they’d be a price taker or a price maker.

So for me, lots more questions than answers — but that’s generally always the case when I look at a prospective marijuana stock, which is part of the reason why I’ve managed to avoid making millions of dollars on the current crop of pot favorites… so don’t listen to boring old me when it comes to pot stocks, but do your own research and make your own conclusions. All I can do is tell you is that PharmaCielo is the stock that Blanco is pitching, encourage you to count to ten before subscribing to a nonrefundable newsletter just to get a “secret” stock tip, and suggest you make your own call… it is, after all, your money.

PharmaCielo has been in the press for a couple years, the idea of Colombia becoming a legal drug exporter 25 years after Pablo Escobar’s death is too compelling a story for the media to ignore (my favorite Escobar story is that his estate was turned into a theme park, and that some of his Hippos have become a wild invasive species in Colombia… but I’m kind of odd), and it has also come up in Stock Gumshoe discussions a few times over the years… so if you’ve been following the story or chewing on those numbers, please do jump in and share your thoughts with a comment below. Thanks for reading!

P.S. We do always want to know about what readers think of the newsletters they’ve subscribed to — if you’ve tried Blanco’s Penny Pot Profits, please click here to share your experience with your fellow investors. Thanks again!


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40 Comments on "What’s being hinted at as the “1 Stock for a Life-Changing Marijuana Payday?”"

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coolsoupy
Guest
0

The market has gone quickly beyond growers with oils, edibles etc being the money makers.
This stock is new so I don’t have any clues either.
KHRNF is in Columbia – a penny stock with Mexico’s ex-Prez Vincente Fox on their board. They ahve reported being able to grow flower for .05/ gram.
Much better play for me????

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steveflick
Irregular
627

I believe the Thinklolator is spot on with PHCEF PharmaCielo. However, I agree with @coolsoupy KHRNF Khiron in Columbia if you want to play the Central America/Mexico/South America market. I bought a little bit Khiron $3.5k a year ago, and am up 165%…..Ted Ohashi in his free weekly enewsletter Let’sTokeBusiness believes Khiron is still a good value buy with future gains potential. Ted also has a Seeking Alpha article on Khiron.

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coolsoupy
Guest
0

As a followup does he count on subscribers not being able to read financials?
Ugly wannabe ! Funded with 30 million to take over the world

socr
Guest
0

Insane overvalued,call me when -$1,then will start taking a look before maybe putting some little exchange money in this full of futur phantasy story

mfigueroa
Member
1

Colombia, not Columbia.

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steveflick
Irregular
627

Sorry, I live near the Columbia river, between the U.S. states of Oregon and Washington – so that spelling came naturally to me. Apologies.

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Nuzzpop
Guest
0

Is this the same marijuana stock that Motley Fool is teases

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cocobolo
Member
98
Anything to do with Blanco is, of course, subject to be taken with a huge dose of salt. As an aside, currently in Canada there is a shortage of legal pot and its’ related substances. No shortage in the black market of course. The Alberta government (for example) has placed a moratorium on issuing new retail licences due to this shortage. There are any number of growers attempting to fill this void, and presumably by this summer the supply is supposed to ramp up again. Which, in turn, should re-open the Alberta Government to issuing new retail licences. I don’t… Read more »
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Bradley short
Guest
0

My experience with Ray Blanco is that many if not most of his Marijuana recommendations come weeks to months AFTER the particular stock has been recommended by others (Jeff Siegel, Michael Robinson to name a few)

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socr
Guest
0

Most of Blanco’s recs from last year are down a lot, OSTK -50%,BTX -44%,ARFXF -48%, ESPR-7% dont ever pay for such lousy advice, I dont really think he bothers. about giving good recs other than receiving high fees ,its a very easy way to make lots of money for nothing as long as they can lure in people with their insane claims and promises.

Rick
Guest
0

Well Village Farms certainly paid off for me as it has tripled since I bought shares a few months back, who knows? Thanks Travis!

msully56
Irregular
4

As they say, even a broken clock is right twice a day… But just think how much of the time it is wrong!

