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I could see he was anti-cannabis but I didnt understand exactly what he was posting. I know a lot of the anti-cannabis are concerned with high THC products and the possibility of them leading to psychosis...especially in youth. So I wondered if that group of individuals managed to get Colorado regulators to accept a potency cap. I was Googling last night but haven't found anything. Figured I would follow the guy to see what he follows up with.
I think most have nothing to talk about with the way the sector, let alone the market, has been. As for SHWZ, it seems something should happen soon because the company has lofty 2022 revenue and EBITDA estimates. As for Colorado, people keep talking about sales being down, and they are compared to 2021 COVID sales, but they are still up compared to pre-COVID monthly averages. If they hit the monthly averages, from 2018-2021, for the rest of the year, 2022 appears to be on par for 1.9B in sales. Here is a comparison of the first 4 month sales for that time period:
2018 - 490M
2019 - 505M
2020 - 587M
2021 - 768M
2022 - 612M
Reminder: This is today at 1:30PM EDT
More recognition from a guest on the Cannabis Investing Podcast. Starts at the 10:45 mark.
https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5tZWdhcGhvbmUuZm0vU0E5MjE1ODkxMTM3/episode/YjM2NDEyOGUtZWNiNy0xMWVjLWFlM2UtOGI4ZGMyMWJlYWQy?ep=14
https://www.currentargus.com/story/news/2022/06/04/carlsbad-remains-new-mexicos-top-10-cannabis-sales-despite-dip/7489315001/
Includes a May sales breakdown per location. Overall sales for May were down a small amount compared to April.
Supi, I had issues opening on my phone last night. Opened with no issues on my computer. Essentially it is a link to this YouTube video:
Most recent Cannabis Investing Podcast, around the 1hr 6min mark, Mike Regan (who is a financial analyst for MJResearchCo...which I heard on another podcast holds a long position in SHWZ) gives his 'most contrarian point of view' and defines the bull thesis (without giving a company name) for investing in SHWZ. It is basically what we have discussed. Successful operator in a competitive market, because it is only a matter of time before the other markets see the same cost compression/margins as the competitive markets.
https://seekingalpha.com/article/4514621-cyclical-trends-amidst-secular-growth
I think you are right. At one point in time it was the stock that indicated the market turn green or red. Now people have just grown to expect CGC earnings to stink QoQ. Nice to see things holding up, but we are also going into a long weekend...so things could get interesting by the end of the day.
What you said regarding the expiration date makes sense. If I am remembering it correctly, this transaction has always been expected to close in June.
I dont think any of us would have known that you use a translator had you not said that you did.
Wish you luck! I am staying the course, but I can understand. There are a lot of stocks that are around 5 year lows. If you dont believe that this stock/industry will move without federal legalization then I dont blame you.
I guess in this market anything is possible. I know I am getting sick of all the the failed bottom calling.
It is definitely slowing my willingness to add more...although the hesitation has been working to my advantage.
Maybe someone on here knows? Is the bioscience division GMP certified, and if so, is the certification classified as nutraceutical or pharmaceutical?
Time to vent. I think I am more upset with the company's investor relations department than with the declining stock price. For a person with 25 years of investor relations experience, Joanne Jobin, has yet to get back to me on any question that I submitted through the website. I have also asked these questions on earnings calls...to which they continue to get overlooked. What annoys me the most, is that I have asked questions to other companies, that I am invested in, and have received timely responses...but the company that I continue to hold on a pedestal has yet to even acknowledge my inquiries. At this point I would have accepted ANY response...any acknowledgement...but the fact that I continue to get ghosted is really chapping my ass.
