Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Regarding the companies, the highest selected rating for all of the companies was the 1 star selection.
The saddest story of the cannabis industry, IMO, is the one Alan Brochstein has been pushing for a while...GNLN. If you look at its 5yr the stock is down 99.99% which is worse than <<<insert pick here>>>...but includes CGC, ACB and MMNTF.
Someone is buying. Up over 29% in the last 5 trading days and MSOS hasn't added since their initial position (unless it's the swap and MSOS hasnt acknowledged it yet).
Was curious, went to Indeed and saw that the score was 1.8...however this seems to be on par with all the other cannabis companies that I looked up.
That graph also shows that DehydraTECH delivered more of the drug compared to the 7mg control...meaning it would take less drug, than the 7mg control, for DehydraTECH technology to deliver the same return.
One of the other "concerns" that I have seen posted online is fear that SHWZ is one of the top companies, based on debt, that will need to dilute to raise capital. Whether or not this is true...because, if memory serves me correctly, debt is due is Dec 2026 (a year that some of the other companies in the space have announced as their recent 'pushed' debt due dates). The fortunate thing is the company is currently only authorized to issue up to 250M shares. Some of the other companies on that made the list dont face the same cap constraint. So at this point, I am just trying to hang in there knowing that the company wants to grow responsibility (which will include shares), but hasnt yet put up increasing the O/S to a shareholder vote...which should give some credit to their want to uphold shareholder value.
Would not surprise me one bit if the push for kiboshing home grow is actually being funded by the MSOs operating in the state. They have been controlling the ear of the PA legislature, especially with (medical) home grow...so no shock to me if they are also secretly backing the push in a neighboring state. Anything to protect profit.
Up 23% on 2x the 65 day avg volume...and like $50K-$60K in trading. Wonder what could/would happen if we saw the $3M+ the tier 1 MSOs see?
Then if they find efficacy in turning Ozempic into a pill...<<<insert rocket ship emoji>>>.
I get the concept of swaps. Not holding the asset, directly, but holding the company that holds the asset...thus allowing them to be listed on a big board. Scary that if you buy MSOS you aren't owning the shares but the paper that says the entity owns the shares. I also hate the idea that the ETF is levered...in an industry that is out if touch by most institutional buyers. Makes for some crazy swings...to which MSOS does most of its buying/selling in the last 30mins of the trading day -- if not last 10mins. Good when times are good...tough when they aren't. Just dumbfounded on how the swap could be buying shares for a period of time but MSOS not divulge the ownership until yesterday, unless the swap operates independently of MSOS. They must collect shares with their own funds and then MSOS eventually pays/claims ownership? Which is kinda scary if you they are independently buying/selling, if you are an MSOS holder. I guess my assumption was always that the money put into action by the swap is really MSOS money and therefore reportable by MSOS at the time of purchase/sale.
Just a little confused on how they picked up 800K shares, when Yahoo US shows 30K and NEO shows 3K....plus we have seen what happens when there is buying (Dye's last $1M spend).
MSOS added 800K shares of SHWZ.
This was a good summary of the conference call:
https://www.greenmarketreport.com/schwazze-narrows-losses-in-q3/
A lot of good in what was being said...and knowing margins would slip with the growth, I was shocked that the expense was not larger than it was when this was mentioned:
"Operating expenses rose to $12.5 million, up from $11.4 million last year, reflecting costs associated with operating 28 additional stores in Colorado and New Mexico." --That's not even a $40K increase per store!
My only two (initial) negative takeaways:
"The company’s financial position also showed a decrease in cash and cash equivalents to $19.6 million from $38.9 million at the end of 2022".
However this was really only a cash decrease of near 250K since the "cash" position reported in Q2 earnings ($19,872,099).
And, as mentioned to StevenRisk more so as potential buying opportunity:
"CFO Forrest Hoffmaster noted that the company is working to optimize its inventory through an ERP implementation, which is expected to lead to inventory valuation adjustments by year-end."
Better results than I expected, for sure, but I need to review the conference call. There was mention of transitioning to a [supply tracking] platform...that sounded like it will include an upcoming "one-time" write off.
