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I think Dye has seen that getting to Nasdaq matters little in the larger scheme of things for pot companies until there's any significant federal reform of MJ. The move doesn't justify the assault on shareholders, including them. We had 727 shares trade today thus far, that problem is not due to just the exchange, hopping exchanges won't solve it either.
what's astounding beyond the fact I'm even more pessimistic than you when it comes to government and prospects for Pot, is that a government predicated on graft and having its palm greased with cash can't get behind a whole new industry to help grease those palms, or the tax infusion that allows them to route that tax money to their self-serving cronies. I mean, they aren't even good self-centered grifters. I was really counting on that to make MJ legal, to get this industry moving. When you can't count on sin among a bevy of sinners, it truly is the end of days.
I only now got to read through the call. Debt to Equity is 1.7. While high, it's still under 2, and at this stage of the industry and its challenges with low stock prices, it's still below 2 and says to me an appropriate balance of risk due to the nature of the industry. And they're managing it well.
I also like this comment in reference to debt and acquisitions, seems to me some lip smacking going on that would make Andy's 4 stores rather small potatoes by comparison - he's not only speaking of managing debt and balance sheet but making the clear distinction between them and those who don't do that and the opportunities that can arise very quickly in the acquisition space, along with changes in their debt and equity:
"we control our destiny and there's a lot of companies that don't. And I think that as we threw this will come out of this capital vacuum, so to speak, on the debt and the equity side. And we're going to come out very, very strong.
And I think these things happen quickly and I think we'll see – we'll be more appreciated in terms of share price."
On the whole, where the industry is, how the fed is fumbling, issues with banking, I view this as a strong ER. And I'm not bothered with the impairments related to the wholesale side, better to cut and run now. And I'm better with the debt after seeing the ratio - expected in a growing industry like this for a company making thoughtful and continuing expansion.
Full Year 2022 Financial Summary:
Revenues of $159.4 million, an increase of 47% compared to $108.4 million in 2021
Gross Profit of $85.0 million, an increase of 72% compared to $49.4 million in 2021
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
Adjusted EBITDA of $52.0 million was 33% of revenue, compared to $32.2 million and 30% of revenue in 2021
Cash Flow from operations was $11.4 million compared to $8.4 million in 2021
Retail Sales of $141.3 million, an increase of 92% compared to $73.8 million in 2021
Two-year stacked identical retail sales ("Stacked IDs")(1) for Colorado and New Mexico were 7.9%
Q4 2022 Financial Summary:
Revenues of $40.1 million, an increase of 51% compared to $26.5 million in Q4 2021
Gross Profit of $23.0 million, an increase of 89% compared to Q4 2021
Net Loss of ($27.3) compared to Net Income of $12.8 million for Q4 2021
Adjusted EBITDA of $13.3 million was 33% of revenue, compared to $7.5 million and 28% of revenue for Q4 2021
Cash Flow from operations for the quarter was $5.4 compared to $3.6 million for Q4 2021
Retail sales of $36.9 million, an increase of 87% over $19.7 million for Q4 2021
Stacked IDs(1) for Colorado and New Mexico were 5.3%
no rush for the exits today, no one lining up to buy a ticket for the train either. so either no leak of news ahead of earnings, or more likely, the ho hum world of the pot market right now and the continuing lack of interest one way or another in shwz. will be interesting to see the numbers either way.
Wow, someone purchased 50 shares today...
was browsing the company Brad Stewart is on, Semper Paratus. https://www.semperparatusspac.com/about-us
Not sure if anyone commented on this background previously.
About Us
Semper Paratus Acquisition Corporation (“Semper Paratus”) is a newly organized, special purpose acquisition company (“SPAC”) incorporated as an exempted company in the Cayman Islands and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination.
if you can pull details like that 13k out of your pocket just like that, your spouse must never win an argument...
I remember issues/questions on their debt as well.
We are looking through smoky glass at night trying to make sense of these internal plans of SHWZ. Checking tea leaves, etc. Ponder and wait is my motto for the next few months.
From a regional perspective and securing full use of Starbuds as a brand, that makes sense to me. 7 locations in OK, 13 in CO, plus 2 each in MS and MO should Dye's plan be to expand eastward from CO - in a chain. But why didn't we go full in on Starbuds at the start? Available funds or other reasons regarding these dispensaries value, or at the time too disparate in location? Native Roots would be my second best guess - flesh out CO, that's his plan, and rapidly bring dispensary count and coverage up another 20 dispensaries. An additional option - do both during these troubling times in the pot world, Starbuds and Roots, if the deal could be worked, and become a CO juggernaut with expansion possibilities eastward. Nightshade fills the regional push, but in locations they have well-covered I believe already. Long Play we can get value from without merging, so low on my list of probabilities. Lowell would be large and doesn't fit the regional plan but does with the branding push. I'd put that third behind Starbuds and Native Roots.
