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‘We pay taxes as if we’re dealing cocaine,’ Trulieve CEO says
Here is Verano’s store in NJ. People literally lined up into the woods. $VRNOF. Thanks Jeff Hoffman with Marathon Partners for the videos! pic.twitter.com/xwpKwVjgin
— Aaron Edelheit (@aaronvalue) April 21, 2022
Happy 420!!! Let the sales begin in New Jersey then New York. Verano sell some weed!!!
Will be selling products in New Jersey in 2 weeks only 7 out of 10 approved will get a good jump on sales
Verano Holdings (VRNO.C) opened its 42nd and 43rd MUV dispensaries in one of the fastest building counties in Florida this week.
Weed is such a bust nowadays that any kind of advantage a company can get is likely to be worthy of celebration, and getting brick and mortar stores open in an area that’s experienced some rapid growth may spell an increased client base for folks in Florida. Verano’s options can’t exactly be hurt by it.
The two new dispensaries are in Hillborough County, which is an area that’s seen some population development, including more than 200,000 new residents in the past ten years. The county now boasts over 1.4 million people, or six percent of the state’s total population.
“Hillsborough County has been home to MUV dispensaries since 2017, and over the last five years, we have witnessed Tampa and its surrounding communities exponentially grow, thrive and expand. We have listened to our patients and learned the lengths to which some travel to obtain their needed alternative medicine. With the opening of MUV Brandon and MUV New Tampa, we will be well positioned to provide the highest quality medical cannabis to the furthest reaches of the fourth largest county in the state,” said John Tipton, president of Verano.
If you’re unfamiliar, Verano is a vertically integrated United States multistate operator in the cannabis space. They produce premium cannabis products sold under a number of consumer brands including Verano(TM), Avexia(TM), Encore(TM), and MUV(TM). They’re spread out over 15 states, with active operations in 13 adn 12 production facilities with 1,000,000 square feet of cultivation space.
They’re getting their products out there on the net to give potential customers an online look at what they’re offering with hopes to drawing in actual people to their stores. They offer free one-on-one virtual and in-store consultations with a product selection that includes edibles, chocolates, lozenges, flower, pre-rolls and vape pens, concentrates metered-dose inhalers, topical sand oral sprays. There’s also encapsulation formations like their EnCaps capsules, tinctures, 72-hour transdermal patches and gels.
COVERAGE INITIATED with $26/share price target - Needham Brokers...
Cannabis Stocks Are Beaten Down: Verano Is The Best Cannabis Stock To Buy Now
Feb. 05, 2022 9:36 AMCNBS, CRLBF, CURLF
Summary
Cannabis stocks have fallen more than 50% despite generating triple-digit growth over the past year.
Cannabis, once associated with the likes of heroin and cocaine, is now being sought for its medical benefits and abilities to generate taxes and new jobs.
I discuss the ways to invest in the cannabis sector, including an overview of the top operators.
I reveal my top pick in the sector, one with the best limited license footprint.
Addiction to Marijuana
bestdesigns/iStock via Getty Images
Amidst a deflation in tech valuations, you might have missed the beat down that has taken place in the cannabis sector. Many cannabis stocks were trading at reasonable valuations at recent highs and have reported significant fundamental growth, but have nonetheless seen their stock prices drop more than 50%. The poor stock price performances are primarily due to the inability of institutional capital to invest in the sector, something not in their control. Individual investors are not restricted by such mandates and can take advantage of this prolonged buying opportunity. I discuss a couple of the top operators and reveal my favorite name.
Cannabis Stocks Have Crashed
Since the highs reached in 2021, the stocks of US cannabis operators have fallen more than 50%.
Many of these names were trading at reasonable valuations relative to their growth rates prior to the drop. Between then and now, these companies have reported triple-digit growth, such that the stock price declines have led to a complete reset in valuation multiples.
All of the above operators are expected to sustain strong growth over the coming years as more states legalize cannabis for recreational sales. These names trade at between 5x to 9x 2023e EBITDA, surprisingly cheap multiples for stocks that should be garnering tech-like valuations.
