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Y’all get the email of the closed acquisition 8K filing today after hours?
Stanley said Schwazze is coming off a strong first quarter where top and bottom lines beat his forecasts, and he said SHWZ is showing EBITDA margins that rank very high compared to the rest of the US cannabis space. The analyst said Schwazze is likely to counter ongoing price pressure by leveraging margin expansion opportunities like centralized buying and distribution, automated manufacturing and increased sales of house brands.
“Given SHWZ operates in two intensely competitive states that other operators have largely avoided/exited, we view Schwazze’s adjusted EBITDA margins as particularly impressive,” he said.
https://www.cantechletter.com/2023/06/schwazze-is-a-buy-in-cannabis-stocks-says-beacon/#
Received confirmation that SHWZ is no longer is participating in the ONE Colorado initiative.
So far SHWZ is up 2 out of 2 days after Dye’s announcement.
I just sent SHWZ IR this email:
Dear SHWZ IR,
At the last shareholder meeting in December, I raised a question surrounding SHWZ’s ESG policies.
Yesterday, it was posted by Star Buds on Instagram that Star Buds is giving $1 of every pride joint sold to ONE Colorado, a C4 political action organization that is not tax deductible.
ONE Colorado supports allowing biological boys play in girl sports and allowing boys to use girls bathrooms in schools; and they fight for these positions politically. Source1: https://one-colorado.org/wp-content/uploads/2017/06/TransResourceGuide_2016.pdf
Source2: https://one-colorado.org/lgbtq-issues/safe-schools-colorado/
This is a terrible partnership.
ONE Colorado has a C3 tax deductible sister organization that is 100% educational that potentially would have been better, unless they educate the public on said concerned topics in this email.
I understand the importance of teaming up with these types of organizations to boost your ESG score; however, this topic will cause major backlash and you need to be way more careful on who you team up with.
Thank you,
Future2016
Shareholder since 2019
Since you’re so mad about it instead of viewing it as a buying opportunity, I’m not so sure why you’re still invested.
I hope Dye doesn’t hit the circuit because he already tried doing it and it didn’t help the stock price. I hope someone who is willing to give more teasers than Dye hits the circuit. This sector loves to invest in things to come, and Dye held everything close to the vest without teasers. The only thing released under him that the company fulfilled was revenue and guidance numbers.
The guy really hasn’t been on board for that long.
Well, the stock price is up today.
I actually am not even sure if Nirup is going to be the final CEO over the next 3-5 years. I believe these guys were originally brought in to roll up Colorado and play in the background but found the companies that were going to be rolled up weren’t what we were being told and then they decided they needed to temporarily take over and will find qualified replacements over time.
It’s actually concerning that a lot of people on this board refuse to see any positives and have just posted negative stuff for months.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
“Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.”
“A public-opinion poll is no substitute for thought.”
“If a business does well, the stock eventually follows.”
Warren Buffett
I agree. And Nirup tends to give more info than Dye when on calls.
The board is more powerful than management.
I do believe Andy Williams proved that IR and constant interviews by penny stock outlets pumped the price.
I’m really looking forward to the licensing agreement to end.
If I had the money, I would be buying. It’s be the cheapest price I’ve ever bought at. It would bring my avg down. Shwz has the best management team in the industry and is extremely well positioned to continue growing and also for when safe banking passes.
Great idea.
I did not write this. Someone else did.
While Schwazze's calculation for Free Cash Flows is accurate (really unlevered free cash flows is specifically what they are calculating) and was stated at $2.7MM for the quarter, there are better versions of that calculation which provide a clearer picture of the cash flow generating power of the company:
Let's examine two of the fixes:
1. Working Capital
Their method does not backout the changes in working capital and, in this case, over penalizes the free cash flow figures by treating the buildup of inventories, prepaids, and accounts payable as recurring cash flow items. Q1'23 is the period of the year where Schwazze builds up inventory for Q2 and Q3. For understanding the standalone business, one would argue that these should be backed out and treat inventory as stabilized so as to not create noise around the cash flows.