Dye Capital does ultimately sell but my sense is we are years away from that. Would I object at 10 or 20? No. Just some off the cuff rambling per your post.
And notice, it's like this 8k wasn't even released when you look at today's trading. so if we trade sideways til then because no one's paying attention to the sector and this stock, my worries about the downside dissipate a bit. No one interested enough to sell too much at this stage except potentially the folks on here.
Well, the big worry is going private. But Dye's constant and continual references to building shareholder value would then be a lie, and I don't see that in his nature or his direction for the company. This isn't a stock whose name should never be mentioned even in an angry **HUF. We have a large war chest still, so share count increase at these 52 week low prices doesn't make much sense. It would be wiser to use the war chest to expand, increase share price from that expansion, and then potentially sell more shares to keep growing then.
Buyout is also not in his nature, merge yes, buyout no. I could see a purchase or merger of another MSO or portion of an MSO's portfolio that supports his regional plan, and the due diligence on something like that would of course be larger, more difficult and time intensive than these one-off mom and pops. That to me makes the most sense. But whom to merge with, as Dye's last interview noted, isn't easy to discern since after opening the hood on these intended acquisitions a lot of the known or published data may be suspect. So it's hard for us to pick a true winner they may be targeting. It's worth waiting it out a few more months, that's for sure.
Thanks for posting this. Great interview, I don't think I've heard him be that forceful on the failings of the Fed before, especially access to capital, but his emphasis on the potential for this business remain as strong as ever. The Fed has the industry in leg irons and yet it keeps growing, moving forward, and will continue to do so. The Fed opposition to that is irrational and for me unexplainable.
not sure of the point here regarding SHWZ. Are you suggesting SHWZ will be looking to go international in the near future, or that Germany going green will have an impact on the general pot market in the US? I don't see that occurring in either case. The remaining comments don't apply to a stock message board, sorry.
I haven't seen an official date. I was leaning toward 100 stores as well, thinking that revenue number would put them in a position to begin pay down.
In the short term, does anyone have a sense at what point they think SHWZ will start paying down the debt? A threshold that they may need to cross - 70 stores, 100, stores, certain revenue targets? I think when SHWZ states in an ER that they've begun reducing the debt by x percent and guidance on being debt free that will drive the next major move. Just acquisitions alone won't do it, even growing revenue numbers haven't done it, so far.
I don't either, I think he bought because he has and wanted to show faith in the stock. I have the same faith.
As we saw previously, Dye's purchases helps over the short term if one can time the buy and flip, but then back down we slide on this trickling volume. I've never been great at timing, so I don't often do those plays. And now we're back in the spot where we'll be around a dollar a share soon and should any good news arrive, and say we get a 20% run, we will still be below where we are today. Maddening how many times that's played out here. Still waiting for that time where there's continued faith in this stock by the market, but with pot the red-headed stepchild at the moment, not expecting that confidence any time soon.
I agree this will continue to trickle down in March, probably to a dollar on low volume each day. Earnings them come out, and like Doc, expect a loss, so sub-dollar after. The big question is do I believe that enough to take some shares off the table and buy back in in April?
In the end, this sector meltdown adds a pervasive stink to every stock in the sector, SHWZ included, and though it may not fall as far, I don't see any rising soon. Hate having my money just sit here dawdling about.
I'm glad Dye's playbook is tight as to what constitutes a good acquisition and they don't chase anything just because it's cheap or they want a foothold - it has to be profitable. That said, they're going to rebrand what they buy, move in their stock of products, so as long as its only cosmetic related upkeep, that's doable and less costly. I bet a lot of dispensaries are falling into disrepair these days...
Too funny, i think we're all looking at the medmen article thinking the swapping out of a vowel may be in order for some of those assets that they are selling. Though I still think it's a bit too soon for JD to go to a new state with areas in CO and NM they can pick away at first.
one other angle not so far discussed here is this - it's not just who is joining the SHWZ executive team it's also how few are leaving. There's a lot of chair dancing going on, SHWZ is a place people are choosing to go to. That says a lot. Retaining top talent is never easy. So far, that's not been an issue here.
between veteran's health and gun access, the opposition to MJ may die by a 1000 cuts over time. chip away slowly, if the big steps can't be taken. May not be sexy, but I would prefer more premature legalization over that... Maybe Dodge Ram can do a commercial for the MJ crowd...