The Cannabis Investment Thesis
Support for cannabis legalization has become a bipartisan issue with nearly 70%.
I view legalization as being inevitable. There are three main reasons for that. First, the War on Drugs has disproportionately affected minorities, including Black Americans.
The War on Drugs
Green Thumb Investor Presentation
Second, even though cannabis is illegal on the federal side, the illicit market remains strong and thriving nationwide. This has meant that legalizing cannabis on a state-by-state basis has led to substantial tax revenue and job creation.
cannabis taxes and jobs
Green Thumb Investor Presentation
Finally, cannabis itself is not the dangerous drug that it has been made out to be. When the average person thinks of cannabis, they might associate it with the likes of cocaine and heroin (actually, cannabis is considered to be more dangerous than cocaine by the federal government). In reality, cannabis is arguably safer than alcohol and opioids. Alcohol use has led to nearly 100,000 deaths annually and opioid deaths totaled over 75,000 annually. In contrast, there are no documented cases of deaths from cannabis overdose. Furthering the contradiction, cannabis has been discovered to have numerous medical benefits, addressing issues ranging from chronic pain, anxiety, insomnia, and sexual wellness. The growth of cannabis is like the growth of e-commerce or the growth of video streaming. It's inevitable.
Now let's discuss the investment thesis. While the US federal government has deemed cannabis to be an illegal substance, many states have already legalized the plant for medical or recreational uses. US cannabis companies have seen substantial growth from ongoing legalization efforts. Some companies have focused on states which use a "limited license model" because of the higher profit margins achievable from the exclusivity. The growth is substantial because, as discussed previously, illicit markets exist even without legal markets. Cannabis companies are able to generate strong growth just by taking market share from the illicit market. We can see below that even in states which have legalized cannabis for recreational use, the illicit market still remains very strong.
illicit vs legal markets
Curaleaf Investor Presentation
The strong illicit market suggests low hanging fruit for ongoing growth. Over time, cannabis is estimated to be a $100 billion industry, rivaling the beer and tobacco markets.
cannabis addressable market
Green Thumb Investor Presentation
The longer-term opportunity is even greater. About 20% or less of adults use cannabis regularly. In contrast, nearly 70% of adults regularly consume alcohol. Considering that cannabis is safer than alcohol and has far ranging medical uses, I expect cannabis use to become more "normalized" as the plant becomes more generally accepted. Cannabis has been illegal for a long time - so long that it has gained a negative stigma. The times are changing, and the growth of cannabis can not be stopped.
The Top Cannabis Operators
I now discuss some of the top operators in the sector. Before I do so, I first point out that there are various exchange traded funds carrying cannabis stocks, including MSOS, CNBS, YOLO, and MJUS. These ETFs vary in sector and country concentration and own the US operators only through total return swaps. The last point is due to the fact that US cannabis stocks are not allowed to trade on major exchanges and thus only trade over the counter ('OTC') - this is because of the federal illegality of cannabis. Many brokerage firms like JPMorgan Chase currently heavily discourage investors to invest in these names. That said, many do allow investing in these names. I have found that the stocks trade with slightly less liquidity than typical stocks, but the experience is otherwise no different.
Let's now discuss some of the top operators in the sector. I quickly note that Canopy Growth (CGC) and Tilray (TLRY), two popular Canadian names in the sector, are not in this list as the most attractive opportunity is in the United States.
Green Thumb Industries (OTCQX:GTBIF) is often considered the top operator in the sector. This is because the company has pursued a wide footprint with a careful eye on profitability.
GTBIF footprint
Green Thumb Investor Presentation
GTBIF is arguably the most strategic operator and is often located in attractive markets long before recreational sales are legalized. With such a long track record of such success, there is clearly more than luck at play here.
Cresco Labs (OTCQX:CRLBF) is another Tier 1 operator with a wide footprint.
CRBLF footprint
Cresco Labs Investor Presentation
Unlike others on this list, CRLBF has intentionally focused on its wholesale business, which makes up more than 50% of total revenues. CRLBF believes that wholesale margins will prove to be the most resilient over time.
wholesale margins
Cresco Labs Investor Presentation
Curaleaf (OTCPK:CURLF) historically has been the biggest operator in the sector. CURLF is the only operator with a coast-to-coast footprint.