2. CapEx
Schwazze deducts for all of CapEx (i.e., Purchases of Fixed Assets) vs. just the Maintenance Capex. Since a majority of the "Purchase of Fixed Assets" is associated with Acquisitions and Buildouts and new developments this grossly overestimates the Maintenance CapEx needed on a recurring basis.
When you adjust for both of these items you will see that Schwazze generated well over $10MM in true Unlevered Free Cash Flow this quarter (in what is generally considered the weakest quarter of the year).
As we enter into Q3, the working capital situation will reverse as inventory and prepaid asset levels will come down and this will free up cash to be used in more acquisitions in Q4.
Overall, I expect true unlevered free cash flow levels (adjusting for and stripping out changes in working capital and only deducting maintenance CapEx) for the year to exceed $45MM, with Levered Free Cash Flows (after deducting for the cash portion of interest expense) to come in around $20MM.
This leads to a double-digit free cash flow yield (regardless of whether you calculate it on a levered or unlevered basis with the convertible debt).
I’m guilty because I did not post today, but we should have generated more posts in here from today’s quarterly report. It was perfect.
The form says for acquisitions.
I argue the banking crisis puts more importance on getting the safe banking bill passed so banks have a newly added revenue source to help prevent them from going under.
I absolutely love this addition. I wanted to buy slang because of him but never did. Makes my investment here even more special.
The weather was bad when I went to the shareholder meeting last year and I think the weather was bad the year before that as well. I know Berkshire has their meeting in the summer time. It could just be the weather.
Well, I’ll be dammed. They are not voting to increase share count at the annual shareholder meeting coming up.
The previous nm acquisition had 0 shares involved.
Denver Nuggets can now partake
More than 47,000 Texans are enrolled in the Texas Compassionate Use Program. Richardson said that number is far lower than the number of Texans who could benefit from it.
“Florida has 700,000 patients in their medical cannabis program. Florida is 20 million people. We are a fraction of the size because our conditions are unnecessarily tightened at this point. And we should expand the condition list,” he said. “HB 1805 actually does a very good job of getting a big step closer to having much better access for patients across across Texas.”
Texas Agriculture Commissioner, a staunch Republican, has long been a vocal proponent of the crop.
https://www.kxan.com/news/texas-politics/texas-house-moves-toward-medical-cannabis-expansion/amp/
Texas just had a medical cannabis bill move forward out of committee. Now either the house or senate will vote on it if the senate president or speaker of the house allows a floor vote. If the floor vote doesn’t happen, it’s dead. If it does happen, and it passes that chamber, then it goes to the other side, either the House or Senate, whichever it did not start in. Then, hopefully, that leader will allow a floor vote and it gets passed. Then it goes to the Governor’s desk for either a signature or no signature and it passes into law or a veto.
They have been fighting for years for this bill.
These guys are looking to make a lot more money than this. They are all down on their investment at this price.
The preferred shares, which is the best deal are $1.20 per.
Dye invested millions of dollars for options that have expired. He still bought millions of dollars of shares on the open market the year the options expired.
The $100m loan was made at $1.85 and converts at $2.24 and we are under $1.10 hahaha
These guys are down millions of dollars.
I also believe they are going to increase the share count, but I believe they are going to increase the share count to expand into another state, hopefully Texas.
Okay. You list 5 options instead of 4.
The question was posed as a refinancing option based on paying off debt.
I actually believe the lower basket size is tied to the deflation seen in the cannabis industry, but the reduced visits from customers is from inflation.
They literally gave 4 different ways to use the money.
No, they said it was one option but they were looking to refinance.
Obviously you’re not listening to the same con call I am.
Nice! Thanks for sharing. Great article.
Lol. We’ve been in a downtrend since the end of November.