Making Marijuana Millionaires
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I spoke with a former top small-cap manager who is currently managing his own money. He said, "It's all about free cash flow. Once 280E goes away, I'm calling all my institutional relationships and saying it's time. This goes from a trade, to a 3-5 year hold and there's an…
— Jesse Redmond (@jesseredmond) May 9, 2024
Thanks for posting all those nuggets
AGP on 🇺🇸 #cannabis 🌿
— Todd Harrison (@todd_harrison) February 21, 2024
'DEA proposed rules, which we expect to be in-line with HHS' Schedule 3 recommendation, potentially coming any day (we continue to point to end of 1Q24)' pic.twitter.com/oaz2kX0koA
$MSOS Cannabis ETF 🇺🇸
— Chris (@c2412345) February 21, 2024
Pretty sure those UOA Call Options Activity for March 2024 is a bet we get DEA Schedule 3 news before State of the Union March 7 🔮$CURLF $GTBIF $TCNNF $AYRWF $MSOX $TLRY $CGC 🚀$SPY $QQQ $IWM $TSLA $AAPL $AMZN $GOOG $MSFT $META $BTC $MARA $NVDA $SMCI https://t.co/kxXMnHWnrx pic.twitter.com/v7yaOOV7Qp
Good News! #SAFEBanking is moving ahead in spite of the nonsense. We could have had success sooner rather than later. Things are looking up. Have a great weekend. pic.twitter.com/c8TtOU5Wwj
— Don Murphy (@donmurphy12a) February 15, 2024
It was a Valentine's Day massacre in $MJUS yesterday (2/14) as the rebalancing continues (adjustments exacerbated by $MJ selling):
— Boldux (@boldux) February 15, 2024
+21% $GTBIF position
-42% $TCNNF position
-29% $AYRWF position
-28% $TSNDF position
...and more#MSOGang #potstocks $MSOShttps://t.co/r6g5BrFF8f pic.twitter.com/OYcSxDLcKk
Maybe is this whack jobs post? Although of course we all agree with her on this topic
It is time for our federal government to join the 21st century and legalize marijuana.
— Elizabeth Warren (@ewarren) February 12, 2024
Wow great day !!! Is this from the MSOS Robinhood 24 hour market addition
Here is an AMA from reddit on this subject
I'm Matt Zorn - The Lawyer That Sues the Government and Wins. Ask Me Anything. (Join me 2/1/24 @ 1:00pm ET)
https://www.reddit.com/r/weedstocks/comments/1afpivs/im_matt_zorn_the_lawyer_that_sues_the_government/
👀 Source out of Washington D.C. says marijuana rescheduling is "imminent." 👀$MSOS $MSOX #Cannabis #CannabisIndustry https://t.co/jYXCpaRFR8
— The Dank Informer (@TheDankInformer) January 31, 2024
$MSOS USA Cannabis ETF 🇺🇸 Trending #1 on r/WallStreetBets and Stocktwits 🤫
— Chris (@c2412345) January 13, 2024
DEA (Drug Enforcement Agency) Schedule 3 soon? 🚀@ChartGuys @TheDalesReport @stock_mj @V_arrell @sammyj_19 @jesseredmond @junglejava1 @S_Andreoni @todd_harrison @WeedStreet420 @ShardiB2 @Maximus_Holla https://t.co/qXqJVI1PqK pic.twitter.com/s9sicIWZsC
https://www.reddit.com/r/weedstocks/comments/16rsg8q/detailed_micro_charts_for_msoslps_msos_by_atb/
Whats interesting about this report is MSO are up 116% price wise but volume increased only 6.7%...Imagine when we get reasonable interest rates and 280e tax burden removed,,, Positive news will certainly push up price
Very encouraging to hear SHWZ is doing some form of outward communication. Also to note on the positive side #SAFEBANKING is trending on twitter today following many days in the last few weeks.
Welcome to the most significant two weeks in the history of federal #cannabis policy reform!
— Don Murphy (@donmurphy12a) September 18, 2023
This Wed. we have a vote on the #CUREact in the GOP-led House and next Wed. a DEM-led Senate Cmte. will pass #SAFEBanking.