CURLF footprint
Curaleaf Investor Presentation
CURLF management had the conviction to aggressively acquire assets long before valuations have steadily risen. CURLF has recently been the first multi-state operator ('MSO') to enter Europe with its acquisition of EMMAC.
EMMAC Acquisition
Curaleaf Investor Presentation
Trulieve (OTCQX:TCNNF) is the last of the original "Big 4" operators.
TCNNF footprint
Trulieve Investor Presentation
The company is best known for its dominance in Florida, where it owns around 50% of the market. I note that the company has since increased its store count to 111 dispensaries in the state.
Florida footprint
Trulieve Investor Presentation
TCNNF has historically been known as the most profitable company in the sector.
sector profit margins
Cannabis Growth Portfolio
Profitability is important to discuss because US cannabis companies face unusual challenges stemming from the illegality of cannabis. US cannabis companies lack equal access to banking, which means that they often pay 10+% interest rates on debt in spite of strong fundamentals. They also are restricted from deducting operating expenses (like rent, interest expenses, corporate expenses) from taxable income, meaning that they pay excessively high tax rates (known as '280e taxes'), sometimes paying taxes even with negative operating income. TCNNF has nonetheless been able to generate significant GAAP net income, totaling $18.6 million as of the latest quarter (the company has a $4 billion market cap). When cannabis is decriminalized, net income will jump across the sector due to resolution of the above factors. For reference, TCNNF might see quarterly net income jump 160% to $50 million just from normalizing tax rates and interest rates alone.
The Best Cannabis Stock To Buy Now
My top pick of 2022 is Verano (OTCQX:VRNOF). VRNOF has a wide footprint which was made larger after its recently announced acquisition of Goodness Growth (OTCQX:GDNSF).
VRNOF footprint
Verano Investor Presentation
The acquisition of GDNSF gave it 1 of 2 licenses in Minnesota, but the key gem was its license in New York. New York is estimated to be a near $3 billion market by 2026.
New York market
Goodness Growth Investor Presentation
Besides New York, VRNOF has strategically positioned itself in all of the important limited license states. Recall that the limited-license model has allowed for higher profit margins due to the inherent cap on competition. VRNOF's core markets are in Illinois and Florida. The main near-term growth driver for VRNOF is the state of New Jersey, which is anticipated to come online for recreational sales sometime in 2022.
Verano state markets
Verano Investor Presentation
In comparison with peers, VRNOF has best in class margins due to its focus on premium products and its lean cost structure.
Verano profit margins
Verano Investor Presentation
VRNOF trades at around 2.5x 2023e sales and 6x 2023e EBITDA. The stock trades at a notable discount to GTBIF and CURLF, but arguably should trade at a premium due to its positioning in the most attractive limited license states. I can see VRNOF trading up at least 100% over the next year, but that would still place it at highly attractive multiples of 5x 2023e sales and 12x 2023e EBITDA.
Risks
The main risk regarding cannabis stocks is that of uncertainty. There's great uncertainty as to when legislative reform will take place (though I discuss why it may not matter in the conclusion). There's also uncertainty as to how interstate commerce (allowing sale of cannabis across state lines) will affect the profitability of limited license states. There's the view that passage of interstate commerce might cause prices to fall across the country, as cannabis can be grown at much lower prices in regions like California. My personal view is that interstate commerce will not occur for a very long time as I do not anticipate such broad federal reform coming ahead of reform at the state level. It seems unlikely that the federal government will be able to disrupt as many as 50 different local cannabis economies and systems, as such a reform stands to benefit very few and thus is unlikely to be a popular issue among either voters or politicians. The most relevant risk is the constraints that 280e taxes and high costs of capital have placed on US companies' cash flows. It's very difficult for these companies to generate positive cash flows - though not impossible as we have seen in the case of TCNNF and VRNOF above. I'm not worried about this risk because the top operators have prudently raised sufficient cash to their balance sheets, have demonstrated improved access to debt capital as compared to past years, and have in general made significant progress toward optimizing cash flows in spite of the difficult regulatory environment.
