This article was originally published on March 15, 2019, when we first saw the ad — there is a new version now, slightly updated but teasing the same stock and promising a new “hot” deadline, so we’re republishing this here with very minor updates.
This particular ad is of the “Indiana Jones” variety, which is my favorite kind of ad… 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 ($1,995/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 1August 1, I believe three very important things will take place:“1. This company will finally finish construction on their newest processing facility [in April, he added: “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. [Again, back in April this was expanded to say: “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.”
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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.
Oh, wait, that was in March… As of the end of July, with the shares falling from C$10+ at the highs to about C$4, it is now down to about C$400 million.
There are in fact now two sell-side analyst covering the shares, according to the company, from Cormark and GMP Securities — GMP has 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 average analyst target of C$11.25 a share (current price is C$4.20, it was C$9.70 when Blanco’s ad first ran in March), 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 also 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 necessarily 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.
But the big news since our story first ran in March is that PharmaCielo announced that they are trying to buy a partner – they’d like to acquire the Australia-listed Creso Pharma (CPH.AX, COPHF), which has a line of CBD-based supplements, topicals, medications and pet health products, and is selling products in a dozen or so countries, so that presumably ramps up their global expansion plans to some degree. And they got their export license from Colombia, which they just announced in a press release last week, though I don’t know what the timeframe will be for identifying customers and building themselves into some future global CBD supply chain… particularly for the large and tightly regulated US and Canadian markets who have their own domestic hopefuls.
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, and with a new potential partner (the Creso acquisition can’t be finalized until the shareholders vote, which probably won’t be for a few months — if the deal happens, it will be paid for with new stock). 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 August 1 that will turn this C$900 C$400 million company into a barnburner. Maybe people will get excited about the Creso deal, maybe their next quarter will have improved financial news (though that probably won’t come until late August), but really, it’s probably just the copywriters making up artificial dates to encourage you to get off your butt and subscribe.
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 or to avoid cheaper supply from overseas (like Pharmacielo’s Colombian CBD), prices may change 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. The Creso deal indicates that they want to do more of their own selling, which would keep margins higher than if they’re just an ingredient supplier, but also pretty dramatically increase the competition risk and the need to invest heavily in marketing.
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!
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????
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.
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
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
Colombia, not Columbia.
Sorry, I live near the Columbia river, between the U.S. states of Oregon and Washington – so that spelling came naturally to me. Apologies.
Get with, “Green Leaf Pot Stocks”and “Stock of the Week” and you will get the stocks that will eventually take off. You will get them they will always be under $1 buy into them and you will be set when they start growing.
Thank :-: You
FRANK8MORRISS
Is this the same marijuana stock that Motley Fool is teases
No, that’s usually been Shopify — covered here.
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 know what the cost to produce is here in Canada, but I might be able to find out from an Ontario grower in which I have a very small holding. I suppose there is always the possibility of south American weed & its’ derivatives being imported from Columbia. It looks to me as though it is going to take a couple of years for all this pot nonsense to settle down, after which time many of the smaller growers will either have gone out of business, or get swallowed up by their more wealthy competition.
You are wrong, there is NO MORITORIUM ON NEW LICENSES IN ABERTA. I have been in current discussions with AGLC.
Alberta as of today has 275 licensed retail cannabis outlets, 19 of which were approved in last two weeks. AGLC has advised licensing is continuing.
You got “BLANK” = O right on the target…see my comments above
P.S. The only ones he ever got right were ACB, which I hold, and VFF which I sold for a profit. I believe ACB is poised fror great things in the future.
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)
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.
I wouldn’t be surprised if “advisors” like BLANK = O, already hold , and then make the recommends, and then after the moratorium watch as people bid it up, and then they sell as fast as they can…just sayin….his record speaks volumes in this aspect
Undisclosed “pump and dump” behavior is a significant SEC crime, and likely isn’t worth the risk for the very lucrative large publishing operations. I suspect it happens sometimes among “friends of friends,” particularly in smaller operations, but the major publishers and editors would be crazy to risk their golden goose for that.
Well Village Farms certainly paid off for me as it has tripled since I bought shares a few months back, who knows? Thanks Travis!
As they say, even a broken clock is right twice a day… But just think how much of the time it is wrong!
I agree, long VFF. VFF was the first MJ company to be profitable. Aphina was the second.
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!
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 mere $2.85…………….
this interview with Vincente Fox is a worthwhile watch in my opinion https://www.youtube.com/watch?v=eQiznlFMBNk
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.
Steve, it appeared by itself actually – perhaps key word monitoring or similar
The topic entries should recognize US ticker symbols if it’s a stock in our database, though the system has been glitchy lately.
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 made in the Canadian cannabis space after the 2016-2018 bull market and investors should increase exposure to newer markets including the U.S. and Mexico where the next multi-bagger opportunities will most likely come from. With Mexico heading down the path of legalization, it looks awfully like Canada in 2015 when Trudeau was elected on the back of his promise to legalize cannabis. Looking at what happened to the Canadian cannabis stocks since 2015, Khiron looks very promising from a risk and reward perspective.
Now a mere $1.46…
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?
