Shares of TILT Holdings (CSE:TILT) (OTCQB:SVVTF) are climbing rapidly this week, placing the company firmly on the market radar. One of cannabis's biggest gainers this week, TILT stock is now selling for $2.88 CAD, up 12.5% at the time of writing.
The gains are attributed to the Vancouver-based company's preliminary Q4 and fiscal 2018 earnings report. Investors liked what they heard, and now TILT is climbing.
About TILT Stock
TILT provides products and services to other businesses within the cannabis industry. As such, it is an ancillary sector business receiving revenue from multiple sources within the cannabis industry. Predominantly it operates in two main business units. These are Software & Services and Consumer Devices & Packaged Goods.
Examples of its offerings include "contract manufacturing of marijuana in a variety of form factors, vaporizer and inhalation devices, business and consumer delivery services and a broad suite of software products for over 1,500 retailers and brands throughout the US (across 40 US states), Canada, and Europe."
A company that garners revenue from multiple areas of an industry is an appealing play for investors. Reliance doesn't solely fall on one area to keep profits up; rather, the company can draw its success from the multiple successes of others. This diversity gives TILT stock one appeal. There is of course another.
Preliminary Q4 Results
As stated, TILT stock is on the climb significantly. The company announced preliminary and unaudited pro forma Q4 and fiscal 2018 results. It showed an impressive gross revenue of $31 million USD with 15% gross margins.
The audited version of these results is due on April 30th, but investors are already on board if TILT stock performance is anything to go by.
The company cites its revenue growth was driven by the continued growth of all the companies within TILT Holdings. Effectively, the business model it operates is proving effective and "TILT’s broad source of revenue now includes the sale of cannabis products, vaporizer devices, business, and consumer delivery and software and services," according to the press release.
Further, the businesses under TILT Holdings' umbrella are now working together or benefiting from integration. By sharing the same customer base and by selling a larger range of products, the business is spurring on business from within.
In the booming cannabis industry, ancillary companies can be overlooked—all eyes are on the cultivators and sellers. But liken it to the California gold rush of the mid-1800s. Mining for gold wasn't possible without a shovel or pick-ax. With everyone needing a tool to find the gold, the providers of shovels and pick-axes were the ones making a killing.
Cannabis is similar. The ancillary companies are very much a necessity for the success of those cultivating or selling. Therefore, demand for secondary services spike when a sector is booming... and this is a potential that investors shouldn't forget about.
What do you think of TILT stock? Is it on your radar?
Featured Image: DepositPhotos © jtanki03