I too hope SHWZ can show that they were able to maintain margins through these tougher market times...and especially in CO and NM. The same cannot be said with the two, same tier, companies that just reported (MRMD & P13). I really hope this isn't a sign of what is to come...and really concerned because SHWZ doesn't have the benefit of the new markets that recently opened to offset the struggles.
Sadly, here is when I went negative...add in the lack of metrics on their past earnings calls, them changing PR companies and skirting around answering my inquiry has caused me to lose faith in this company being any different than the other MSOs out there...if anything they are growing into being just another MSO out there. I think as time goes on, and the market cap continues to dwarf their annual revenue, I too could see them taking the company private and screwing over any shareholder with an average above the buyout price. This move to being private alleviates the SEC reporting need (imagine how many times they wouldn't have had to tell us who has decided to move one) while at the same time opens the door to various avenues that the other private cannabis companies use to circumvent 280E tax code.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172847095
While I still want to justify my previous comment about liking the company "operating and proving themselves in the foxhole"...as a long term success story for when the industry normalizes...I truly question when "normalization" will ever, if ever, happen. Obviously the longer it takes the less appealing SHWZ looks in comparison to the other MSOs operating in markets where the race to the bottom is delayed due to state protection/limited competition. and/or growth into markets chasing the medical to rec flip.
There has obviously been a disconnect with the industry via social media echo chamber as compared to reality. I have spent a lot of my time trying to learn the other side....and unfortunately, in doing so, it hasn't strengthen my long term outlook for the existing industry. The only thing that I continue to fail at is the timeline of events; today, tomorrow, 5, 10, 20 years from now....and believe that there is still wiggle room within the current operators (and possible/potential catalysts, who knows) until that timeline becomes clearer.
I know my thoughts around Schedule III are in the minority, but with the excitement around removal of 280E...I honestly see it as a rug pull for the industry we know of today. The government appears to be focusing on increased research. Focused on cannabis "medicines" via FDA approval and pharma....and I think it will be a cold day in hell before the government/medical community ever accepts 'combustibles' as a successful form of treatment. Now the runway could be 20 years long...and I don't think one could ever remove the form of smoking from cannabis consumption...but what we have as a comparison is the tobacco industry and their (combustible) trajectory. Technically, the government could force smokables back to the illicit market by cracking down on legal products/operators. Another growing concern of mine is the psychoactive hemp derivative, legal, NATIONAL, direct to consumer market...the industry could continue to backslide even if most of the top-players are chasing growth via protection.
Call me Pessimistic-Pete. I will try to limit any additional negative rants...while hoping for best to (at least) breakeven than watch from the sidelines.
Some other, probably stupid attempts at prediction....Ohio (just barely) passes rec via ballot today eventually forcing the hand of Pennsylvania. Pennsylvania will show that there is a way that the government could oversee this whole process by forcing state run testing and retail. Florida will somehow manage to fail to pass adult use, whether it be shot down and never coming to vote...or coming to vote but not getting the 60% necessary to pass.
On November 2, 2023, Medicine Man Technologies, Inc. (the “Company”) received notice of the resignation of Jeffrey Garwood as a member of the Company’s board of directors (the “Board”), to be effective upon the Board’s nomination and appointment of another director to fill his vacancy. Mr. Garwood was a member of the Audit Committee and Compensation Committee of the Board. Mr. Garwood’s resignation is not the result of any disagreement with the Company on any matters relating to the Company’s operations, policies, or practices.
On November 2, 2023, the Board appointed Kathy Vrabeck as a Class A director to fill the vacancy left by Mr. Garwood. The Company expects that the Board will appoint Ms. Vrabeck to one or more of the committees of the Board; however, no committee appointments have been determined at this time. Ms. Vrabeck will serve until her term expires at the Company’s 2024 annual meeting of stockholders and until a successor is elected and qualified, or until her earlier death, resignation or removal.
The Company’s current director compensation policy is to award each non-executive director (i) an annual grant of shares of the Company’s common stock worth $70,000 and (ii) an annual award of $35,000, payable in cash or shares of the Company’s common stock at the option of the recipient director. The Company expects to make such awards to Ms. Vrabeck in the future, but no awards have been granted as of the date of this report.
