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Seemed to me low volume drops and higher volume buys. Nonetheless, market makers and dye capital and others making money while retail investors not so much.
“Net loss of $18.5 million compared to net income of $14.5 million for 2021, driven by an impairment charge of $8.0 million, interest expense of $30.1 million, and loss on disposition of assets of $4.7 million”?
CDEL is a biatch
Schwazze Executing Well In Difficult Economic Conditions
Nov. 17, 2022 5:48 AM ETMedicine Man Technologies, Inc. (SHWZ)
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Gary Bourgeault
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Summary
Schwazze continues to perform well under difficult conditions.
The company continues to work on running lean while investing in growth.
SHWZ is positioned well to launch more growth initiatives heading into 2023.
Why the second half of 2023 could be a big one for the company.
Senior and Junior Botanists Examining Cannabis Plant in Vegetable Garden
CasarsaGuru/E+ via Getty Images
Schwazze (OTCQX:SHWZ), formerly Medicine Man Technologies, Inc., has been performing well in 2022 under difficult economic conditions that have hit the cannabis sector hard.
While its share price has dropped from approximately $3.25 in January 2021 to a 52-week low of $0.8665 on July 13, 2022, in response to its last couple of earnings reports, it has jumped to higher lows and higher highs, as the company continues to cut costs, increase sales, and rapidly increase its footprint in New Mexico.
For the quarter, the company also generated $4 million in positive cash and expects to generate positive cash flow for the year before acquisitions, one of the few companies in the cannabis sector to accomplish that.
In this article we'll look at the latest earnings report of the company, its performance prospects going forward, and what the growth drivers will be going forward.
Latest earnings
Revenue in the third quarter was $43.2 million, up 36 percent from the $31.8 million in revenue generated in the third quarter of 2021. Revenue for the first nine months of 2022 was $119.2 million, an increase from the $81.9 million in revenue from 2021 in the same quarter.
Most of the increase in revenue came as a result of acquisitions SHWZ made.
Net income in the reporting period came in at $1.8 million, up from $1.0 million year-over-year.
Adjusted EBITDA was $15.9 million, accounting for 36.7 percent of revenue, compared to $8.8 million in adjusted EBITDA last year in the third quarter.
Gross profit margin jumped from 47.3 percent in Q3 2021 to 60.1 percent in Q3 2022, which was primarily attributed to an increase in the percentage of retail sales and vertical product sales in New Mexico.
Operating expenses in the third quarter were $14.8 million, up $3.6 million from the $11.2 million in operating expenses from the third quarter of 2021. The increase in expenses was from acquisitions and the accompanying operational costs associated with the businesses.
Other expenses were $3.7 million, an increase of $2.2 million, or 139 percent over the $1.6 million in Other expenses year-over-year. That came from paying higher interest payments because of increasing its debt load.
SHWZ guided full-year 2022 revenue to be in a range of $155 million to 165 million, and adjusted EBITDA from $51 million to $56 million.
The revised revenue outlook came from wholesale sales coming in below expectations and delays in new store openings in New Mexico related to construction issues.
Colorado and New Mexico
SHWZ has operations in the states of Colorado and New Mexico. In this section of the article, we'll look at each of them and what the prospects are going forward.
Colorado
In 2022 the company has 5 more cannabis dispensaries and one more cultivation facility.
On September 14 also announced it had signed definite documents to acquire some of the assets of Lightshade dispensaries for $2.75 million in cash. That will add a couple more dispensaries in Colorado, bringing the total to 25 at this time. Expectations are the deal will close some time in Q1 2023.SHWZ also entered into "a licensing agreement with Lowell Farms to manufacture and distribute Lowell Farms Smokes, a premier line of pre-rolled joints to dispensaries statewide." Sales are expected to start in the fourth quarter of 2022.
After delays related to approval from the city, construction on its Colorado internal distribution center is nearing completion and should be operational in Q4. Management stated that the center will remove a lot of waste out of its supply chain.
Same-store sales were down 10.6 percent year-over-year, coinciding with the drop in the total customer visits to 452,220, down 10.7 percent from the third quarter of 2021. Even with the slowdown, the company outperformed the Colorado market by 12 percent in the reporting period.
Last, wholesale revenues continue to slide in the state because of oversupply in the market, resulting in downward pressure on prices.
New Mexico
So far, in 2022, Schwazze has increased the number of its dispensaries in New Mexico by 10 and added another four cultivation facilities in the state. It also added one more manufacturing facility in the market. New Mexico is also part of the licensing agreement the company made with Lowell Farms to sell its pre-rolled joints. A date wasn't given as to when sales will start.
In April 2022 SHWZ started to sell both recreational and medical cannabis in New Mexico, with same-store sales climbing 48.4 percent in comparison to last year in Q3. Sales have been growing on a month-to-month basis since then.