Bottom Line
Cannabis stocks have been beaten down over the past year as investors became pessimistic for the prospects of near-term legalization. The irony is that the top operators have been able to grow rapidly without legalization, or perhaps, due to the lack of legalization. The presence of 280e taxes and limited access to banking has made it difficult for smaller operators to compete with the larger operators. The top operators benefit from delayed legalization because they get more time to build dominant market positions in the meantime. Legalization is inevitable, but any delays may lead to greater value creation over the long term. I have discussed the top operators with VRNOF being my top pick to take advantage of this promising growth sector.
Might be everyone is still down like me. Glad 2021 almost gone.
Up 10.15% today and no one is here, lol
FYI:
Bearing that in mind, there are plenty of options for those willing to shoulder the risk. We used TipRanks’ database to take a closer look at three cannabis stocks backed by Wall Street analysts. Not only all of the names have received enough support to earn a “Strong Buy” consensus rating, but each also boasts some brag-worthy upside potential. Here are the details.
Verano Holdings (VRNOF)
First up on the list is Verano Holdings, a $1.69 billion company based in Chicago. The company is a major producer in the US cannabis market. The company has 11 cultivation and production facilities, providing cannabis products for 87 operating retail locations. Verano sells its cannabis products subject to state regulations under four brand names. Its production facilities boast over 830,000 square feet of growing space.
Verano has been working steadily to expand its footprint, and in October and November it opened two new dispensaries – featuring its Zen Leaf brand – in St. Charles, Illinois and in Las Vegas, Nevada. In addition, the company announced on November 10 that it will be entering the Connecticut cannabis market.
The company will report 3Q21 earnings on November 16, but a look back at Q2 can give us a sense of where Verano stands. Revenues reached $199 million in that quarter, up 39% sequentially and a whopping 164% year-over-year. The quarter was a company record. After the second quarter ended, the company announced an upsize to its existing credit facility, boosting the total available to $250 million. The interest rate is 8.5%, and the agreement includes an additional $100 million on option. The upsized credit is a major increase in Verano’s available liquidity.
Analyst Scott Fortune, from Roth Capital, sees Verano as a compelling buy, especially after the stock’s share price has fallen over the past several months.
“We believe VRNO is overdue for a significant rerating after the share lockup overhang and improved share liquidity similar to the top MSOs... With shares trading [~46%] off its 52-week high, VRNO presents a compelling valuation opportunity at these levels and remains our favorite MSO name with the largest potential appreciation upside from strong fundamentals and ahead of potential incremental federal legislation,” Fortune noted.
To this the Roth Capital analyst gives the stock a Buy rating, and his $32 price target implies a one-year upside of ~131%. (To watch Fortune’s track record, click here)
Overall, Verano’s Strong Buy consensus rating reflects a unanimous approval from Wall Street, with recent 4 positive reviews. The shares are priced at $13.86 and the $32.10 average price target matches Roth Capital's. (See Verano stock analysis on TipRanks)
Nice chart
VRNOF
Fins on Tuesday 15$ or 20$ after up from here nobody seeing before that
Glad to see the end of the day slaps. I turned some paperwork in on my fidelity and they have had my account locked for 7 days.
Verano Opens New Zen Leaf™ Dispensary with Drive-Through on Vibrant Flamingo Road in Las Vegas
10/28/2021 | 07:30am
Zen Leaf Flamingo is Verano’s third dispensary in Las Vegas and its 87th1 nationwide.
The new storefront sits just two miles west of Las Vegas Boulevard, the primary draw for over 40 million visitors2 in pre-pandemic 2019 and features a drive-through for recreational consumers seeking on-the-go convenience.
Zen Leaf Flamingo is located on the high-traffic retail corridor of Flamingo Road, which saw average daily traffic3 of 35,000 in 2020, and 51,000 in pre-pandemic 2019.