I agree. State acceptance is the foreseeable future. The funny thing about the cannabis industry, which we are washed up in because we are investors and follow the industry, is that their marketing campaign is solid. 67% percent of the public wants recreational, 90% are in favor of medical. Historically there are more scientific studies on cannabis than <insert drug name or condition here>. Their is the concern with the growing number of robberies due to lack of banking. Then there are countless anecdotal stories on how people used cannabis and treated a vast array of ailments. The thing is, this set of data, while it resonates well with a majority of the general public, is not exactly the 'true' story. I find it ironic that the industry relies heavily on pushing the "medicinal" side of cannabis...but they make sure to distance themselves from actual medical literature, and the growing concerns, surrounding the plant. Now I am not trying to be a naysayer, but I tend to like to understand both sides of the argument because it paints a fuller picture. The industry is moving forward...but definitely not at the speed we investors were anticipating. Almost all of the (historical) scientific research that is out there is based on low quality, low THC, cannabis flower. It is good to see that the government recently expanded the list of organizations that are allowed to provide product for current day research...as opposed to the inconsistent garbage that was previously supplied by the University of Mississippi...but I dont see how the US federal government can move forward with federal regulation without DEA grant funded research...which will come in time. Until all this high THC, and various type of products like resin, shatter, etc. can be reviewed in relation to efficacy and public safety, expect the status quo. State level movement...with the possibility of some form of banking. IMO the biggest thing to push banking would be the IRS. Them wanting to get this 'all cash' industry, an industry seeing billions annually, onto a paper trail so that it can be audited and verified that they are paying their fair share.
Thanks Marillionaire for the links. It is easy to read articles when they validate my own thought process.
Dont worry Gee4030, I appreciate all posted information, both positive and negative (provided it is industry/company oriented), but I draw my own conclusions and make my own decisions.
DrugDoctor, I agree. (Sorry for the long winded response, but I didnt want to blow off your reply.) Out of the entire call this the comment that stuck with me. I think because it was the most candid comment that I have heard on an earnings call in a long time. It expressed that Justin was aware of the visual impact of the numbers pertaining to investor sentiment...and possibly in agreement to the point where the numbers werent telling the real story. I liked that this comment addressed the concern head on and reinforced investors that projections were still on track. I appreciated that it wasnt an attempt at polishing a turd. I get that the CEO has to be the biggest cheerleader...and in one particular company it is a (well invested) chairman, but I get so fed up listening to earnings call when the company puts up a numerical blooper and they speak like numbers dont matter...to look at the distant future and see the 'what ifs'. If they address a letdown they give excuses, like cost compression (while operating in limited licensed market)...or hint at possible 'dark market' trading dragging down the SP. Obviously all cannabis investors want to see a positive return on their investment, because we see the industries potential. What I like about Schwazze is that they are still managing to get it down in one, if not the, highest competitive, well established US market. For me, I see Canada and the well established US markets as the true future tell...and honestly it makes sense. I think at the end of the day the majority of the public can afford a $40-$60 purchase (basket size)...especially with inflation and in a cash only industry. I think the people investing in the companies that operate in the (temporarily) limited licensed market, where basket sizes are $100+, might be investing in the flashy 'top tier' companies with "impressive margins"...but they better get used to that 'price compression' excuse because at the end of the day cannabis is a commodity and their markets wont be protected forever (also why I think MSOs are against federal reform...and that they just want the pieces that favor capital inflows). If they are complaining about cost compression because the basket size dropped to "just over $100"...I cant wait to see how these companies do when that basket size is cut in half. Sure, it will take time, but this is where Schwazze will eventually shine. And I fully believe it will only get better as the company has yet to fill shelves with their own products, and reap the extra profit margins from those sales. Sales that the other 'Top MSOs' are already recording because they are already taking full advantage of this...which is why their growth can only come from political capital inflow changes, M&A, new states/markets or new product development.
I might be disappointed that the numbers didnt post the way that I expected, and that the timeline to launch has been pushed back...and vocal about it...but I have certainly not lost faith in the company.
You have been here long enough to know that the limited volume usually benefits the one that sits and waits for the stock to come to them. At this point, that is my game plan...low bids that may or may not get hit. The company might release additional acquisition news (expected to close on Urban Health and Wellness soon) but this industry moves on political influence. That puts the next bit of news as Schumer's CAOA bill. He was aiming for cannabis holiday, 4/20...which makes me think he will drop it on 7/10.
I agree with you, but might add a few here and there before July. Definitely pleased to see that it is not just holding up well...but gaining.
Justin Dye: "We had a messy quarter with a lot of one-time costs but we did a bunch of things that were built for the long-term foundation. And the one-time costs associated with M&A as well as some of the derivative charges that were non-cash, et cetera. We set ourselves up really well for the rest of the year to exit 2022 as we projected. And we're very confident about that. So I think that's part of the good news. The other good news is we got $47 million of cash on the balance sheet that is a war chest for us to go invest in the business and to grow and outgrow our markets. And we're going to do that."