Jerrry
Guest
0

If this company can produce cannabinol (medical marijuana), I believe it will become a major medication that will be used by seniors, since It has so many side benefits. With that in mind, PCLOV is a company that bears watching and, for speculators, purchasing before it breaks out I would feel more comfortable if the company was based in the U.S. or Canada, but, no risk, no reward!

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jsr1972
Member
24
Khiron (KHRNF) is my #1 stock out of the x21 “Cannabis” companies I currently have in my portfolio i.e. it is my largest investment. Most excited to see how this does in the near term and beyond. To have the former President of Mexico (Vincente Fox – who is also former regional CEO of Coca-Cola) as the ‘front man’ with his connections is HUGE. Plus their South America business plan appears pretty immense. Cannot believe how little buying attention this is getting (for now). Some are referring to Khiron as “The Canopy Growth of South America”. Currently trading at a… Read more »
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jsr1972
Member
24

this interview with Vincente Fox is a worthwhile watch in my opinion https://www.youtube.com/watch?v=eQiznlFMBNk

steveflick
Irregular
627

Thanks jsr1972 for the KHRNF youtube with Vincente Fox, Steve
PS – how did you get #Khiron Life Sciences (KHRN.V KHRNF) in the ‘Add a Topic’ field – I tried and did not work, even copied from your post and pasted to ‘Add a Topic’ still did no work.

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jsr1972
Guest
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Steve, it appeared by itself actually – perhaps key word monitoring or similar

jsr1972
Member
24
The below is an extract from an online article I think worth sharing: Khiron Life Sciences: The Latin American Cannabis King > As investor look for the next multi-bagger opportunity in the cannabis space, we think Khiron should have a place in your portfolio due to its solid positioning in Latin America and strategic value to potential acquirers. Its partnership with Dixie is a game changer as it enters the U.S. market targeting the Hispanic population. Compare to some of the biggest names such as Canopy, Aurora, or Aphria, Khiron deserves more attention. We believe that the easy money has… Read more »
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Allan Jiracek
Guest
0

Ray Blanco is telling me that the marijuana stocks for the first round are going to be (CARA), ( XXII), (TRTC) and a bonus where I think is not going anywhere (MJNA). Anyone else going by this? Is the first round April 4th?

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Tom
Guest
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Eventually the major American/Canadian Entrepreneurs will go South and allow major markets in South American to grow the operation plants. Operation costs and full overhead are as much as 50% higher in Canada & USA. Growers specifically will realize: less headaches in labor, cultivating, space and overall regulatory overhead from their respective Countries.

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Walter P
Guest
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The CEO of Pharma Cielo (the one who is well-connected in Europe) left last week to become the CEO of Blueberries Medical Corp (BBRRF). They only went public in February but are already listed in Canada, US OTC and Frankfurt exchanges. It looks like they also check most if not all the boxes of the ad — (Canadian-Colombian Company, have 150 patented marijuana strains, the same production costs, recently acquired [prime] real estate and are building cultivation facilities (in addition to what they have now). the same ambitions (cultivation/distribution/export –each requires a separate license and they hold all 3)). One… Read more »
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Drew
Guest
0

Any thoughts on Neptune Wellness Solutions?
Nasdaq: NEPT

maggie d
Irregular
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Any thought

Sargam
Guest
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It’s a scam. 3 – 5x more production maybe, not 50x

Sandra
Guest
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How long did it take you to think to use the “joint” venture in the marijuana stock write-up?

Just thought it was funny.

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newlife4.0
Guest
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I got into Pharmacielo @ $1.00. I regret not doing it at $0.50 when I had the opportunity. I feel really good about it.

msully56
Irregular
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When were they ever $1.00?? From what I can see, they have never been below $4.75.

saintsfan
Member
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Through their private equity offering.

Mike Taylor
Guest
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FYI Pharma Cielo is a top rated stock at NICI.

Andrew Knutson
Guest
0

Hi there, I’m a member too of NICI, but can’t afford the $800 version. Could you let us know if Cardiol and Khiron are also rated a 5? I’m pretty down over the past year and am looking for ways to recoup.
Thanks

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steve
Guest
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No luck, AK, one not rated and one not even listed.

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