CHICAGO, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) (“Verano” or the “Company”), a leading multi-state cannabis company, today announced the opening of Zen Leaf Flamingo, a new adult-use dispensary located at 5940 West Flamingo Road in Las Vegas, Nevada. The grand opening event is set to begin on Friday, October 29, at 7:00 AM local time.
Zen Leaf Flamingo is located in Spring Valley, a Las Vegas suburb just west of The Strip. The area boasts award-winning eateries in a more accessible setting, just two miles from Las Vegas Boulevard.
“Convenience is always a priority for us at retail, particularly in a high-volume destination like Las Vegas,” said George Archos, Verano Founder and Chief Executive Officer. “Our team’s ability to maintain customer intimacy while providing an efficient, consumer-friendly experience is one of the things that sets Zen Leaf apart. The drive-through platform on Flamingo Road offers distinct benefits to both visiting shoppers and Las Vegas residents.”
Nevada has seen continued growth in the form of record cannabis sales this year, despite the protracted pandemic environment. According to the Nevada Department of Taxation, adult-use cannabis sales have surpassed $1 billion, already up $330 million from 2020’s previous record in sales.
What in the Wild Wild World of Sports is a Goin' on with U.S Cannabis?
The growing pains for the Great American Growth Engine continue
Todd Harrison
5 hr ago
It’s been a nutty year for cannabis stocks…
…as pandemic-related fiscal and monetary policies helped fuel superior returns across asset classes of all shapes and sizes. Crypto is going nuts; real estate is off the charts; heck, even trading cards have caught a bid. And stocks? Yep, quite the equity orgy…
…except for that red mess at the bottom of the chart, which also happens to be the one sector that I’ve bet the entirety of my future financial fate on.
But why? That’s the burning question racing through so many of our minds almost nine months after U.S Cannabis ETF $MSOS ticked north of double-nickels.
A few months ago, we asked, Is U.S cannabis a Value-Trap and we tried to poke holes in our base call bull thesis. We talked about interstate commerce, the FDA, Big Canna and over-taxation while noting how things could get bumpy given the space had lost it’s technical metric. And so they did, get bumpy I’m sayin’. So, now what?
It’s odd, to say the least, that the fastest growing industry and jobs creator in America isn’t participating in the Everything Rally, especially given the mind-blowing growth @ value multiples that we’ve so-often detailed in this space.
Some blame the banks for shutting down custody / clearing operations for cannabis-related securities. Others blame politicians, whether it’s the President for turning his back on campaign promises, or those in Congress for all of their political posturing that’s thus-far yielded zero progress. Still others blame the algos for their constant feasting on low-liquidity / retail-rich prey, or the pervasive / abusive naked-shorting.
The truth is, it doesn’t really matter; it was likely a combination of all of those things, with the added weight of any number of culprits: a relative slowdown / normalization in 2H21 growth post-COVID-induced pantry stuffing; the still-sticky illicit market; slower-than-expected state roll-outs (NJ, NY); tax-selling (to offset other capital gains); and, of course, the growing sense that cannabis legislation is dead at the federal level and that, and that alone, will dictate the fate of the U.S cannabis sector.
[SAFE Banking is in the current House version of the NDAA with the Senate expected to pick it up the first week of November. While those in the know have made educated / lucid arguments as to why this won’t make it through the Senate, there are some who believe the GOP will engage in political calculous / support the measure / attempt to force Schumer to publicly remove it, which would be thorny for obvious reasons]
[^ I’m 50/50 on SAFE via NDAA by year-end but my optimism is an outlier and unless capital market protections are added along the way, the current / boilerplate language would simply trigger FINCen / AML guidance to update, which would be a second-derivative / incremental positive step toward the eventual U.S up-listing.]
I will also / again note most U.S cannabis stocks had MASSIVE runs from March 2020 lows to February 2021 —TerrAscend ($TRSSF) +1250%, Green Thumb (GTBIF) +885%, Trulieve ($TCNNF) +830% to name a few—and a cyclical bear market within a multi-year secular bull market is not only normal and natural but also quite healthy. Like a forest fire, it’s scary, dangerous and ultimately necessary for a fertile rebirthing.
