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Jeff Garwood bought another 10K shares. He is loading the boat between $2-$2.10. Can't blame him. I plan to have a (small) order ready in the event the CAOA delay news causes a quick dip tomorrow.
'SAFE Banking wont be passing in the short term.' Schumer just delayed the introduction of his CAOA bill. He believes that it will be ready for introduction before the Augist recess. I read the delay as dont expect ANY cannabis legislation, that is not his CAOA bill, to see a vote in the Senate before his has a shot.
Absolutely not disputing that. Just wanted to clear up the post that Dye didnt buy the shares on the public market. They were awarded to him.
How did you do at your golf tournament?
It looks like Justin's were awarded shares/options whereas Jeff's was an actual buy.
New Mexico and Schwazze, separately, are parts of the conversation. New Mexico is first, after a discussion about the MORE Act. Then when they get to the company they express mostly general industry comments because the hosts are aware of, but do not follow, the company. I think it starts around the 13min mark. I havent listened to the podcast yet, but skipped around to find the starting point once the company was mentioned to be part of the discussion:
https://podcasts.google.com/feed/aHR0cHM6Ly9hbmNob3IuZm0vcy9jYmRmYmY4L3BvZGNhc3QvcnNz/episode/YjM5OGI2NDUtMjRhZi00ZWU1LWFkMzEtZTFhYzBmMjIzNzg1?hl=en&ved=2ahUKEwjggdau6P_2AhX-hXIEHfTHCt0QjrkEegQIAxAF&ep=6
I think his realistic target is not to sell to another MSO/operator but to sell to big CPG, or some other behemoth, when the time allows. Sure 'doing right by our shareholders' could mean several things, and money talks, but he has been building something unheard of in the industry -- a profitable business that operates in a (highly) competitive location/market. The same cannot be said by the other MSOs. They are successful because they make bank operating in limited licensed, siloed, markets. They are successful based on geography and their ability to raise capital. They are successful because they are the few, if not only, 'legal' cannabis option in those location...so they can sell mid-to-low quality at whatever price and get away with it. Look at their excuse for quarters when revenue declined. They complaining over increased competition and price compression. To sell SHWZ to one of them would not only be a disservice to shareholders but also a giant business step backwards. We would end up being the acquired company, that also gets the short end of the stick. We wouldnt see generated revenue continuing to build our business. It would get diverted elsewhere to fuel the other decisions/growth. Ultimately, we would be the foundation to their deck of cards. Dye has the solution, and now is proving the business model. This model can then become the 'plug-and-play' to a much larger company entering the industry...while also carrying the checkbook.
Over $2.6M in total cannabis sales for the first day in New Mexico. About 70% were recreational sales:
According to state officials, there were 20,446 transactions by 5 p.m. totaling $1,416,659. During that same time, about $580,000 worth of medical cannabis was sold.
Alan was the poster boy of the company back when AW was pushing his term sheets. He has been sour since the regime change...and the company probably quit paying for his services. Anyone that follows him can see he holds grudges.
A few hundred people lined up outside R. Greenleaf, at 2750 Mall Drive, ready to purchase weed in various forms, including flower, edibles and tinctures.
Photos/Videos including JD and the Schwazze/Greenleaf Dispensary
https://www.lcsun-news.com/story/news/2022/04/01/recreational-cannabis-sales-legal-new-mexico-las-cruces-dispensaries-open-midnight/7241202001/
Alan has a disdain for the major Canadian LPs, but when it comes to the US industry he has been pushing the same Q4 theme. That the quarter was an industry-wide step back...and not exactly related to specific companies. I am not exactly sure why, but I would go with the fact that he also provides a paid subscriber service, so highlighting every company's QoQ revenue decline is probably some type of damage control to protect the 'favorites' that he pushes to his insiders.
Cant remember exactly, but from what I remember, stated it was up due to the debt they took on.