Join me on TDR to talk all about it this Thursday at 8pm. https://t.co/7IXvtPQ959
Well said ,,, the future of Shwz potential is still being shaped by the company and Not the likes of Alan Brochstein . When not if Rescheduling and Safe will pass we will start to see that future potential develop into a Great Investment
Theres not much to say in my opinion, so just posting links till sentiment returns
https://www.marijuanamoment.net/senate-committee-chair-plans-marijuana-banking-vote-announcement-in-next-few-days-but-outlying-issues-remain/
DEA to respond to @HHSGov in 90-Days (November 2023) - Echelon Wealth Partners 🤫
— Chris (@c2412345) September 1, 2023
+SAFE Banking in Sept / Oct 2023 via @Boris_Jordan @ChartGuys @stock_mj @TheDalesReport @jesseredmond @junglejava1 @sammyj_19 @V_arrell @S_Andreoni $MSOS $CURLF $GTBIF $TCNNF $CGC $TLRY $BTC pic.twitter.com/pQBXVf1Ulj
Thanks for the D.D. , as a investor in the cannabis space for close to 8 yrs now . At times Its feels very much like we reached the point of complete mental exhaustion ( capitulation) . Non the less it seems to continue to decline ,Ive never seen anything like it in my short 8 yr of investing in cannabis . I try not to even think about The industry , SHWZ is my last hope. All the others pulled major BS like Lowell Farms when the Ceo hijacked all the IP. I am still skeptically optimistic as i found JD to be a Decent Person but this is business , and i hope and pray he wont Pull a Lowell as i assume he the largest holder of debt? Not sure on that point? Anyway I appreciate this board members as i still lurk couple times a week for signs of hope
Seems plausible that rescheduling is near , and that plus safe banking is coming soon . This should end predatory lending and draconian tax burdens , lol those descriptive terms sounds like in describing and satanic cult !
I was told 3 weeks ago by a friend who follows Pharma not cannabis in DC that the rescheduling work is done and “sitting in a desk drawer.”
— Jason Wild (@JasonGWild) June 16, 2023
Copied and Paste a little banter on the tweet i posted for perspective
Don Murphy
@donmurphy12a
Good News! Moved a GOP Senator from ‘Gettable’ to the YES column and ‘Soon’ on #SAFEBanking means Yes. So relax and have a great weekend.
The_Wolf_Of_CarsonStreet
@alexborlowski
·
34m
Hi Don, could you care to elaborate a little bit on what you exactly mean when you say that no bank bill has been marked up in several years? What is the significance of this and how does this translate into tangible progress?
Don Murphy
@donmurphy12a
·
15m
Sure. It’s been so long since the Senate Banking Committee has moved a bill to the floor that no one (including members) can remember when it last happened. The point is that #SAFEBanking has risen to such a priority that it is one of the 1st to be included in a very short list.
Copied and Paste a little banter on the tweet i posted for perspective
Don Murphy
@donmurphy12a
Good News! Moved a GOP Senator from ‘Gettable’ to the YES column and ‘Soon’ on #SAFEBanking means Yes. So relax and have a great weekend.
The_Wolf_Of_CarsonStreet
@alexborlowski
·
34m
Hi Don, could you care to elaborate a little bit on what you exactly mean when you say that no bank bill has been marked up in several years? What is the significance of this and how does this translate into tangible progress?
Don Murphy
@donmurphy12a
·
15m
Sure. It’s been so long since the Senate Banking Committee has moved a bill to the floor that no one (including members) can remember when it last happened. The point is that #SAFEBanking has risen to such a priority that it is one of the 1st to be included in a very short list.
Good News! Moved a GOP Senator from ‘Gettable’ to the YES column and ‘Soon’ on #SAFEBanking means Yes. So relax and have a great weekend. pic.twitter.com/jNsv5PnovJ
— Don Murphy (@donmurphy12a) June 8, 2023
No matter how off the analysts predictions have been , it still is nice to get some good press every once in a while . I know ,I know ,,,,Its confirmation bias but hey something , anything is a small " Beacon Of light" at the end of this Mercurial Journey
I appreciate you postings , i know everyone is hoping for the best and there are lots of speculative ideas and scenarios . Keep up the factual, rational posting's about the progress being made by SHWZ . Its hard to be optimistic and such a tattered industry I've lost on every investment in the last 2 yrs , Its exhausting . My last and only hope is SHWZ . I'm not looking at JD as a departure , I'm pretty sure this was the way this was always going to be, Nirup Krishnamurthy as the Workhorse in the relationship. My hope is they continue with the mission and don't get disgusted with the GOVT screwing with everybody and walk away.
