Our Future Farm Technologies Stock Prediction in 2019 (Buy or Sell?)
When seeking investments in the booming marijuana industry, we’re especially drawn to what we call “cannabis adjacent” stocks. These are companies that don’t grow marijuana or develop cannabis-derived drugs, but instead provide a product or service to support the industry.
One such cannabis adjacent stock is Future Farm Technologies (CSE: FFT, OTC: FFRMF), a micro-cap firm. Below, we examine the company and make a prediction about the stock in 2019.
Typically, we love plays like Future Farm. We think of them as “infrastructure stocks.” Support services for growing industries can be very profitable. However (and pay careful attention) many of these stocks are penny stocks with low floats, low volume, and next to no revenue. They’re on the radar now simply because the cannabis sector is hot.
Future Farm is a penny stock and speculative. Is the stock’s growth potential worth the risk? Or should you run in the opposite direction? Let’s find out.
What Is Future Farm Technologies?
Canada-based Future Farm Technologies (market cap: $30 million) provides cannabis growing services and cultivates hemp.
Future Farm deploys controlled environment agriculture systems that are designed to use as little land, water and energy as possible.
Future Farm has designed a vertical farming solution that uses LED lighting. The company also produces cannabis oil and purified distillate.
How Has Future Farm Stock Performed?
What Is Future Farm Stock History?
- Over the past 12 months, FFRMF shares have fallen 59.9% whereas the S&P 500 has lost 1.96% (see chart).
How Has Future Farm Performed in 2017/2018?
- In 2017, FFRMF gained 318.4% whereas the S&P 500 gained 19.3%.
- In 2018, FFRMF lost 89.2% whereas the S&P 500 lost 6.9%.
Who Are Future Farm’s Rivals?
To make our FFRMF stock prediction, we must look at Future Farm’s competitors.
Scotts Miracle-Gro (NYSE: SMG)
Scotts Miracle-Gro (market cap: $4.1 billion) is famous for its lawn care products. Scotts offers products that include hydroponics, plant cultivation and plant nutrients through its Vermicrop Organics brand.
SMG also offers specialized lighting products through its Gavita Horticultural Lighting and Agrolux brands, and also sells filters, fans and accessories.
This lawn care juggernaut has made major investments in marijuana-based companies and poses significant competition to the smaller fry.
Notably, Scotts owns 80% of marijuana industry player Aerogrow International.
Aerogrow International (OTC: AERO)
Aerogrow (market cap: $81.7 million) operates in the hydroponics business. AERO’s major advantage: it has the deep-pocketed Scotts Miracle-Gro name behind it.
Aerogrow develops, markets and sells (both retail and wholesale) indoor garden systems. The firm uses proprietary seed kits to grow flowers and vegetables, targeting both experienced and amateur gardeners. The firm supplements its product line by selling support accessories, such as lights.
Hemp (OTC: HEMP)
Hemp (market cap: $21.8 million) focuses on end-user products in industrial processing, such as DrillWall to prevent drilling leaks in oil and gas operations; DrillWill which acts as a lubricating agent to prevent drill parts from sticking; and Spill-Be-Gone for emergency spills of toxic materials.
The company creates these various products by using the versatile organic properties of the hemp plant.
Will Future Farm Go Up in 2019 (Should You Buy?)
Make no mistake, Future Farm is a risky penny stock. The trick is to weigh the risks with potential rewards and see if the equation spells “buy.”
Is there any argument to be made on Future Farm’s behalf? Let’s give the stock a fair shot and emphasize the bull case.
Marijuana is all the rage right now. That means Future Farm’s name is getting out there and revenue is increasing. But the company reported a mere $6,427 in revenue on 2/29/16. That number increased to $186,723 the next year and hit $544,675 for the fiscal year ending 2/28/18. In its last two quarters, revenue was a combined $2,079,800.
Sure, revenue is growing. But Future Farm is losing millions of dollars. The net loss over the past 12 months was $13.7 million. The company has $5.3 million in cash and investments.
Here’s a video that offers details about the company’s technology (beware of hype).
Will FFRMF Go Down in 2019 (Should You Sell?)
Not only is Future Farm a penny stock, but it’s a particularly vulnerable penny stock that is losing money hand over fist.
As if that weren’t reason enough to avoid Future Farm, investors need to understand something else about the company. It doesn’t do anything special. It doesn’t solve a problem.
Those are the hallmarks of lasting businesses. They solve problems. They distinguish themselves from competitors.
Growing hemp and weed, squeezing oil out of plants — everybody does that now. This is a commoditized business in which companies with far more capital and resources are charging ahead into the newly legalized marijuana world.
Overall Future Farm Forecast and Prediction for 2019
We go out of our way to warn investors about penny stocks just like this. We know it’s tempting to jump in at only pennies per share, thinking there’s limited risk, but this stock could go to zero.
If you really want to invest in the marijuana sector, there are better places to look. There are cannabis companies that do make money and have capital, as well as a vision and management that can execute.
Future Farm is not one of them. By the end of 2019, many marijuana penny stocks won’t exist as industry-wide consolidation takes hold.
The marijuana industry will soon become a victim of its own success, as fly-by-night enterprises go belly up. If you want to make money in cannabis, you must stick to quality and shun money-losing companies. We’re about to see the classic boom-bust cycle in action.
So what is our Future Farm stock prediction for 2019? It’s entirely likely that shares will go to zero. FFRMF is junk. Stay away.