StevenRisk, I think we all were surprised by the net income. As for your early estimates, it is absurd that you are taking a beating for your post. T9 defend you, I dont think anyone could have predicted the company would report 15M in 'unrealized gain on derivative liabilities' for the year...14M for the quarter...especially when the 9 months leading up to the quarter they reported 968K. To which Nancy addressed the reason for the significant increase on the conference call. I am looking forward to the transcript. I have 10 minutes in the middle of the Q&A that I need to catch up on...but for the questions I did hear...I thought they were better than the 'analyst' questions you get on all the earnings calls for the major exchange listed companies. In addition to upcoming company growth, I am excited for the next 2 earnings reports...and especially Q2, to see the impact of New Mexico's recreational sales.
DANG! Analyst will probably call it a miss because they expected 112-115M.
Free CashFlow, on Twitter, has the count at 187M in their latest post on March 8th.
Future, I would love a jump in share price...and I expect some...however I keep debating myself over what to expect, at least in the next month. I too expect them to have buyers lined up, the thing I keep questioning is that the timing lines up pretty close to a share unlock. Will they convert, wont they, who knows...but I have to assume that most will. I fear that most of the initial buy in will be countered, or controlled around, the restricted shares hitting the float. So I am tempering my expectations a little bit while remaining optimistic.
Exactly, they did it to increase liquidity. However I would assume that if they suspected the federal government was going to move on regulations that would allow US uplist, in the near term...say by the fall...I personally dont think they would have gone though the hassle to list on a Canadian exchange. Hoop had an interesting comment, using it as a quick stepping stone if/when the time comes...just think the move was pursued because they dont see US uplisting happening soon (great down the road benefit). That is why, to me, the move is telling. Trust me, I will be more than happy to be wrong.
Even though shareholders were alerted to the possibility of a future NEO exchange listing, I also find it telling. Since SHWZ has proceeded with the uplisting, they probably dont expect any federal movement...at least to allow the industry to uplist...occurring anytime soon. Because if they did they probably wouldnt have gone through the hassle/expense to do so.
The question I ask myself is whether or not this means that we will finally be picked up by some of the other, larger, ETFs who dont hold any US OTC (only) listed plant touching stocks but will hold US operators who are dual listed. I am assuming that this is the liquidity the company is hoping for.
Coincidently, Rena Sherbill asked Tim Seymour his thoughts on a state by state growth approach in her recent podcast:
https://seekingalpha.com/article/4495864-cannabis-industry-growth-will-return-in-second-half-of-2022
Overall he seemed very favorable of the idea, stating, 'I kinda like that there will be regional powers.' That it is going to make it 'fascinating for consolidation some time down the road.' And he believes that is where the industry is evolving right now and suggested that is very good for the long term. Starts around 31:20 in the conversation.
LOL! Maybe I'll get lucky later this year and find that version of cookies in my kids Halloween candy this year.
Well hopefully that boy scout is also walking with a girl scout, and she just happens to be on her way to deliver me the boxes of cookies that I purchased several months ago. #RealWorldProblems
Interesting. I didn't see it until you said it.
Does anyone know what the new logo/symbol is? Is it supposed to be an "S" merged with a "Z" and the dark green is the letters overlapping? Or is it a sideways bud (the dark green) with two sugar leaves (the light green)? Someone help me out. It's driving me nuts!
Listening to these MSOs use cost compression and competition as an excuse for falling revenue and/or EBITDA. As if their limited licensed, siloed, markets were going to last for an infinite amount of time.
Boris Jordan Q4 and EoY conference call was questioned multiple times about EBITDA:
"But one needs to understand, those markets, California, Colorado, Oregon, Michigan, they're never going to have the 30-plus percent EBITDA margin, at least not in the foreseeable future. I think the best we can do in those marketplaces is going to be somewhere between 20% and 25%."
Justin Dye: <<<hold my beer>>>
Q2-21: Adjusted EBITDA is $10.0 Million, 32.6% of Revenue
Q3-21: Adjusted EBITDA is $8.8 Million, 27.6% of Revenue
In the event anyone is interested the podcast Psychoactive, with Ethan Nadelmann, interviewed Congresswoman Nancy Mace:
https://www.iheart.com/podcast/1119-psychoactive-84544756/
Your dialogue...LOL! Be sure to thank him for taking a detour to check out a location and give a status report. I am curious on if he was able to check out some company grown product and provide a quality report.