Schwazze NM Cannabis Sales for April and annual run-rate estimate
— The Dank Informer (@TheDankInformer) May 24, 2023
April 2023
R. Greenleaf - $3,780,704.02
Everest Apothecary (pending acq.) - $1,748,489.09
Annual (x12 flat) estimate
R. Greenleaf - $45,368,448.24
Everest Apothecary - $20,981,869.08
Combined - $66,350,317.32… https://t.co/ggu4Vvp19t pic.twitter.com/MuXPymHyOF
This statement is very true i am guessing 1.5 more years of rollercoaster feels like the bottom?
Democrat politicians are the dumbest people on the planet. If you legalize use and not sales, you bring in the black market, you collect no tax and children have access
— MJ Stock Trader (@stock_mj) May 19, 2023
"Delaware consumers may have to wait up to two years before they can buy legal weed"https://t.co/j9utN5D9d5
Some perspective from reddit weed stocks , I copied and pasted , i have no opinion as of yet
https://www.reddit.com/r/weedstocks/comments/1304w3m/safe_banking_act_timeline_and_implications/
Safe Banking Act Timeline and Implications
My timeline / stock price prediction is:
(1) SAFE Banking Act gets a hearing in Mid-May 2023, voted on in June-July 2023 (Assuming SOONER let's it get a vote, which I think he will because time is ticking down to the November 2024 election. Politicians need to campaign at least 12 months in advance)
I think this triggers language that satisfies exchanges. USA MSOS's will be able to uplist and CGC will close on "Canopy USA". I remember years ago Canopy Growth's legal team saying "Federally Permissible" will let them enter the USA.
There will be a big run-up arbitrage opportunity from OTC to NYSE/NASDAQ. We saw this multiple times with Canadian LP Cannabis TSX stocks in 2017/2018 and with Psychedelic stocks in 2021. MindMed MMED / MNMD a popular psychedelic stock on April 22, 2021 went +150% in 3 days once the S-4 uplisting was confirmed - I'm looking for the same type of volatility for USA MSO Cannabis stocks.
Do MSO's have to change their accounting to GAAP? And therefore is CURA / CURLF ahead in this sense? EDIT: Appears CURA was last to convert to GAAP
Big Alcohol, Big Tabaco and Big Pharma will start to announce strategic partnerships.
(2) HHS "Schedule 3 recommendation" in August 2023
6 months since October 2022 "expedited" direction by Biden was April 2023
(3) DEA takes 2-3 months to make it official in November 2023.
This address tax 280e. (or does SAFE Banking Act take care of this too?)
This way, Biden has 12 months to campaign for November 2024 USA elections.
(4) How I would play this news
I like TRUL / TCNNF as my top pick as Florida 2024 going rec will be absolutely massive, especially when being uplisted to NYSE / NASDAQ. As Kim Rivers of Trulieve is the only female CEO, I swear CNBC will want to have her on TV as the "Queen of Cannabis" or something along those lines.
I also think having MSOS 2024 Leaps (call options) is a good way to get a leveraged play. These can easily 10x or 20x if you buy yolo far out of the money $15.00 - $20.00 strike calls. Think about it, if MSOS even goes half way to $55.91 all time high that's $28.00. Call options would go deep into the money and IV Implied Volatility and Delta would work in your favour as the value of the contracts go up.
Do you agree / disagree?
Short Interest on Cannabis stocks must be so high right now, any piece of news will cause a mini short squeeze like we saw after hours MSOS +19%.
I have not given much thought as to the next state for Shwz , This tool from visual capitalist may provide some insight, as JD would want Recreational with good State Governance, hence Cali is not an option ,
https://www.visualcapitalist.com/us-cannabis-legislation-timeline-2023/
I still see huge green fields in Co , lots to gobble up there for a couple years
Nice Dig , This has me thinking about alternate reasons for the Standing Akimbo purchase? Pure speculation at the moment but very interesting
In a very challenging Biz climate , and with outrageous interest rates Schwazze did very well, especially considering what the Competition has been reporting , Just by virtue of you posting Brochsteins disgusting face on the Schwazze shows you are disengenious . Everybody knows Brochestein hates Schwazee because JD refused to pay to play advertise on his new Cannabis Ventures website . Legacy shmegasee my ass , Those were aquisitons when they were a consulting Biz to prop up revenues in a challenging Biz climate in Colorado for publicly traded biz , good ridance to them . Damcon posted some very revealing numbers and we are doing well in comaprison . Now with that being said all of the cannabis co's are struggling the Fed Gov is taxing the shit of em , Kepps its classified on the samelevel as heroinand continues allowing black markets to flurish.
