OTC Play: Pharmagreen Biotech Inc (PHBI)

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Written By: Marc Challande

Francophone

Published : May 15th, 2022

Pharmagreen Biotech (PHBI) is a Nevada-based company specializing in the advanced science of tissue culture. It offers premium growing services that enhance the preservation and quality of the plan. Year-over-Year, the company, is down by 48%, but like many emerging companies, the current valuation does not represent Pharmagreen Biotech’s growth potential.

pharmagreen biotech
 

A Wild Range of Products

 

The Nevada-based company is specialized in the advanced science of tissue culture. Pharmagreen offers premium growing services that enhance plants’ preservation and quality. The company has four primary services: 

  • A pharma-grade quality cannabis flower tops and biomass production that will produce the highest quality raw material of cannabis from its state-of-the-art greenhouse;
  • A tissue cultured starter plantlet production that guarantees no genetic drift, bugs, and diseases; 
  • A cultivation schedule  optimizing deeding and fertilizing programs for specific strains based on the growing environment and lighting system, adding a level of security to any growth strategy;
  • Cold storage of tissue culture using suspended growth state technology enables cultivators to preserve their strains’ lives, preventing genetic drift, contamination, bugs, and diseases.

Pharmagreen’s solution brings many opportunities. Irs IoT facility reduces disease and contamination of plants, and the company can supply up to a million starter plantlets with reduced growing time and more space for flowers, increasing the frequency of production cycles and yielding higher profits in return. 

The company is currently building a 12,000 sq ft greenhouse utilizing IoT technologies for Cannabis productions and is targeting to increase its current gross annual revenue from $500k to $9M. In the short-term future, Pharmagreen intends to expand its production of flower tops and sales of tissue starter plantlets, sell in-house pharma-grade cannabis oils and derivatives under the Pharmagreen brand, and build a tissue culture starter plantlets production facility to supply in-house greenhouse needs and for third-part sales.

A High Growth Prospect

The cannabis market will witness tremendous growth in the upcoming years. The market is worth $68B in 2022 and should grow to $100B by 2030. With North American governments easing laws, and easier access to cannabis products, Pharmagreen Biotech will have its word to say in this growing industry.
Pharmagreen targets a high revenue for 2025 through 2 phases: its Greenhouse Phase1 and its Tissue Culture Biotech Phase2.
With Phase1, which targets $6M for 2022, according to its forecast, Pharmagreen will generate as high as $33M revenue for 2025. What is very positive is their percent margin. The company targets a 88% margin, giving the company significant leverage to save money and use it to expand faster. Also, the company expects to have free cash flow by next year.
Phase2 is planning to start in 2023. With the same EBITDA target, the company should bring $43.2M. These 2 phases combined, the company targets more than $98M! If we translate it into a share price forecast and consider there won’t be significant dilutions, it represents an x23 growth in only three years.

Share Movement

PHBI is currently traded at $0.01 for a USD 4M market cap. The stock price witnessed a 52-weeks high of $0.60 (reached on May 20th, 2021) and is now closer to its 52-weeks low of $0.007 (reached on March 9th, 2022). The stock price follows the general bearish market sentiment because of many factors, including hot inflation and geopolitical conflicts. Like many emerging companies, its chart data indicate the stock price is in a downtrend, with its Simple MA (200) above its Simple MA (20). The downtrend started on October 25th, 2021. 

About volume, it recently decreased. Its 50-days ADV is at 540k, while its 20-days and 10-days ADV are at 401k. Once again, markets face a sharp downtrend, and investors rather wait for better times. The stock price will remain highly volatile. The Bollinger Bands indicate that we could see high daily fluctuations between $0.007 and $0.016. Before the company sees significant revenues, the company will have considerable volatility.

Bottom Line

The company is currently in its early-stage project. If you are looking for a long-term investment, PHBI appears to be a great investment. The bearish market lowered many companies’ valuation Pharmagreen included, enabling you to get shares at a discount price. If everything goes well according to the company’s plans, you could definitely have a great return on investment.

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