While earnings reports can be confusing to read, I decided to analyze the simplest core business fundamentals: total revenue minus cost of sales, operations expenses and income tax provisions. I then took the net revenue and calculated that as a percentage of revenue. Here is a review of the last quarter of information from some of the top MSOs, and SHWZ. Keep in mind these MSOs are reliant on the limited licensed, limited competitive markets to be successful...I was also incredibly shocked to see the income tax amounts that these companies report quarterly. SHWZ is just getting started and pulling a similar net to revenue percent in a highly competitive market:
All Q3 comparisons (Revenue\Calculated Net):
Trulieve - 11% (224M\25M)
Verano - 11% (203M\23M)
GTI - 9% (234M\21M)
Curaleaf - :o( (317M\-58M)
MRMD - 8% (33M\2.6M)
SHWZ - 8% (32M\2.5M)
Mold, other product issues are all throughout the industry. That's not the point. The point is what Ackroni has been trying to allude to. Advertising and marketing is one of the major challenges any cannabis company faces. I am not saying that I agree with this being an upcoming move for SHWZ, but I understand it from other MSOs that have larger, national, footprints. A celebrity sponsored line comes with celebrity clout, but more importantly, their following, which is a round about way of advertising.
That is not even the 'trick'. The play on these 'high profile brands', since everything is essentially seed to sale in each state...and the selected growers/producers are locals running their genetics...is to do what Gage did. They got the exclusive rights to Cookies in Michigan. What they did was position their flower right next to Cookies products on shelves. It is said that people will travel miles (hours sometimes) to buy Cookies branded cannabis...(side note) and that is also why Gage's average basket size is so large, because people travel for it so they stock up...anyway, by Gage positioning their 'high quality' product next to the Cookies brand, but obviously at a cheaper price point, they were able to use the Cookies brand to attract consumers...and convert them into Gage consumers. Consumers favor Cookies because it is perceived as 'high quality' cannabis, that is how Berner markets it. If you can take a customer looking for high quality cannabis and have them try a cheaper (own brand) of equal quality, they are likely to transition to the cheaper product...because consumer studies continue to prove that customers are looking for quality high-THC products for the cheapest cost.
Speaking of OTCX....I havent seen him around in the last 2 weeks.
Arizona is interesting, but because it is a limited licensed state, it is pay (big) to own a license, but that 'retail' license is fully vertical...meaning it covers retail, cultivation and manufacturing. At this point in SHWZ's growth I am not sure they would want to overpay. I could see them saying that the amount to purchase a license, or acquire a company, might see a better return if used elsewhere. The one interesting thing about Arizona, that I didnt know until a recent podcast, is that current license holders are allowed to sublease. Now I know it goes against SHWZ's 'go-deep' strategy but I also think it would be a very interesting option because Arizona has been favorable to taxing cannabis businesses. I believe I heard that there is no cultivation tax. My thought, what if they pay to sublease? Then they could get brands for sale in the state. But also what if, they use their cultivation or processing skillsets and work out a sublease to own, kind of deal. Work their way into the state through the backdoor.
LOL, Aurora's earnings report. Negative gross profit before fair value adjustments. The Canadian LP stocks will probably be up another 10% tomorrow. But seriously, shame on Nasdaq for allowing these companies to list, let alone remain listed, after their continued failure, manipulative acts and practices.
Hey Nasdaq, here is a reminder of what you stand for. Do something before these Canadian has-beens wreck it for the real players in the industry;
5100. NASDAQ'S REGULATORY AUTHORITY
5101. Preamble to the Rule 5100 Series
Nasdaq is entrusted with the authority to preserve and strengthen the quality of and public confidence in its market. Nasdaq stands for integrity and ethical business practices in order to enhance investor confidence, thereby contributing to the financial health of the economy and supporting the capital formation process. Nasdaq Companies, from new public Companies to Companies of international stature, are publicly recognized as sharing these important objectives.