JD said " The future is extrodinarly bright , we just to get throught some rocky roads with legislation and capital markets . The strong will get through these tuff times , experiencing survivor economics , and were going to do extrodinarly well "
I sure hope so , with Lowell Farms collapsing on Thur/Friday after ex CEO George Allen resigned and in exchange for forgiving all debts he is taking all rights of the Lowell smokes and Lowell 35's !!!! He was the largest investor through his private equity firm . Very scary that this can be done with a publicly traded company , by the former CEO who could have easliy steered this to his advantage
George Allen is a POS he has literally stole the LOWLF stock of the brand Lowell smokes and Lowell35's and a Coup to fleece investors we will se what happens in time but LOWLF has some 15% revenue of those brands in cali for the next 42 months but thats it , now just another no name bulk producer ....Worthless
Debra Borshadt , who wrote the article is not a cheerleader in any way shape or form. Like you said , they call balls and strikes.
Frankly after 8 plus yrs in Cannabis SHWZ is the only Stock i have any confidence in.
Now that being said if we get some traction in regards to Safe Banking , my confidence in others will rise slightly . The Cannabis investing roller coaster has taken any irrational exuberence out of this once very passionate investor.
lowell
Seeking alpha article
Medicine Man Technologies: Why I Am Buying This Stock
Feb. 16, 2023 6:35 AM ETMedicine Man Technologies, Inc. (SHWZ)ACRDF, ACRHF, CCHWF, CNTMF, CURLF, JUSHF, MMNFF, MRMD, TLLTF3 Comments
Summary
Medicine Man Technologies is currently trading at an extremely low valuation and has the potential for a 200% appreciation compared to its peers.
The company is in an optimal position to benefit from the fast-growing cannabis industry.
Despite the challenging conditions of the economy and industry, Medicine Man is continuously deleveraging its balance sheet and expanding its margins.
The seasoned management team continues to expand the company's profit margins while benefiting from strategic acquisitions.
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Portrait of a cannabis farm owner and scientist who runs a cannabis plantation.
Sunan Wongsa-nga/iStock via Getty Images
Investment Summary
Medicine Man Technologies (OTCQX:SHWZ) - which I would give the nickname Med-Man - is an undervalued company in the cannabis industry, trading at an EV/Sales of 1.2x, EV/EBITDA of 6.4x, and P/E of 3.4x. The low EV/Sales, EV/EBITDA, and P/E indicate an attractive valuation compared to its peers, making Med-Man an excellent investment opportunity. The cannabis industry has suffered from strict FDA regulations leading to valuations and stock prices falling, but Med-Man's low valuation comes from significant financial performance in recent years. With a talented and experienced management team, the company's revenue grew at a 171.6% CAGR from 2015 to 2022, and they generated $105 million in cash in 2021.
Med-Man's growth strategy focuses on its retail, market share, and brand development. With 25 stores outperforming the core market by 12% in revenue, the company is poised for future growth. The cannabis industry has an expected total addressable market (TAM) of $28 billion this year, growing to $46 billion by 2026 and $100 billion by 2030, providing ample opportunities for Med-Man to increase sales and profitability. As the demand for cannabis products continues to grow, Med-Man's sales and profitability will expand, leading to higher margin expansion thereby attracting more investors.
In brief, Med-Man is an undervalued company in a seemingly recession-resilient industry, poised for future growth, with a talented management team, strong financial performance, and a differentiated growth strategy. I believe the company's low valuation makes it an attractive investment opportunity, and its potential for growth in the cannabis industry makes it a valuable asset for any investor looking for long-term returns.
Quick Company Overview
Med-Man operates in the cannabis business. It provides consulting and technology to help cannabis businesses grow and succeed. The company does this through regulatory compliance, cultivation and dispensary management, and tech solutions.
