In a recent weekly report from SEDI, insiders at a handful of Canadian cannabis companies disclosed the sale of shares into the market for a cash-out.
Insider selling is often considered to be a bearish signal for companies. Since officers and directors of companies have the most complete picture of what is going on inside of their organization, their transactions in their own company’s stock become useful signals for traders and investors.
While two of these insider sales are nothing to worry about, one of them raises a red flag for sure…
AgraFlora Organics International Inc. (CSE:AGRA) (OTC:PUFXF)
On March 14th, AgraFlora Organics International Inc. Director Christopher Paul Homung sold off 150,000 shares of AGRA at a price of $0.53 CAD per share for an estimated cash-out of $79,500 CAD. Having been an Independent Director of AgraFlora Organics International Inc., formerly known as PUF Ventures, Inc., since 2014, Homung still has a whopping 3,707,825 shares. Chances are, Homung’s sale of shares isn’t a bad omen of things to come. After all, the company just acquired an additional 10% of the shares of cannabis flower and propagation market leader Propagation Services Canada Inc.
Lift & Co. Corp. (TSXV:LIFT) (OTC:LFCOF)
On March 18th, Lift & Co. Corp. Founder Tyler Sookochoff sold off 117,000 shares of LIFT at a price of $0.56 CAD per share for an estimated cash-out of $65,520 CAD. Having been with the company since its inception in November of 2013, Sookochoff still has 20,676,333 shares of Lift left to sell. Since the company just went public back in September 2018, there’s a high likelihood that Sookochoff’s sale was 100% benign. That being said, the company has been losing millions.
THC Biomed Intl Ltd. (CSE:THC) (OTC:THCBF)
Between March 11th and March 14th, THC Biomed Intl Ltd. Chief Financial Officer and Director Hee Jung Chun went on a selling spree, getting rid of a grand total of 810,000 shares of THC from $0.425 CAD per share down to $0.40 CAD per share. While the nine transactions only netted him roughly $326,050 CAD, it can never be a good sign when the CFO is dumping. Presumably, the CFO has the most up-to-date knowledge of the company’s financial condition. He still has over 17 million shares, but one look at a 1-year chart for shares of THC Biomed and you’ll see the general trajectory.
Conclusion
While insider transactions can oftentimes be a good indicator of what’s to come for a public company, it is never a sure signal. After all, insiders are people too. They’ve got bills to pay!
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