Nasdaq, therefore, in addition to applying the enumerated criteria set forth in the Rule 5000 Series, has broad discretionary authority over the initial and continued listing of securities in Nasdaq in order to maintain the quality of and public confidence in its market, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.
Arckoni, I dont think Lazur meant it in a 'company' high-risk kinda way. I believe he meant it in an 'exchange listing' kinda way. Most institutional investors have policies surrounding what they can and cannot invest in. Most do not include OTC listed stocks. I think the large ETFs, like MSOS, are investing in the Canadian listed US cannabis companies, via swaps, over their OTC listed counterparts -- at least this is my interpretation/fabrication...I do not know. That is my (own self) rationale for why MSOS has not picked up SHWZ...because there is no Canadian listing equivalent. Possibly being left out because the ETFs do not want to create any additional gray-areas for their institutional investors.
The investors in that stock are shorts, day traders or meme chasers. You cant reason with the longs...and the longs dont understand fundamentals. They see bolted on revenue as success. The current temperature of the SNDL cult is like they hit the lottery with that extension notice. SNDL has only traded over $1, 65 days since a month before their first notice...spring 2020. It's an easy stock to flip because it has an emotionally sensitive investor crowd...which doubles current cannabis stock volatility. Even if you could get through to them, most cant invest in SHWZ anyway because it is OTC listed, and the Robinhood and Webull dont allow it. Still absolutely insane the amount of shares that trade, but gives me hope for the day SHWZ is able to uplist to a major exchange. Heck, I am still waiting for the day that the other cannabis ETFs finally add SHWZ to their holdings. I look at their lists and I see some of the duds they have and cannot understand why companies like SHWZ and MRMD are not on there. I often wonder if it has something to do with where these companies are domiciled because these two companies are NOT dual listed.
Ahead of the game on multiple fronts. One was centralizing distribution...I am starting to hear this as the next steps companies are taking on the podcasts I listen to. Anyway, I submitted a question regarding the Bioscience Division during the Q2 Earnings call which was answered. Again, ahead of the game:
Joanne Jobin: We've got a few questions here on the bio sciences division that we announced last quarter. How is that coming along? And are there any upcoming deliverables?
Justin Dye: Yeah. We're excited about our SHWZ bio sciences business, Jim Parco is the President that business unit. He's recently hired Remy Kachadourian and a PhD in Chemistry, as Director of Innovation and Quality.
Remy is former Cannabis Lab Director and very well-known chemist in Colorado's Cannabis Industry. So we're excited to add Remy to our team. We're finalizing the construction efforts for our experimental lab, with a completion date in the third quarter.
We're also executing a development project on single source all cannabis terpenes and a move away, additives in vape products are more natural organic product line, that we think the customer will certainly appreciate and certainly asking for.
We're also actively developing partnerships with leading academic institutions, and other R&D companies to put our heads together to continue to leverage the best ideas, to continue to innovate on the product and service side. And then we have a number of other confidential things that typically you would have in your Skunk Works that we're working on that, I think we're going to have promised down the road, but more to come on that.
Dang look at this list of additives the FDA states are not suitable for inhalation. I wonder how many other states will choose to enforce the FDAs withdraw list because there are a ton of fruit oriented terpenes on the list...and the industry is known to add terpenes for both flavor and effect.
https://www.health.pa.gov/topics/Documents/Programs/Medical%20Marijuana/DOH%20-%20Known%20Additives%20Contained%20in%20One%20or%20More%20Products%20on%20the%20Feb%202nd%20Withdraw%20List.pdf
Who knows who he is trying to please at this point. I guess he is trying to prove that he is social equity focused? Everyone knows that he doesnt have the votes in his own party let alone between the two. The whole thing seems more like a political stunt to continue to delay the inevitable...because once cannabis is federally legal it is no longer a political crutch. That is why I expect AOC to challenge him for his Senate seat, using his overly complex comprehensive cannabis agenda against him. Now I have no vote in that state, nor do I expect that if she does challenge him that she will win, but IMO her plan to decriminalize is a better first step than trying to revolutionize the entire industry in one swoop.