That sounds like a repeat of the basic “pot stocks” pitch he’s been making for a couple years now, the stocks might have changed slightly but I think some of them have been in the ads since I covered his first marijuana spiel in 2016.
Doesn’t mean they’re bad stock ideas, but it does reinforce the notion that these deadlines and “by March 29” or “by April 4” pitches are mostly about getting subscribers, not about anything specific happening with those stocks or with the industry on that day. Just wait ’til we see how many newsletters pitch the April 20 date for any and all pot stocks.
April Fools day more appropriate?
Any idea which 6 stocks are now on ‘profits run’ recent webinar?
Haven’t seen that, did he drop hints?
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.
That is a good point, operating cost much cheaper there!!!
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 important distinction — they are trading for 0.45 — 0.75.
Could it be that the mighty Thinkolator missed that one? And if Pharma Cielo is indeed the one pitched, doesn’t Blueberries have a much better potential? If they grow to the same target price, it will be a 20X at today’s valuation…
Disclaimer: I currently do not hold any shares of either.
Share price is meaningless at this point (both of these companies will issue lots more shares before they’re through), but Blueberries is clearly pursuing pretty much the same business plan with different assets. Pharmacielo is a bit better match for the specific hints Blanco dropped, but they are quite similar companies — just PharmaCielo looks a little further along on the oil extraction front.
I’m a $800 “Lifetime” member, whatever that means,it’s is one of the levels in the semishyster/semi legit NICI. After everal months following their recos, I’m up about 700% but I speculate with only $1-2k per stock, depending on share price. While I would like to risk thousands to get a millionaire-making stock, I’ve done really badly with that style (aside from a lucky call with TLRY IPO) so it’s shotgun approach for me from now on. I think if you consider all these MJ stocks as making up your own ETF (I know, I own MJ also), you’ll do great over the long haul, though at 70 the haul is not quite as long. I’m tempted to put more in Acreage Holdings, where Boehner’s on the Board, and the one mentioned above with Fox but I’m close to maxing out MJ speculative funds. Never forget to bet on stocks run by weasel politicos.
Hello Capesurvuvor. I am a NICI subscriber myself, but also have motley Fool’s marijuana Mavericks. It looks like you are one willing to do diligent research and pay for additional advice like myself. I’m wondering I’d house would like to trade stock advice and give each other insight? The whole two heads are better than one scenario.
If so, my email is befree8733@gmail.com.
What does Motley Fool recommend?
if you are curious do your due diligence on SRUTF, looking good to me, but what do I know!
Oregon don. If you have done the reading and research it’s hard to miss on Sproutly Canada. Water soluble Nanotechnology has food beverage and HUGE Medicinal use
Any thoughts on Neptune Wellness Solutions?
Nasdaq: NEPT
Any thought
It’s a scam. 3 – 5x more production maybe, not 50x
equity research from GMP securities.
They did there subscription last summer-
https://gmpsecurities.bluematrix.com/sellside/EmailDocViewer?encrypt=2f65ce16-8cc6-434e-9bb9-970ea4127de2&mime=PDF&co=Gmpsecurities&id=noauthentication@bluematrix.com&source=libraryView&htmlToPdf=true
How long did it take you to think to use the “joint” venture in the marijuana stock write-up?
Just thought it was funny.
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.
When were they ever $1.00?? From what I can see, they have never been below $4.75.
Through their private equity offering.
FYI Pharma Cielo is a top rated stock at NICI.
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
No luck, AK, one not rated and one not even listed.
New to group and discussion and I really liked what I was reading on IIPR but I just checked the price and it’s in the $86 range.. ship sailed Travis? Or do you see other potential for the stock in your opinion..
Forward dividend yield of 2% and dividend growth anticipated of at least 25% over the next couple years, so it’s riskier and more richly valued here but I’m still holding IIPR. They report next week, so we’ll know more then — they have continued to sign new deals, so that’s good, and from their press releases it sounds as though they’re still getting strong cap rates on their deals, though probably that return is coming down slightly (at 15%, there’s room for it to come down a lot and still make this the most profitable niche in real estate). The biggest risks as I see them are: failure of their tenants, which would likely be from overlicensing by states that cuts into profits; and competition from other financiers both in the REIT space (there are a couple private REITs of meaningful size, maybe more coming) and, as US legalization proceeds, from traditional banks and other business lenders. The other risk is just “overvaluation,” at this point, and that could hurt if expectations drop but doesn’t worry me as much. My expectation is that the dividend will increase dramatically over the next few years and that will drive the stock higher, but it could certainly fall 20% without warning pretty easily.
I think IIPR is the best MJ stock. If you think back to the gold rush, not a bad comparison to the MJ surge, the guys who really made the money sold picks and shovels, didn’t go prospecting. IIPR model. Am buying more on drops.
I read about a Canadian stock that represented 10 pot companies but then I lost the name. Does anyone know what it is and have any comments about it? I do know it wasn’t trading on the US markets. Thanks so much.
One such stock is Canopy Rivers CNPOF – trades around 2.75 to 3.00
they are down more than 50% from Feb 2019, $2.16
In a word….. FLUSH!!!
Try Cronos
(CRON)
I heard (mj ) etfmg