Two Rivers Water & Farming Doubles In Past Month

TM Editors' Note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

The drought continues in the Western states and we believe water will become an increasingly scarce and valuable resource going forward. It is the most fundamental necessity of life as we literally cannot live without it. Food prices have generally been on the rise over the past decade and this trend is likely to continue as the population swells and the amount of arable farm land remains constant or declines. Lastly, the cannabis industry is in its infancy and has huge growth ahead after several states have legalized the once demonized 'reefer madness.'

As an investor, how would you like to get exposure to all three of these sectors in one company? 

That company is Two Rivers Water & Farming (TURV). Being cautious of cannabis stocks, I set up a conference call with the CEO John McKowen. After a few conversations, I was convinced that this company was the real deal and I finally pulled the trigger and bought shares. On April 24th, I published an article titled "Food Water and Weed, Why I'm Bullish on Two Rivers Water and Farming." I made a bullish case for the stock and called out technical support at $0.50, suggesting the price could bounce in the near term.

The share price has since blasted higher from around $0.50 to over $1.00 today. We have more than doubled our investment in just over a month. 

GrowCo (majority-owned subsidiary of Two Rivers) has nearly completed construction of their first 91,000 sq ft greenhouse and 15,000 sq ft processing warehouse. Furthermore, they have already secured tenants for the project, which will be the largest modern cannabis greenhouse growing facility in Colorado.  The greenhouse has been leased to Suncanna, LLC, a newly formed Colorado limited liability company, whose principals have over twenty years experience in modern commercial greenhouse growing. As of June 4th, they have purchased their second greenhouse and plan to begin construction early this Fall.

two rivers growco

GrowCo expects to have a total of four greenhouses on its 160-acre tract of land in Pueblo County, Colorado within the next 18 months. When completed, GrowCo will lease to growers a total of 360,000 sq ft of greenhouse space and 60,000 sq ft of processing facilities.

GrowCo builds its greenhouses for $45 sq ft and leases its greenhouse systems for $20 sq ft annually.  When compared to converted warehouses, initial trials indicate growers will have the ability to grow up to 200% more product per square foot at half the cost.  The value proposition for licensed growers is a much lower cost per pound, for Two Rivers’ shareholders a significantly higher return on investment and for cannabis consumers a substantially lower cost, higher quality, naturally grown product.

The chart shows the incredible spike higher over the past month, breaking through both key moving averages. However, the RSI is now overbought and shares have hit resistance from July of last year. While we could see a continuation of the uptrend, new investors may want to wait for a pullback before establishing a position. Regardless, our long-term outlook is very bullish for the stock.

TURV Chart

 

I always like to take some profits off the table after such a huge run like this. When an investment doubles, I will often take 50% off the table and allow the remaining 50% to ride risk-free. But there are some short term catalysts that could cause the share price to continue higher. GrowCo will be a headline presenter at the 2015 World Cannabis Congress & Business Exposition in New York City from June 17th to the 19th.  They will also present at CannaCon in Denver  from June 11th to the 13th.

Bottom line? If you think water is becoming more valuable, that food prices will rise and that demand for high-tech, ultra-efficient cannabis greenhouses will continue to grow, you might want to look into Two Rivers Water & Farming. 

Disclosure: Long TURV.

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Angry Old Lady 7 years ago Member's comment

Thank you, I'm planning to do more research on this company. But do you have a larger version of the chart? My old eyes can't make it out.

Anastasija Janevska 7 years ago Member's comment

Thanks for putting this stock on my radar!

Yasmin S 7 years ago Member's comment

Very interesting, definitely considering looking into this!