Going forward, New Mexico will also continue to grow at it adds dispensaries to new, local markets across the state, focusing primarily on its southern and eastern borders. Recreational sales are also expected to continue to grow in the quarters ahead.
Revenue in New Mexico was $43.2 million in the third quarter, up 36 percent from $31.8 million year-over-year.
Conclusion
SHWZ is successfully driving down expenses and costs even as it invests in growth in the Colorado and New Mexico markets. It has made a big run since its earnings report, where investors liked what they heard.
For that reason, it would probably be best to wait for a pullback in its share price before taking a position.
I think the company is well-positioned to continue to grow revenue in 2023 and could outperform as it closes in on generating free cash flow before acquisitions, possibly on a consistent basis. It is driving down its internal costs, and benefits of wider margin are expected to "be fully realized in 2023."
If that's how it plays out, earnings and free cash flow will improve as the company grows its revenue from the moves it's making in Colorado, and especially New Mexico, which has a lot of momentum heading into 2023.
What's impressive to me is SHWZ doing this in very tough economic conditions and doing much of it with retail customers. Being able to maintain growth among retail customers is a competitive advantage because of higher pricing power and wider margin.
Assuming it can continue executing like that in 2023, it's going to surprise a lot of people to the upside, especially if inflation drops significantly, the Federal Reserve stops or significantly reduces its interest rate policy, and consumer sentiment starts to improve. If so, the second half of 2023 could be a big one for the company
Where does this link go?
Wow. Joshua Haupt high fiving marcus lemonis in the trailer- phenomenal
From Nirup’s podcast, sounds like they’re focusing on Colorado to start, but I agree and I’ll say it again- Branding!
Not to mention future deals and acquisitions...
No doubt. And I like what he said about Schwazze combining their business acumen with industry expertise- and also what he said about the need for branding (among other aspects) in the emerging industry- hello? Starbuds?
Well worth a listen. Pretty impressive guy
Nirup podcast posted today...
https://cannabinoidconnect.libsyn.com/85-nirup-krishnamurthy-schwazze
Purplebees is owned by Mesa organics. So, no.
So much for that support
Unless you look at the chart from before the change to Schwazze, no?
As long as one gives the micronutrients needed after...
I seem to remember reading that they’ll also spread out the payments over time, balancing stock and cash. By the end of the year, cash coming in now will help future closings... feel free to correct me...
I would bet they’ll do an offering after the first deals are announced and the price is much higher
Obviously not paying attention I guess
Really? 1-10 reverse split?!?!?
Yeah I saw that too and was surprised. So much for that... WTF?
Medicine Man Technologies Becomes the First Publicly Traded Company Approved for Suitability by Colorado’s Marijuana Enforcement Division
3/11/20, 5:40 PM
The Company Continues to Make Significant Progress on Outlined Acquisition Strategy
DENVER--(BUSINESS WIRE)-- Medicine Man Technologies Inc. (OTCQX: MDCL) ("Medicine Man Technologies" or “the Company") announced that the Marijuana Enforcement Division (MED), a division of Colorado Department of Revenue, has approved the Company’s application for suitability.
Last year, the Colorado legislature passed, and the Governor signed House Bill 19-1090 which allowed publicly traded companies to own Colorado cannabis licenses. Soon after HB19-1090 went into effect, Medicine Man Technologies submitted a suitability application to begin the process of executing against the Company’s outlined acquisition strategy. This thorough state-mandated review is designed to ensure that the Company and its officers are suitable to run an above-board and compliant cannabis company.
“We are thrilled that Medicine Man Technologies is the first publicly traded company to receive suitability approval. This is a huge milestone in our march to become the largest cannabis company in Colorado,” said Justin Dye, Chief Executive Officer. “We appreciate the responsibility of running a credible cannabis company and are laser focused on merging Colorado’s leading cannabis companies into one organization with a true focus on consumers.”
Medicine Man Technologies has entered into agreements with 11 premier cannabis operators across Colorado to become one of the largest vertically integrated seed-to-sale operators in the global cannabis industry. Upon closing the series of pending acquisitions, anticipated to occur in 2020, the Company will have 13 cultivation operations, five product manufacturing operations, 34 dispensaries, and product development and innovation all under a single entity.
It’s interesting that there’s no mention of pending things- just a description of their original consulting service, no?
Between 1 for 5 and 1 for 15
Saw it in the proxy vote I received via email as a shareholder. No announcement, but a vote coming at the next board meeting in December
Announcement of a reverse split will do that...
They got gobbled up
So what’s with the crazy volume from a week or two ago? Shorts covering and then shorting again? Some other entity buying some of the shares traded that day? Has anyone seen this kind of action with other stocks? TIA
It actually says delinquent in your link, bud...
That's ag boy
Hmmm.... Carbonate fuel cells...