In brief, a cannabis business goes to a firm like Med-Man to get help with running its business. Med-Man then makes money from charging its clients a fee (depending on the type and scope of the services). The company aims to help cannabis businesses increase profitability and growth while keeping everything safe and legal.
My Investment Approach
I look for undervalued companies with significant potential for the coming years. With that, I also love riskier investments as they provide greater rewards in the long term. Therefore, I aim to hold an investment for anywhere from 3-10 years. There are five main points I look at when analyzing a healthcare company and Med-Man ticks all the boxes I outline below, hence I am bullish on the name.
1) Undervalued
The first thing I ask myself when looking at a healthcare company is: are they cheap? Med-Man company is trading at a total EV of $179 million, LTM sales of $146 million, EBITDA of $28 million, Net income of $21 million, and a market cap of $70.6 million. This means their EV/Sales is 1.2x, EV/EBITDA is 6.4x, and P/E is 3.4x. This, to me, screams undervalued/cheap.
Why is it so cheap? Well, the whole cannabis industry has dropped well over 50% because current legal conditions in the industry have been worse than investors have seen. For example, on January 26 this year, the FDA gave a negative sentiment on CBD, which led to a significant drop in the prices of Cannabis stocks. The FDA has also become stricter over time, and new approvals have slowed significantly. The number of new drug approvals by the FDA was at nearly 60 in 2020 and 49 in 2021, and this number reduced further to 39 in 2022. You can read the whole report here.
Evaluate Pharma released a report taking about the state of healthcare and stuff
Evaluate Pharma
These factors have led the cannabis industry to drop, and valuations drop when stock prices drop. When valuations and stock prices fall, this means stocks trade at a discount. However, this does not imply all cannabis stocks are cheap; in fact, most cannabis stocks still lack an attractive valuation. Med-Man has an attractive valuation because of its low EV/Sales, EV/EBITDA, and P/E (and any other valuation multiple). A quick rule of thumb to identify a good EV/EBITDA or P/E is anything below 10. This rule depends on the industry but is always a good measure to determine if a company has an attractive valuation. With SHWZ trading at a 3.2x P/E, this means that their stock price is only 3.2 times higher than the earnings they generated in the last twelve months.
In essence, all cannabis stocks have suffered from the strict FDA, and their valuations have dropped. Companies that have a lower valuation are those that have shown significant financial performance in the past years. This said, not all companies that have fallen have an attractive valuation, but SHWZ has an attractive valuation in comparison to its peers.
I have compared Med-Man's valuation to that of its peers (see below) and further explained why the company is trading at an attractive valuation. I've also dived into the cannabis industry and explained why, I believe, things are looking brighter for the sector in the coming years.
2) Management Team
The second thing that I look at when investing in a healthcare company is the management team. Med-Man’s leadership team is well-seasoned and has a track record in competitive low-margin sectors. Looking at their team, they all seem to have over 20 years of industry experience and have all taken part in very successful projects. This is a very talented management team, and I am thrilled to see where they can continue to take this company in the coming years.
3) Financial Performance and Profitability
The next thing I'd analyze is financial performance. Is the company consistently growing revenue and generating cash flow? From 2015 to 2022, Med-Man’s revenue grew at a 171.6% CAGR; In 2020, they had $24 million in sales; in 2021, they accounted for $108 million in sales; and in the LTM, they accounted for another significant increase with $146 million in sales. Med-Man’s cash flows in 2019 were at $13 million; in 2020, they lost $12 million in cash; in 2021, they generated $105 million in cash; and they have $18 million in the last 12 months. This company is growing at a radical pace which is leading to significant margin expansion. As it continues to grow its sales and profitability, I think the company will be able to keep re-investing, all of which is a great sign that will attract investors.
This is on their latest corporate presentation and I took a snip of a slide and pasted it here.
SHWZ Corporate Presentation
4) Industry Outlook
So, what is the state of the cannabis industry? The Cannabis Industry is recession resilient, which is an important thing to note as we head into a period of slower economic growth.
Additionally, there are 20 US states where Cannabis is legal recreationally, and 45% of the U.S. population lives in these states. The numbers have grown significantly in the past, and they still have a long way to go. I believe this is an excellent sign for the industry and for this company.