[TerrAscend lost 66% since Feb but is still +355% vs. March 2020; Green Thumb, -40% since Feb, is still up 530% since March 2020; Trulieve, -50% / +376%. Timing is everything, as we know, but this is more about looking forward than looking back]
It’s not like the thesis has changed. The state-led fundamental story remains strong to quite strong, even if every / this quarter won’t blow out expectations bc growth will be lumpy as the industry lurches forward and regulators / agencies try to feel their way through the new frontier. But the opportunity is real; I mean, even Cantor sees it…
…and credit conditions continues to trend better, as evidenced by Verano’s scoop of $250M non-dilutive paper last week @ 8.5% (+$100M in their back pocket). And yes, 8.5% is a ridiculously high cost of capital in the real world, which speaks to the broader rerating that awaits the space when the playing field eventually evens.
I mean, even the IRS is lobbying for SAFE Banking…
…joining a growing list of signs of normalization seemingly surrounding society.
But don’t tell that to investors, who are sullen and salty after not only losing money in cannabis stocks but also the opportunity cost associated with being in cannabis stocks rather than idk, anything else. Ask me how I know?
Meanwhile, some of the smartest investors I know are planting their US canna flag…
…anyone who’s been around the block a few times knows how multi-baggers work…
…and, as the rest of the world inflates and tech valuations fly sky high…
…U.S cannabis is trading back at levels last seen last November. I won’t say there isn’t risk—US canna is down 23% YTD despite the rising tide; what happens when the tide recedes?—but I will say that in my 31 years of watching tapes and surfing cycles, I’ve never seen more compelling, asymmetric opportunities than we’re seeing now.
[most investors can’t play the U.S space given the litany of custody restrictions and those who can, let’s be honest, why would they venture into the pink-sheets / CSE when they can’t buy Tesla, Bitcoin or Amazon? The buyers are higher, this much I know, and when they finally come for these names, they’re gonna come big]
And one more thing, my grandfather Ruby taught me that all a man has is his name and his word and I’ve spent my life honoring his legacy / staying true to his lessons.
So when peeps on Twitter call me a paid pumper…
…I’m super aware that my name / word are draped all over this company, which is why I’m more than happy to share the who, what, how and when behind the why we built Verano into a top holding. I didn’t have to write / share any of it either but did so for a few reasons, one of which is that I’m pretty sure George and his team will reflect well.
If you believe that an efficient market will eventually reprice U.S cannabis, I’m not sure there’s a better single-stock vehicle than a US canna FAANG that is 1/2-off vs. a peer-group that is already trading 80% below the S&P growth multiple. Do the math in your head if you like, I know I do almost every day.
Just do me a favor: remind yourself this is a movie, not a snapshot. I don’t wanna be judged on this observation tomorrow or next week bc tbh idk on the timing. But I do believe Verano will eventually trade par and when it does, we’ll think back to the last few months of 2021 when any one of us could pick up the shares for ~$11 each.
At that point, let’s remember how we felt right now; our mood, our mindset…
…and let’s take a moment now to remind ourselves that the purpose of the journey is the journey itself, and we should be good to others and better to ourselves.
May peace be with you.
/position in stocks mentioned
/advisor $MSOS, $VRNOF
AFC Gamma Funds $50 Million as Part of a New $120 Million Tranche of Verano Holdings Corp. Credit Facility
10/20/2021 | 08:44am
WEST PALM BEACH, Fla., Oct. 20, 2021 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) today announced it has funded $50 million of a $120 million credit facility tranche to Verano Holdings Corp. (CSE:VRNO) (OTCQX:VRNOF) (“Verano”), a leading multi-state operator with active operations in 11 states, including 11 production facilities. The credit facility has been increased by a $120 million tranche and is designed to provide Verano with additional capital to execute on its growth plan.
“We believe that Verano is one of the top multi-state Cannabis operators, continually proving its industry leadership through strong execution and meaningful growth, both organically and through strategic acquisitions. Driven by its strong brand recognition, real estate ownership, business execution and experienced management, we believe that Verano is a top-tier credit,” said Leonard M. Tannenbaum, AFC Gamma’s Chief Executive Officer. “We are proud to partner with Verano to catalyze their next phase of growth.”