Makes me also wonder if we will be hearing FDA IND news sometime soon.
Had this been TLRY or some of the others, the news would have been treated like hot off the press, front page news, dropped during peak time like it is the most revolutionary idea since sliced bread. But really, was it even news though? Good to hear that more of their own product/brands will be prioritized and on display in their own dispensaries...anything to help revenue. I remember Dye once said that they would stock 35% of their own product. IMO this PR is really just a savvy stepping stone to act like the other MSOs in limited markets. Those MSOs only really sell their own product...and in places like Florida, are forced to. More 'own' product sales offer the best return/margin. Definitely not shocked if this is eventually carried out in the other stores, like Everest/Greenleaf SWAS; and vice versa, because it not only prioritizes, but draws attention to (probably already) stocked product/brands...treating it like it is 'extra special'...and still gives them a way to appear to the cannabis community that they diversify.
Here is my current 'red flag' that I am trying to overlook...while secretly keeping my fingers crossed that the trend reverses. Normally, one would expect the opening of new stores to reflect higher revenues...and in the greater scheme of things they probably do. But, I started tracking Everest's monthly store totals prior to the acquisition closing June 5th. The daily sales amounts, for both R.Greenleaf and Everest, have been in a constant decline since I started tracking both April 2023. At first I attributed it to higher statewide store count, but the data isn't lining up:
I respect your opinion. I am just taking a more cautious approach...thirsting for more information before matching the rocket ship emoji's, and the timeline, seen on other social media platforms. I too think it is inevitable, in years, but what will it look like is the question. Rest assured, if the govt is involved, in the end, it probably wont look anything like the industry that we know today. I have my list of questions/concerns...and then a lot of me wonders if the DEA will use this opportunity to 'have their cake and eat it too'...and treat it like Opium; keep raw formats: flower, extracts and resin at schedule I, and add/schedule derivative formats at lower levels; cater to the pharmaceutical industry. Consider me a 'tinfoil hat' type on this situation. I see it as a baby step forward...but what's the catch? There is obviously a reason they want it scheduled...if not, the easiest solution would be for the govt should just deschedule it and leave the decision to the states (impost an excise tax and call it a day). I can also see, if rescheduled, and federal 280E removed, that states might do two things: (1) new states might now have cover for not wanting to move medical, or AU, because the govt just put the industry in the hands of prescription medications...let the doctors decide what is best for people/patients (state tax revenue being the obvious defense for this not happening). Or, more likely, (2) states see 280E federal tax removed and they quickly impose an excise tax because they too are aware of the new found revenue coming to these operators. Anyway...long story to say that I'll be curious to see what happens...and speculating all the way until there is an answer.
Yes, everyone has an opinion. The presentation tries to answer several questions, to the best of their ability, while also speculating...best I have heard on the subject. I personally am stuck weighing 'political influence' with 'international treaty'. Feeling like if the DEA goes along with it...which I don't think that they will...it is clearly for political theater and to be kiboshed later, post election. If the DEA steers clear of the political theater, which one would hope from an independent govt agency, they keep it at Schedule I. Their defense is international treaty and biding time for the recent research bill/changes, and the new DEA approved cultivators, to come to fruition.
There is an interesting, and informative, presentation on YouTube by Americans for Safe Access called 'Cannabis in Schedule III?' Basically they sum up the DEA days to respond as, whenever the DEA pleases. Fortunately the DEA has some political pressure so maybe it will be done sooner than later...but the last time that they reviewed rescheduling cannabis it took them 18 months to respond. AND THAT IS IMPRESSIVE considering the first time that they were asked to review rescheduling marijuana was in 1972...and they didn't provide a response until 1989 (probably also politically influenced...so cannabis has come a long way).
Not trying to nitpick...but because I remember thinking the same thing about the presentation. Inconsistencies. Then after looking deeper I noticed that the information on the 'inconsistent' slide(s) was data date-dependent. For instance, the slide 9 footnote is thru Mar 23.