According to a report from Grand View Research, U.S. legal cannabis TAM is expected to be $28 billion this year and growing to $46 billion by 2026 (expanding at a 13% CAGR). Total U.S. Cannabis TAM is expected to reach $100 billion in 2030.
I copied and pasted this image from a public article that Grand View Research published.
Grand View Research
In other words, the demand for cannabis products is expected to continue to grow, providing opportunities for Med-Man to increase its sales and profitability, thus leading to higher margin expansion which will continue to attract investors.
5) Growth Strategy
The last important factor that I ask is whether the company has a differentiated strategy and how have they applied it? Med-Man focuses on its retail, market share, and brand development. They have 25 stores outperforming the core market by 12% in revenue in the latest quarter and the past seven quarters, with 16 stores in New Mexico and the rest in Colorado. According to BDSA, Legal Cannabis Markets in New Mexico are estimated to grow nearly 200% by 2026. I never said this is a great company, but it sure is a good business with great ambitions and has much potential to benefit from the growing cannabis industry.
Med-Man - Inorganic Growth
M&A is an optional consideration when looking to invest in a company. Med-Man has had significant growth due to its two acquisitions, supporting this business and my investment thesis. In December 2021, it acquired Smoking Gun and its assets in Denver:
This is on their latest corporate presentation and I took a snip of a slide and pasted it here.
SHWZ Corporate Presentation
In just one quarter, they grew Smoking Gun into a significantly profitable business (they were not profitable before). This led the gross margin to increase by 6% QoQ. This is a testament that this company has a strong management team and has meaningful ambitions.
In January 2022, the company acquired Drift, consisting of two Cannabis dispensaries located in Boulder County, Colorado.
This is on their latest corporate presentation and I took a snip of a slide and pasted it here.
SHWZ Corporate Presentation
Source: SHWZ Corporate Presentation
Here we can see another successful acquisition that Med-Man performed while still digesting the acquisition they made the month prior. Although this one was not as impactful as the last one, the fact that we are seeing a 3% margin expansion and a 15% sales increase QoQ still proves the company's potential as they continue to acquire new assets.
Another thing to note is that the bearish market has led to extremely low valuations, and many companies are trading significantly lower than they were one year ago. I believe this company will take advantage of the current state of the economy and, thus, continue to perform strategic acquisitions, which will dramatically benefit their business. Of course, this is my opinion and what I would do if I put myself in the shoes of their management team. Nonetheless, I think this company will continue to benefit from its current acquisitions, and we will likely see new investments in the coming years.
Peer Comparison: Med-Man A Rising Industry Leader Trading at a Discount
As mentioned above, Med-Man is highly undervalued in comparison to its peers. When a company is undervalued, it does not guarantee it will see a share price appreciation. It only means that the company has a significant potential for appreciation. In terms of Med-Man's potential, I chose the following companies for comparison: iAnthus Capital Holdings (OTCPK:ITHUF); TILT Holdings (OTCQX:TLLTF); Curaleaf Holdings (OTCPK:CURLF); Green Thumb Industries (OTCQX:GTBIF); MedMen Enterprises (OTCQB:MMNFF); Cansortium Inc. (OTCQX:CNTMF) (TIUM.U); MariMed Inc. (OTCQX:MRMD); Jushi Holdings (OTCQX:JUSHF) (JUSH.F); Acreage Holdings (OTCQX:ACRHF); and Columbia Care Inc. (OTCQX:CCHWF):
I created this by myself on excel, I used data from yahoo finance (available to anyone) to input all of this data. I then pasted this as a picture.
Comparable Companies Analysis (Author's Data)
I made this comps analysis to paint a picture as to why I think SHWZ is undervalued. Then, to find the appropriate appreciation potential, I calculated SHWZ’s implied share price based on the mean or average EV/EBITDA and EV/Sales:
I created this by myself on excel, I used data from yahoo finance (available to anyone) to input all of this data. I then pasted this as a picture.
Author's Data
With SHWZ trading at $1.32 per share, they have an average appreciation potential of 242.52% or a $4.5 share price. EV/EBITDA is arguably one of the most attractive valuation multiples when it comes to evaluating a company, and the fact that SHWZ has a 442.52% appreciation potential based on EV/EBITDA is extremely attractive.
