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Invictus MD Strategies Offers Dividend and Growth in Cannabis Sector

Ryan Allway

November 7th, 2016

News, Top News

There is a fairly new player in the booming legal cannabis market that offers public company investors a unique angle. Invictus MD Strategies Corp. (OTC: IVITF) (CSE: IMH) has flown below the radar of many U.S. investors, but the company deserves a closer look as it executes an acquisition strategy that has already proven to be profitable.

In a market that is filled with speculative business plans and ballooning valuations based on hope, Invictus will be offering a dividend to shareholders next week. This alone may be unprecedented in the legal cannabis public market and should serve to validate the company’s approach.

Business Model

Dan Kriznic, who serves as the company’s CEO, is a CPA with an extensive background in both public and private company consulting, and he has previously served as EVP and CFO for an investment company with holdings across a number of industry sectors. He was instrumental in building the value of the company from a $10 million enterprise value to a $500 million enterprise value.

Seeing the relative success a number of private companies were having in the emerging legal cannabis market, along with the limitations many of them were having as a result of a lack of experienced business management, Dan started Invictus to help fill some of the gaps. In essence, Invictus acquires a stake in successful private companies and lets the existing management continue to grow their own business through their existing strengths. He acts as a financial consultant, examining the books and the market, identifying opportunities to streamline the organization and maximize the profitability of the acquired company.

The acquired company gains access to financing vehicles through the association with Invictus as a public company. Dan’s experience helps to guide the company’s decisions and allows the managers to focus on the things they do best.

The Model in Action

Invictus’ first acquisition was an 82.5% stake in Future Harvest, a 20 year old company servicing the hydroponic and indoor growing industries. Invictus initially assumed a 20% stake in Future Harvest in March 2015 and has grown its ownership share since.

The other thing that has grown over that time is Future Harvest’s revenue. In October, Invictus announced a 50% increase in year over year revenue for the most recent quarter. The company has been so successful that Invictus plans to spin it off into a newly formed public company in 2017. Invictus shareholders will receive one share of the new company for every share held in Invictus MD at the time of the transaction, pending approval.

That alone sounds compelling, but a really interesting thing happened along the way. In February of 2016, Future Harvest sold its lighting division to Sunblaster Holdings for about $4.8 million in cash. This represented a 350 percent return on investment in only 11 months. Proceeds from the sale have allowed Future Harvest to more aggressively grow its fertilizer division, and revenues are increasing in step with this plan. In addition, the company used the proceeds from sale to acquire new bottling equipment as well as return $1 million back to shareholders.

For Invictus shareholders of record as of November 21, 2016, the company is offering a $1 million dividend as a result of the profitable sale. Based on the shares issued and outstanding, this works out to about $.10 per share. As of this writing, shares are trading at about $.80/share (Canadian), which would reflect a 12.5% return. Dividends from cannabis stocks are rare, if not unprecedented, and the rate of return in this particular case is very high for the stock market in general.

Looking Ahead

The path Invictus MD and Future Harvest have taken offers concrete proof that the model can work, and work well for all parties involved. Keep an eye on future developments as Invictus has already announced a Letter of Intent to acquire a stake in Zen Labs, a cannabis-testing lab that is awaiting a federal license from Health Canada. The company also owns 100% of Poda Technologies, a unique dry herb vaporizer. There may be interesting developments coming from that angle in the coming months.

Invictus MD has shown a shrewd business sense in its dealings to this point, and a focus on returning value to shareholders. These qualities are not entirely common in the burgeoning legal cannabis market, and the company certainly bears watching over the coming months as further plans unfold. The upcoming dividend deadline is but one reason to consider investing.

For more information, visit the company’s website at www.invictus-md.com/.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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