“We are pleased to expand our relationship with AFC Gamma as a cornerstone lender. We believe our improved cost of capital and ability to attract high-caliber institutional lenders like AFC Gamma is a testament to Verano’s continued growth, performance and position in the marketplace,” said George Archos, Verano Founder and CEO. He added, “We appreciate AFC Gamma’s partnership as we continue to expand and enhance our business.”
With its commitment of an additional $50 million under the new credit facility tranche, AFC Gamma now holds a total of $60 million of Verano’s credit facility.
SAN FRANCISCO, Oct. 19, 2021 /PRNewswire/ -- StandardC, Inc., a leading FinTech focused on Marijuana Related Business (MRB) banking compliance, announced that its growing network now has the capacity to serve over 1,500 CRBs and accept deposits of over $1.3 billion.
Despite delays by the United States Congress to pass cannabis banking reforms and broader legislation for marijuana legalization, most notably the SAFE Banking Act and the Cannabis Administration and Opportunity Act, numerous banks and credit unions are stepping in.
Robert Mann, CEO of StandardC, commented, "While Congress deliberates, our network of federally insured financial institutions are taking action to solve the problems faced by the cannabis industry. They deserve access to banking, and they no longer have to wait for the government to act."
While cannabis (aka marijuana) remains restricted under the Controlled Substances Act (CSA), The Financial Crimes Enforcement Network (FinCEN), who enforces the Bank Secrecy Act (BSA) and its Anti-Money Laundering (AML) requirements, issued guidance (FIN-2014-G001) in 2014 that "…clarifies how financial institutions can provide services to marijuana-related businesses consistent with their BSA obligations."
Robert Baron, the Chief Experience Officer of StandardC, and a leading cannabis banking expert and Certified Anti-Money Laundering Specialist (CAMS, CAMS-RM), noted that this guidance provides a framework that is utilized by StandardC and its member banks and credit unions to solve the lack of access to banking. Mr. Baron noted that "While the largest banks sit out on the sidelines, we are solving the banking crisis by deploying proven technology and expertise to enable bankers to meet the needs of the cannabis industry."
About StandardC
StandardC enables, facilitates, and supports banking, lending, payments, insurance, payroll, and armored transport in a compliant cannabis ecosystem and simplifies cannabis-related business development, initial and ongoing due diligence, transaction, and Customer Relation Management (CRM) for enterprise and the entire cannabis ecosystem.
Maybe 2 weeks before earnings this will drift up. I bet a 6 to 10 dollars pop after nov 15
Consolidation phase once they can take there money out of the ground and put it in banks you will see how much money these guys are making good luck to all in this stock at this level going to be a good ride
Mitch ughh I'm buying Verano Holdings!
Nice day. Better week next week. Let's go Verano! We trading pe 40 w banking remedy on it's way not to mention growth. I bought more here today.
FYI:
Verano Holdings Has Closed 10 Cannabis Acquisitions This Year and Is Looking for More
Exclusive article by Carrie Pallardy
Exclusive Interview with Verano Holdings Co-Founder, Chairman and CEO George Archos
Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) Co-Founder, Chairman and CEO George Archos last spoke with New Cannabis Ventures in March, shortly after the company’s public debut. The company went public to more easily pursue M&A, and Verano has been on an acquisitive streak. Archos shared an inside look at the company’s acquisitions, organic growth and funding. The audio of the entire conversation is available at the end of this written summary.
New Talent and Promoting from Within
The company’s flurry of M&A activity means that it has brought new talent onboard. With the closing of deals, Verano has added people to its marketing and operations teams. The company has also internal talent take on bigger roles. For example, Aaron Miles stepped into the Chief Investment Officer position, with Julianna Paterra taking charge of investor relations.