It will be - I like how it puts the senate in the position of either discounting veteran's health outcomes in service of prurient notions about pot, or that the veteran's health trumps those prurient notions. Nice way to crack open the door in the senate.
I was just looking at the same LinkedIn for Shaw. Did you see he's noting a dispensary in Las Vegas for sale in a solid location for 3m? May be good to watch his LinkedIn space to see what's being posted for NM and CO and any surrounding states.
A bit of a broad brush, and though I've never forgiven Baltimore for killing Edgar Allen Poe, it's not all as bad as you state...
I do like that SHWZ is up after Canopy put a dark shroud on the sector today, and I expect Aurora to continue that trend. But what is getting clearer with each of these earnings reports is the great gulf between the truly badly managed MSOs and the good ones like SHWZ. So the more blood I see from the Canopies and such, the better SHWZ will look by comparison, even if they merely hold their ground in the next ER.
thanks!
if they are close to SHWZ maybe shwz is the reason they're not profitable? Would be a nice validation of their model if that were even in part true. Beat your competitor, pick over their carcasses and keep expanding.
Maddening for sure. I sit here typing into my typewriter a la Jack Nicholson in the Shining:
SHWZ doesn't need SAFE to be successful
SWHW doesn't need SAFE to be successful...
The problem is, the mj segment does need some kind of positive news to bring investors back in force.
I guess we see what SAFE banking means to Republicans as well - letting medical cannabis patients purchase firearms. I guess if the patients can arm themselves with AK47s they can also serve as sentries securing these cash-based MJ businesses by moonlighting as sentries at the door. Part of the Law and Order push they are doing apparently...
But hey, let's have all that cash trading hands and being moved about to entice crime and not address that.
The year is starting off as about as well as expected for the sector...
You're right, Big Tomato and Success don't have the current MJ challenges. We should see a significant ramp up in brands on shelves in our current stores in 2023 I suspect, especially the higher rated ones in each state. We should see those shelf items continue to expand.
I like the idea of potentially using a non-THC product to get the Schwazze name out there, making inroads into minds and markets, for the future hope that THC based products can be shipped, sold, and marketed in a similar fashion. I'm not a big CBD fan - just doesn't do much for me for example - but thinking a product like that or success nutrients and growing pot becomes more accepted and commonplace could be the Trojan horse of marketing for Shwz as long as interstate hurdles and advertisement issues impact THC laden products - lay the groundwork, get the name out, get the channels going, within the states we operate build that house of brands, our generic brands, and be ready for future changes to interstate commerce and pot marketing.
I guess it's one of three options:
1. Expanding SHWZ to other states is not far off.
2. There's confidence that shipping across state lines may be possible in the foreseeable future.
3. Both.
Regardless, establishing brands that can become national and being ready for either option above is the smart thing to do when those floodgates open.
Is this the first time (at least I think it is) that they mention National and not just Regional?
Pear's focus will shift to optimizing our commercial footprint on a national scale while driving our core brands to the next level.
Low volume day again. I was hoping post tax selling investors might start trickling back into pot and picking the winners. Not happening yet.
Thanks, people are coming around to the SHWZ model, like he says, it's not sexy, basic blocking and tackling never is, but it wins the game.
when mockery changes law Paul's comments will mean something. Until then he's one of 100 senators who couldn't get anything passed.
Well put. Let's be kind and say most MSOs are getting sucked into a whirlpool of their own making (or is that a flushing sound I hear?), and one SHWZ has avoided. Yet, SHWZ gets caught up in the sector's rise and fall, and for now, it will be a lot of fall for a while. If SHWZ makes aggressive strides as we expect in the coming months, it's still happening in a sector many have turned away from, so getting word out on those good things becomes even harder for a company like SHWZ to market its progress in a sector many are saying who cares, it's all garbage, folks have been burned. Will take some time to recover from that.
I'm back in the camp that maybe it's best if JD for a while just goes dark, work the back room and the acquisitions, keep putting the company together and maybe even forego some of the road shows etc in favor of just relentlessly taking advantage of the opportunities this ongoing crater of a sector provides. No sense crowing about how well you're doing when no one's listening and turned off to the sector as a whole.