HYFM's CEO, Bill Toler, recently purchased an additional 25,000 shares, and now owns over 1.6 million shares.
Toler, who has a history of turning around companies, such as Hostess Brands, has far better knowledge than the market as to the company's prospects, and has a substantial, and increasing, stake in Hydrofarm.
Although HYFM is not now cash flow positive, that is true of most companies in the cannabis space.
However, it is reasonable to assume, as has Toler, that cannabis sales will increase, and companies such as HYFM will again become cash flow positive, due to more marijuana being grown as a result of changing demographics and permissive legislation.
In recessions, sin stocks tend to go way up. So if history is any guide, and we go into a recession, I expect people to smoke more pot, and the share price of HYFM to increase substantially from the current depressed levels.
Marijuana is the elephant in the room for all hydroponics companies such as HYFM.
Although CEA is a promising industry, it is the hydroponic growing of marijuana that will fuel HYFM's future growth.
While there is a glut of marijuana in many markets, especially California, when this is burned off (pun intended), more marijuana will be grown, and much more hydroponics equipment and supplies will be needed to grow it hydroponically.
As a very large purveyor of hydroponics equipment and supplies, Hydrofarm's sales should increase dramatically in the coming quarters and years that make today's share price a bargain at today's fire sale price, in my opinion.
On August 28, 2018, the Company entered into a Subscription Agreement with Hydrofarm Holdings Group, Inc. (“Hydrofarm”), one of the leading independent providers of hydroponic products in North America, pursuant to which the Company agreed to purchase from Hydrofarm and Hydrofarm agreed to sell to the Company 2,000,000 Units, each Unit consisting of one share of common stock and one warrant to purchase one-half of a share of common stock for an initial exercise price of $5.00 per share, for $2.50 per unit for an aggregate purchase price of $5.00 million. The $5.00 million investment in Hydrofarm was recorded at cost and is included in Investments on the unaudited consolidated balance sheet as of September 30, 2020.
TRTC has option to add 10 to 15 million more shares of HYFM!