Verano Team Members at a New Jersey Dispensary
Integrating Assets in Pennsylvania
Verano has pursued acquisitions in Pennsylvania and, now, it is integrating its assets in the state. The company has 12 stores open and another six expected to be open by this time next year, according to Archos. The company closed on a facility for cultivation and processing, and in anticipation of adult use in the state, it is about to begin construction on a second cultivation site in Pennsylvania. Archos is bullish on the company’s position in Pennsylvania and sees parallels between that state and Verano’s home state of Illinois. Both markets have large populations and strong medical programs; Illinois has launched adult use and that is on the horizon for Pennsylvania.
The Interior of One of Verano’s Illinois Dispensaries
The Sierra Well Deal in Nevada
Nevada is a legacy market for Verano. It has two stores open and a third flagship store opening within the next month. The company is also expanding its cultivation operations in the state. Verano wanted to add more retail to its footprint here, and the pending Sierra Well deal will deliver. The acquisition, expected to close at the end of the year, adds dispensaries in two new cities for Verano: Reno and Carson City. In addition to these two dispensaries, the deal comes with a 10,000-square-foot cultivation and production facility.
Nevada is a mature market and the company is comfortable with its position there, according to Archos. Verano has additional space to expand at its facility if needed and a strong retail footprint with the Sierra Well deal. But, it may pursue additional activity in the state in the future, according to Archos.
Continued M&A
The Verano team takes an open approach to considering M&A, looking at all of the deals that come across their desks. When it comes to selecting the deals to pursue, the company aims to find like-minded entrepreneurs who have built strong businesses that are ready to bolt onto the Verano platform. When the team does find a deal that makes sense, they move quickly, according to Archos. The company has closed 10 of 11 deals announced this year, with the Sierra Well deal expected to close shortly, according to Archos.
Organic Opportunities
While M&A is helping to fuel Verano’s growth, the company also has organic growth opportunities. New Jersey is expected to launch adult-use soon, and Archos pointed to the possibility of adult-use transitions in Florida, Ohio and Maryland sometime in the next 24 months. Additionally, the company has cultivation operations coming online in Massachusetts soon, which will give it vertical operations in the state.
While federal legalization is anticipated at some point in the future, it is not a focus for Verano. Right now, the company’s team is focused on state-by-state operations.
Going Public and Funding Position
Verano went public in February, later than many of its peers in the cannabis industry. That move had both disadvantages and advantages, according to Archos. One on hand, Verano does not have as much market visibility. As a new entrant into the public market, many investors do not realize that Verano started in 2014, around the same time as many of its public peers. The team is working to demonstrate the company’s growth and help investors get to know the company.
On the upside, waiting to make its public debut has helped Verano to avoid some of the mistakes made by earlier entrants to the public markets, according to Archos. Plus, going public has helped the company to pursue M&A.
The company borrowed $100 million in May. Currently, Verano owns the majority of its real estate, and it is a cash flow-positive company. The company funds its CapEx with internal cash flow. If it needs additional capital, it is in the position to go to the debt markets to access fairly low-cost capital, according to Archos. The company is not currently looking for dilution, so debt would be its best option.
Archos and his team have built strong connections in the investor community. While the COVID-19 pandemic has made it difficult to travel and foster in-person relationships, the Verano team moves forward in a digital world. The company has brought in private family offices and institutional investors that support Verano’s long-term play, according to Archos.
Growth Trajectory
Verano reported $143 million in Q1 revenue and $199 million in Q2 revenue. The potential for adult use in a number of the company’s markets, like New Jersey, holds the promise of continued growth. The company continues to open retail locations, and it has cultivation expansion coming online.
While Verano is ready for adult use in a number of its markets, regulatory delays come with the territory. The team can’t control when those transitions will happen, but it is getting ready to take advantage of the opportunity whenever it arrives.
Smart minds.
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We met again JohnCM
It was awesomeness Zeus!..
VRNOF$
Well I'm locked in all these setups
Everybody seems too cruel
I can't tell who's who
Without a bag of voodoo
Pirate love
Only the beginning but anywhere’s in this range close your eyes for 3 months and you will be happy. 1150 gobble them up
Bottom in I’m making money good luck to all that found the bottom
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