ExxonMobil, FuelCell Energy, Inc. Pursue Novel Technology in Carbon Capture
5/5/16, 8:24 AM
Exxon Mobil Corporation (NYSE: XOM) and FuelCell Energy, Inc. (Nasdaq: FCEL) today announced an agreement to pursue novel technology in power plant carbon dioxide capture through a new application of carbonate fuel cells, which could substantially reduce costs and lead to a more economical pathway toward large-scale application globally.
This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160505005370/en/
"Advancing economic and sustainable technologies to capture carbon dioxide from large emitters such as power plants is an important part of ExxonMobil's suite of research into lower-emissions solutions to mitigate the risk of climate change," said Vijay Swarup, vice president for research and development at ExxonMobil Research & Engineering Company. "Our scientists saw the potential for this exciting technology for use at natural gas power plants to enhance the viability of carbon capture and sequestration while at the same time generating additional electricity. We sought the industry leaders in carbonate fuel-cell technology to test its application in pilot stages to help confirm what our researchers saw in the lab over the last two years."
Chip Bottone, president and chief executive officer of FuelCell Energy, Inc., said his company is pleased to bring its global leadership in the development of carbonate fuel cells to this project.
"Carbon capture with carbonate fuel cells is a potential game-changer for affordably and efficiently concentrating carbon dioxide for large-scale gas and coal-fired power plants," Bottone said. "Ultra-clean and efficient power generation is a key attribute of fuel cells and the carbon capture configuration has the added benefit of eliminating approximately 70 percent of the smog-producing nitrogen oxide generated by the combustion process of these large-scale power plants."
Two years of comprehensive laboratory tests have demonstrated that the unique integration of two existing technologies – carbonate fuel cells and natural gas-fired power generation – captures carbon dioxide more efficiently than existing scrubber conventional capture technology. The potential breakthrough comes from an increase in electrical output using the fuel cells, which generate power, compared to a nearly equivalent decrease in electricity using conventional technology.
The resulting net benefit has the potential to substantially reduce costs associated with carbon capture for natural gas-fired power generation, compared to the expected costs associated with conventional separation technology. A key component of the research will be to validate initial projected savings of up to one-third.
The scope of the agreement between ExxonMobil and FuelCell Energy will initially focus for about one to two years on how to further increase efficiency in separating and concentrating carbon dioxide from the exhaust of natural gas-fueled power turbines. Depending on reaching several milestones, the second phase will more comprehensively test the technology for another one to two years in a small-scale pilot project prior to integration at a larger-scale pilot facility.
ExxonMobil is a leader in carbon capture and sequestration and has extensive experience in all of the component technologies of carbon capture and storage, including participation in several carbon dioxide injection projects over the last three decades. In 2015, ExxonMobil captured 6.9 million metric tons of carbon dioxide for sequestration – the equivalent of eliminating the annual greenhouse gas emissions of more than 1 million passenger vehicles.
"We are continually researching technologies that have an ability to reduce carbon dioxide emissions," Swarup said. "Most solutions that can make an impact of the scale that is required are not found overnight. Our research with FuelCell Energy will be conducted methodically to ensure that all paths toward viability are explored."
Using fuel cells to capture carbon dioxide from power plants results in reduced emissions and increased power generation. In the carbon capture context, power plant exhaust is directed to the fuel cell, replacing air that is normally used in combination with natural gas during the fuel cell power generation process. As the fuel cell generates power, the carbon dioxide becomes more concentrated, allowing it to be more easily and affordably captured from the cell's exhaust and stored.
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My tdameritrade act has sglbd's market cap at 30 billion- Doesn't reflect the r/s. S'up?
Which led me to this: (do we have a "true" MR-FC?) Eco?
https://www.researchgate.net/publication/273288553_Selectivity_and_mixed_reactant_fuel_cells
In any case, here presentation yesterday was on converting co2 to usable chemicals, not her microbial fuel cell...
Sona Kazemi just spoke in NJ, eh?
http://www.apec-vc.or.kr/?p_name=information&sub_page=comming_event&gotopage=1&query=view&unique_num=863
To be honest, I am serious, and I'm sure much more ignorant than not about how the market works. I'm a long or bag holder depending on whether or not I believe I've thrown a bunch of money away. I still hope something comes of my investment. Im definitely beginning to appreciate that value of "investing" in stock as like apple or Starbucks and "trading" pretty much anything on the OTC. It's been an interesting learning over the last two years, and I will say that I put more money into mantra than any of my other gambles. I do like gambling...
I'm just sharing my 2 cents about what I see in terms of trades up and down and the price.
To be honest, I've seen a roughly equal amount of paint jobs up AND down. I've come to the conclusion the ones that go down are the result of an algorithm and a computer. Maybe the ones up too... Sure- there are retail folks who might slap the ask, but "who" would walk it down a huge percentage on a $5 or less trade?
Can someone explain why a news release wouldn't show up in my td ameritrade app, or my apple stocks app, or on the regular "marketwired" and other's newsfeeds? I've noticed this before with mantra as well as other stocks. TIA