TGOD stock is in the green on Friday after it was announced that The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) had amended its purchase agreement with EnWave Corporation (TSXV:ENW) (OTCPK:NWVCF).
Amended EnWave Deal
The Green Organic Dutchman Holdings Ltd had previously agreed to purchase three of EnWave’s 120kW Radiant Energy Vacuum dehydrating machines under the original terms of the deal signed in March 2019, for use at its Valleyfield, Quebec facility. However, in a move reflective of the cost-cutting measures being taken by the cash-strapped cannabis producer, TGOD will now purchase just one machine, having already paid in full for one and partially for two more. TGOD stock is currently trading for $0.61.
EnWave's Radiant Energy Dehydration is a rapid, low-temperature drying method that maintains the product’s color, flavor, and nutrients during the drying process. The process is said to be faster and cheaper than freeze drying, with better product quality than air drying or spray drying. The Green Organic Dutchman has already purchased a 60kW REV machine for its Ancaster, Ontario facility, which is slated for commissioning in the coming months. News of the amended deal has sent TGOD stock up around 3.5%.
Nightmare 12 Months for TGOD Stock
Today's gains provide some respite for TGOD investors after a nightmarish 12 months, which have seen the embattled pot stock fall from a peak of $5.48 last March to today's price of just $0.61. While a degree of those losses in TGOD stock can be attributed to the broader underperformance of the cannabis market in Canada, the Ontario-based firm has had a rough time as of late.
Having splashed the cash in the first year of legalization in an effort to snap up as large a market share as possible straight out of the trap, cannabis sales have stagnated over the last year and left The Green Organic Dutchman high and dry. It was reported in October that the company had put its Ancaster site on the market for around C$95 million despite construction not yet being finished, eventually securing a leaseback agreement on the property in which it netted C$23 million in funding to complete construction. However, TGOD stock has continued to slide more than 50% since.
Will there be any way back for this troubled pot stock?
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