You're right, given the insiders that hold this stock, the decision is already made. We both know dilution is gonna happen, because of what you said, let's hope they pair it with FDA IND news and take it at the highs. The problem is that adding an RS is not a vote of confidence to anyone holding this stock. It is more an indicator that things aren't progressing as smooth as the company is trying to portray (and not because they can't control the 3rd party stability testing...but as an "in general"). They keep saying we have enough cash for a year. Then they say we need to raise for additional testing...they do it and again say they are good for another year. But now this? Where are all the interesting parties in licensing this? I am obviously waiting for the IND news...but I am really hoping that the govt reschedules cannabis and forces the hand of some pharma company to buy them out, given their patent portfolio and vast CBD research.
Wanting the ability to RS versus needing to RS to stay on a major exchange are two different things. The last RS was a necessity to uplist to Nasdaq, that was an easier pass because shareholders were under the impression that institutions would invest (some have...but is hasn't helped the stock price) and that the company had deals lined up (???). Now what is the reason? They are acting like it is to maintain the listing...but it really isn't. It is for them to maintain a stock price that they think is inticing to institutional investors. What I don't understand is why they feel the need to get an RS on the books? The last RS was a 1:2 to 1:30.. and they took the full option. This time they probably will do the same. Seems like an easy, dilute the pig and then sweep it under the rug. The company is supposed to be in their best position, have this pending IND, several other irons in the fire, etc...I mean the US govt could even reschedule cannabis! If they become out of bid compliance they can delay/extend for up a year after being out of compliance before needing to RS. Do they not have enough going on in the next year+ to, organically, lift the stock? Requesting this RS seems completely out of touch and is a giant red flag...compared to the company news that they have released. What are they hiding? What aren't they telling shareholders (besides the constant need for money to research)?
I think a weighted approach is a good way to evaluate these operators...but I think what needs to be included in the weighting is operator margin based on price per ounce, or pound, in the states of operation. It is obvious where 'cost compression' will eventually settle, and because of this, I think operators making margins...or are operationally profitable...in highly competitive states with basement pricing need to be valued higher than the ones operating in limited licensed markets with 2x-5x that flower cost. The problem is...until the retail investors force/push MSOs/SSOs to report/breakout earnings by state of operation (which will never happen because 'top tier' operators would never do this) then retail investors will be left best guessing which companies are good investments -- or even worse, left taking 'advice' from industry analysts.
The napkin math was the highest level simply based off the market share, per state, values given in the presentation.
Just some napkin math using the slide in the presentation that indicated an ~8% market share in CO and ~10% market share in NM.
WestWord estimates the 2023 CO market at $1.56B...and NM is an approximate $45M monthly sales. So far in 2023 the company has posted revenue of $82.4M.
CO second half estimate is $780M; 8% is $62.4M. NM second half estimate is $270M; 10% is $27M.
That's $89.4M in revenue for the remaining 6 months. Approximately $44.7M per quarter in revenue.
And a total annual revenue of $171.8M, which is a 7.8% YOY revenue increase.
Looks like Goodness Growth is no longer a competitor in New Mexico:
On June 23, 2023, the Company divested all the assets and liabilities of Red Barn Growers, Inc., a New Mexico nonprofit organization effectively controlled by the Company’s subsidiary company, Vireo Health of New Mexico, LLC, to 37 Management Group, Inc., a New Mexico corporation (“37 Management”). As part of this transaction, the Company is to be paid $1,000,000, less cash on hand of $60,814, of which $439,186 was paid at closing, and $500,000 is to be paid within one year of the close date. Consideration received was less than the net book value of the transferred assets and liabilities of $3,848,943, resulting in a loss of $2,909,757 which was recorded in the consolidated statement of loss and comprehensive loss for the three and six months ended June 30, 2023.
