Emblem Corp should be selling cannabis oil in 4-8 weeks, says PI

Some good news for Emblem Corp. (Emblem Corp. Stock Quote, Chart, News: TSXV:EMC) is good news for its shareholders as the company should soon be entering a new market, says PI analyst Jason Zandberg.

Yesterday, Emblem Corp announced that it had received confirmation from Health Canada that its license under the ACMPR (access to cannabis for medical purposes regulations) will be amended to permit the production of cannabis oils.

“This is an incredibly important milestone for us as a company,” said Gordon Fox, chief executive officer of Emblem. “With our ability to extract cannabinoids, we can now actively execute the business plan we’ve built for our pharmaceutical division.”

Zandberg says Emblem should be up and running in the cannabis oil market early in the new year.

“This production license is important for Emblem’s strategy of creating advanced pharmaceutical formulations for future applications as well as providing standard cannabis oil products to sell into today’s MMJ market,” he says. “We expect the Company will achieve its cannabis oil sales license within four to eight weeks.”

Emblem’s management says its entry into the cannabis oils space is backed by science.

“Cannabinoids have real therapeutic value, as evidenced by the products Cesamet, Marinol and Sativex all having been approved as prescription drugs by Health Canada,” said John H. Stewart, who is the CEO of Emblem’s pharmaceutical division. “In addition, there have been numerous reports published in the scientific literature pertaining to the medical use of cannabinoids — with evidence of efficacy in patients with chronic pain, multiple sclerosis, nausea, neuropathic pain, PTSD (posttraumatic stress disorder) and wasting syndrome. The active components in cannabis will be extracted, purified and incorporated into advanced formulations, in order to enhance their therapeutic utility.”

In a research update to clients today, Zandberg maintained his “Buy” rating and one-year price target of $3.50 on Emblem Corp.

Zandberg believes Emblem will post EBITDA of negative $5.54-million on revenue of $139,000 in fiscal 2016. He expects those numbers will improve to negative EBITDA of $3.01-million on a topline of $7.56-million the following year. In fiscal 2018, Zandberg thinks Emblem will turn EBITDA positive and generate EBITDA of $5.28-million on revenue of $29.67-million.

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