ICC International Cannabis has been a “huge disappointment”, this investor says

With its investments in expanding markets in Latin America and Europe there’s a lot to like about Vancouver-based cannabis company ICC International Cannabis Corp (ICC International Cannabis Corp Stock Quote, Chart, News CSE:WRLD.U), but the company has yet to spark investor interest.

That makes the path forward a little foggier for those investors still holding the name, says portfolio manager Bruce Campbell, who says his firm StoneCastle Investment is keeping its ICC holdings for the time being.

“We haven’t added anything back to that position and we’ve kept what we have right now. [But] it has been a huge disappointment,” says Campbell, founder and portfolio manager at StoneCastle, to BNN Bloomberg last Friday.

“One of the things that I talked about when I had it as a Top Pick before was that we saw this transition where Canada was first for the cannabis market, we started to see some US [growth] and then the next wave was going to be Latin America and Europe,” Campbell says.

ICC, which holds interests across Latin America, Europe, Australia and Africa, has seen its share price plummet over the past ten months and while the stock can be seen as a participant in the current sector-wide slump, the pain goes deeper, as WRLD.U, after climbing with the rest of the pot stocks last fall ahead of Canada’s legalization date, didn’t get much of a boost from an early-2019 sector-wide lift. Consequently, the stock is currently down 66 per cent year-to-date, with its share price now lurking below the ten cent mark.

ICC in May announced the acquisition of a 49.9-per-cent interest in Wayland Group’s international asset and license portfolio. Wayland is based in Oakville, Ontario, but has production operations in Germany, Switzerland and Italy and assets in Colombia and Argentina. The deal involves Wayland taking on a 41.7 per cent ownership stake in ICC with 300 million ICC shares.

Campbell says that downward pressure on ICC’s share price might have something to do with Wayland’s selling of some of its shares.

“I’m not sure what’s going on from a stock perspective, whether Wayland sold down some of their shares in ICC or if someone else has been selling down, but it certainly isn’t doing very well from a stock perspective,” he says. “Wayland, obviously, they’ve had some challenges. They recently announced that they’re selling their Canadian assets and so we thought that perhaps that’s what’s going on.”

“If you look at the thesis of why we originally owned it, we still love that — we keep looking at Europe and keep thinking that the opportunities are there and we think that it’s probably about three years behind where we are in Canada. So that’s exactly the type of asset that we want [but] maybe this is the wrong horse,” Campbell says.

Last month, ICC announced an exclusive supply and commercial rights agreement with New Zealand medical cannabis company NUBU Pharmaceuticals where ICC will supply NUBU with a suite of pharmaceutical-grade medical cannabis products including cannabis oil, capsules, inhalers and vaporizing cartridges.