So far the highest Q2-23 reported aEBITDA as a percentage of revenue reported out of the tier 1/2 companies. Cresco, ColumbiaCare and 4Front haven't reported...but I am certain they will be laughable:
GTBIF - $76M, 30% revenue
TCNNF - $79M, 28% revenue
VRNOF - $72M, 31% revenue
CURLF - $70M, 21% revenue
AAWH - $21.3M, 17% revenue
TSNDF - $12.8M, 18% revenue
JUSHF - $12.6M, 19% revenue
MRMD - $6.3M, 17% revenue
SHWZ - 13.8M, 32.6% revenue
Hopefully that is also some sort if discounted price considering, from what I think I remember from a podcast, we are also the company (Mesa Organics) that Tella Digital used to enter the industry...and to prove their technology.
Dang, just saw that the cannabis ETF PSDN is shutting down (Aug 25th). That goodness they arent holding any SHWZ.
So may mixed feelings when I saw this...but, yes, the first one was 'the gift that keeps on giving'.
The hardest part was getting through all the Q2 share issuances before stumbling into this.
Overlook the 16,662,583 shares issued for acquisitions (Urban, Smokey's, Everest and Akimbo) there were still -- for the quarter, for "Service on the Board", 684,981 shares issued
______________________________________________________________
Just for the heck of it I went to Yahoo and pulled the Historical Trading volume for the quarter -- 2,179,500 shares, for their OTC listing, and 189,765 shares for their NEO listing -- 2,369,265 shares traded.
All good points by both you, Doc and lazur. I was disappointed with how vague, and vanilla, the call was. I was disappointed by the Q&A...is anyone else starting to feel like this is becoming deja vu? It's like the same questions every quarter with a slight change to make them feel current. The whole thing was like a looming gray rain cloud...and maybe that is just NK. I mean, IMO, out of the entire call, the best part was the long term bullish commentary conveyed by JD, near the end.
I don't like the increase in debt from $127.8M to $155.4M
I don't like that the cash position was essentially halved...and they keep entertaining questions about store growth to 100 in CO and similar in NM -- LIKE WE CAN AFFORD IT RIGHT NOW.
I wasn't pleased with the stock compensation...but excused it as recent growth (Akimbo, Everest), just like I did with the increased OPEX.
I submitted 3 questions (going off memory...so not exact wording):
What is your production ratio to shelf ratio, per state, and what is the target ratio?
What are the transaction counts and basket size, per state, and how does the basket size compare to the state average basket size?
Why does the New Mexico dispensary site display 57 locations (41 RGreenleaf and 16 Everest) when the company states there are 33? Are these in the pipeline, transfer locations, lounges, or something else. --I have to check the transcript because there might have been some bread crumbs dropped surrounding this. Something like multiple licenses needed per the location for med/rec (not sure).
If I was to have a positive takeaway, it would, again, be the margins. aEBITDA was above 30%..BUT BUT BUT...the gross profit margin increased! NK make the comment that CO flower price was up for the first time in 10 quarters. It is up to just a smidge over $700...but then there were other 'in the trenches' pricing given:
If the company can set an company, and INDUSTRY, record gross profit margin while competing in markets where competitive pricing is at the bottom of the barrel ($4/g was also reported in Oregon in March of this year) it has to be (only) up from here, right? The second flower prices restore -- and that is assuming that they do, to around double where they are currently -- and the operator-to-market-demand right sizes (we have seen a downtick of dispensaries in NM from June to July, plus NK said on the call that CO trimmed licenses from 800 down to 700). It's those days that I look forward too...and hope to come (sooner rather than later).
Also, IPS, just a side note, on the call they mentioned Akimbo was their play at the "lower margin" CO medical market -- which they see as $200M per year. So I guess this is the 'take a hit to make the play' opportunity.
This call couldn't be anymore vague. Hopefully they answer my questions.
I am with you on the revenue, and really the rest of the values seem on target.
If I was simply going off of a 'my feels like', my aEBITDA's a little lower this quarter ($13.5M -- but also depends on what they determine to be 'adjusted out')...and, although they have been pretty consistent with a 56%+ gross profit margin (Q4-22 and Q1-23), I think that there will be a slight dip in this area due to competition/oversaturation of the NM market. I also think that Everest isn't as efficient, which could also cause a temporary tick down. I expect it to be over 50%...guessing it is between 52%-54%.