I am with you lazur. That is exactly what the results will show, and the potential headlines, regardless what is really happening behind the scenes...like expenses for acquisitions and to get all businesses on the same operating/purchasing system. Most wont look at the company outpacing the state. They will see the declining state numbers, the declined margins and EBITDA and draw their conclusion. More waiting.
Yes we do! This is a letdown, and fingers crossed, the SP holds up (I'll be checking under the cushions for spare change). We all know what the company is building...but the market is an 'expect it now' market. At least we are still outpacing the Colorado industry (by 10%) and have forward looking comments...like New Mexico Rec...to look forward to next quarter.
Through April, licensed dispensaries in 40 New Mexican cities sold $39,470,788 altogether, of which $22,133,173 was for adult use and therefore taxable under the state's Cannabis Regulation Act.
Sales of medical cannabis, which is exempt from taxes and requires enrollment in the state's medical cannabis program, amounted to $17,337,615 for the month.
https://www.lcsun-news.com/story/news/local/new-mexico/2022/05/03/recreational-cannabis-sales-new-mexico-near-40-million-first-month/9636607002/
Yes, like Drugdoctor said, EBITDA is the common industry metric...because these companies get crushed with taxes. But keep in mind, when comparing EBITDA, that it is still not an apples-to-apples company comparison. You have to review how each company calculated their EBITDA amount. I have seen several companies adjust, and re-adjust, their EBITDA metrics just so they appear to be progressing QoQ. I, like most, am still learning on how to value these companies...I am definitely still a novice...but EBITDA is just one of the many metrics that I use when judging whether or not a company is worthy of my investment. It is probably also why I have very few (2) long term holds out of all of the companies in this industry.
Updated presentation posted on the website:
https://d1io3yog0oux5.cloudfront.net/_3d0f02c7b0ccecfdfdeda54867609285/schwazze/db/341/2482/pdf/SCHWAZZE+PPT+apr+29.pdf
Cash flow positive AFTER taxes.
Cannabis sales in New Mexico, retailers sold $22.1 million in April according to new data released by the Cannabis Control Division (CCD.) Albuquerque had the most sales, totaling just over $8 million in recreational cannabis sales that month.
Las Cruces came in second place, selling $2.06 million. Santa Fe sold a bit over $1.8 million worth of recreational cannabis in April. Sales began on April 1, 2022.
https://www.krqe.com/news/marijuana/new-mexico-sold-22-million-in-recreational-cannabis-in-april/
Thanks Drugdoctor. I hope in future earning reports that the company sets a new standard for the industry. I hope that they provide their total income statement but then further break out the information by state of operation.
At lot of good information. I am waiting on an updated version of the Investor Presentation. Also, I enjoyed how he mentioned (a few times) that the company is cash flow positive AFTER PAYING TAXES.
Thanks Lazur! I have been waiting for this to drop.
I liked the: "Schwazze has big goals, and we're excited to supply them the tools and expertise to reach them".
Definitely adding up. Garwood increased his position by 85K shares over the last 12 days at an average purchase price of $2.004. Total spent in that timeframe is $170,325.70. He went from holding 107,735 shares to 192,735 shares.
Thanks Knife for sharing your experience!
Another method is to defer taxes. I think some 'industry analysts' in the Twitter-sphere are finally starting to notice and question it. I dont understand exactly why these companies do this, but assume that it has to do with spending that money elsewhere because late taxes accrue interest at a slower rate then debt, or, they arent paying the full amount figuring tax laws might change to favor the industry and therefore they will eventually owe less. Either way, some of these 'Top MSOs' have accrued some lofty deferred tax liabilities. Here the list for the companies rated above SHWZ per FreeCashFlow's Tier 1 and 2 breakdown:
Deferred Tax Liability - Annual Report unless otherwise stated:
Verano - $323.2M (Q3-2021 report)
Curaleaf - $299.3M
Trulieve - $251.3M
Cresco - $85.7M
GTI - $81.8M
AYR - $70.1M
Jushi - $52.5M (Q3-21 report)
TerrAscend - $14.3M
4Front - 7.1M (Q3-21 report)
Ascend - $1.4M
"In New Mexico about $672,000 was generated in tax revenue from recreational marijuana sales during opening weekend"
https://www.koat.com/article/in-new-mexico-about-dollar672000-was-generated-in-tax-revenue-from-recreational-marijuana-sales-during-opening-weekend/39632950#
Thanks, for some reason I thought it was open for half the day.