Another very attractive multiple to consider would be the P/E. Using the mean P/E from the comps of 43.1x, SHWZ's share price implies an 1,180% upside appreciation potential. However, the mean P/E is exceptionally high because many of these companies are still small and new, so I do not think this is an accurate measurement. We could also compare the P/B where SHWZ is trading at (0.5x) and the mean for its peers (1.1x). But the point is that this company has a significant appreciation potential, and that also suggests that the stock is cheap. All of these I think dramatically reduce the risks of buying this company at today's prices. Regardless of the multiple that you use, there is one thing they all suggest: SHWZ is extremely undervalued.
As the cannabis industry continues to grow at a faster pace and Med-Man continues to make a name for itself in this industry, I believe investors will catch on to the company's low valuation; and that this stock will be valued at a much higher price with at least a 1.0x P/B. Nonetheless, I am extremely excited to see where the market values this undervalued and rapidly growing company in the coming years.
Downside Risks
It is essential to keep in mind that this is not a comprehensive compilation of all the potential risks that Med-Man faces. In general, Med-Man's most significant risk lies in its own industry. This is due to the strict FDA, as explained above. Every time the FDA announces a negative sentiment on the cannabis industry, this leads companies such as Med-Man to drop well over 5% in one trading day.
Dependence on the Cannabis Industry
Med-Man is entirely dependent on the cannabis industry, which is still in its early stages of development. If the industry does not grow as projected, the company’s share price will be harmed.
Limited Geographic Reach
The company primarily operates in the United States and has limited international exposure, which limits its potential for growth in other countries. This is not too big of a problem now, but this company has a limited growth capability when looking at a long-term investment.
Upside Risks
Expansion into New Markets
Med-Man has yet to announce this, but the company has the potential to leverage its expertise in consulting and technology solutions to expand into other industries and diversify its revenue streams.
Positive Sentiment From FDA
The legalization of cannabis in other countries could allow Med-Man to broaden its reach and offer its services in new markets. Just like the downside risks, if the FDA announces a positive sentiment on the cannabis industry, companies such as Med-Man will enjoy a nice high in one trading day.
My Final Thoughts
Med-Man has demonstrated attractive characteristics for an investment opportunity. With an undervalued stock price, an industry-leading management team, consistent growth in revenue and profitability, a well-positioned growth strategy in the growing cannabis industry, and successful inorganic growth through strategic acquisitions, the company presents a compelling investment opportunity.
It is also worth noting that the bearish market and strict FDA have led to low valuations, providing opportunities for Med-Man to continue performing strategic acquisitions to further benefit its business. It is important to keep in mind that investing in the cannabis industry can be riskier than other industries. Still, the growth potential and the company's strong fundamentals make it a worthwhile consideration for a long-term investment.
Overall, SHWZ is an attractive investment opportunity for those seeking undervalued companies with significant potential for growth. I am eager to see where this company will be valued in the next 3-5 years and where the state of the overall industry will be.
Hope all is well with everyone ,,, ive been remodeling my cottage so ive been absent for a while...Still lurking every few days . I must say this is the slowest news cycle ive seen in 7 yrs of cannabis investing , its also been terrible no matter what you invested except SHWZ .I am very gratefull the this is one of the few that arent at a ATL. This has got to be the most pessimistic ive ever seen it so hopefully we get back intot to an upswing in News ,Sentiment and Share price.
We made the list ? Top 50 Cannabis CO's , the revenue projection for 2022 is off but at least we are on a list
https://globalcannabistimes.com/the-global-cannabis-50-part-2/
Adding new dipsos daily
https://twitter.com/LowellFarms
While i agree the Lic model is one way , Im thinking theres more to the"out of state" approach . I dont usually waste time and type this much . Constant Due Diligence on Lowell lately has been very necessary due to the illicit black market and draconian state taxes , George is on point and if you get on twitter and see the Lowell 35's sucess and how fast that product is getting traction !!!!! Priorities have shifted ,,,again if you watch the whole video he has suggested , (depending on capital and cashflow ) out of state expansion is the only horizon for Lowell
CEO George Allen said in the you tube video 7 weeks ago
"Our strategy is shifted to leaving California, leveraging our California brand Authority and authenticity to enter into new States which have less competitive Dynamics , we've only seen a very select view of operators capable of embracing these final two strategies and we are steadfast in our belief that Lowell is one of them and that's why we have tilted our entire operations towards those strategies