The dark side
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We use orders here because it the only thing we can track because we don't work at Tweed. That being said the order numbers have accurately predicted revenue within a few 100k since 2014. So we have faith in those numbers here. Although now things have become tricky because they have international sales that have no way of being tracked.
I believe I read January 27th but Don't hold me to that because I can't seem to gind the article I read it in.
Average order numbers you could use this to calculate a new number. I never did yet because I believe the numbers will be distorted because of the lack of product the last quarter or two.
But before that Canopy had sales of 7 million. I believe the quarter started with 11,000 patients and ended with 16,000 Canopy was adding patients at 1,500 per month. So over the quarter the average number of patients was around 13,250.
7 million rev / 13,250 patients = 528 per quarter or $176 per month.
This correlates well with the average gram per use of 1.1
$176 per month would be 25-26 grams per month very close to gram a day average prescription.
So I think based on the cross references you can roughly use that number. The next time I would personally calculate this number again would be after a full three months of selling product from the greenhouse to get and clear picture.
It's going to be pretty tough to cover the short positions here. Other than 001 anonymous seller which is obviously a short seller watching the trades go through, there's not man sellers. 001 covered and was on both sides of the trade when the stop losses got hit at 9 so looks like he/she/it started to cover there. I'm starting to feel like we're sitting on a short seller volcano here. I hope I'm right. There's also the possibility that it's a black hole lol. Nothings wrong with the company, it's a growing (20-40%) every quarter. One year Price targets are $12-14.50. I believe those price targets are conservative and almost all are based on Canopy having 140 million in sales 2019. I think they double that. They'll be at 75-80 just this year. Who thinks they make more than 60 million in the rec market to surpass 140 million. Good to keep these things in mind. Enjoy the new year I'll be back on Canadian soil in 24 hours and with me the force which will make this rise like a viagraed out 8====3 peace
It's going to be pretty tough to cover the short positions here. Other than 001 anonymous seller which is obviously a short seller watching the trades go through, there's not man sellers. 001 covered and was on both sides of the trade when the stop losses got hit at 9 so looks like he/she/it started to cover there. I'm starting to feel like we're sitting on a short seller volcano here. I hope I'm right. There's also the possibility that it's a black hole lol. Nothings wrong with the company, it's a growing (20-40%) every quarter. One year Price targets are $12-14.50. I believe those price targets are conservative and almost all are based on Canopy having 140 million in sales 2019. I think they double that. They'll be at 75-80 just this year. Who thinks they make more than 60 million in the rec market to surpass 140 million. Good to keep these things in mind. Enjoy the new year I'll be back on Canadian soil in 24 hours and with me the force which will make this rise like a viagraed out 8====3 peace
Given an average order of around $175 ( although I haven't updated that number for 3 quarters) that's quite good for one day, really good, 260,000 k in one day. There must be a surge in demand for that day because that would be 23 million per quarter. We'll get there one day but unless something drastically change I don't think we're there yet. I think we're between 500-1000 now. It's been hard to tell because of supply shortages. 1500 orders in one day is very impressive if that's true I hope it continues.
It's Time To Buy The Canadian Cannabis Licensed Producers
Dec 27 2016, 10:47
Includes: ACBFF, APHQF, LXRP, MQTRF, OGRMF, PRMCF, SPRWF, TBQBF, THCBF, TWMJF
Summary
The Canadian Marijuana group and the Licensed Producer sector have both reached a typical buy point based on the magnitude and duration of the correction since the U.S. Presidential election.
I have updated the chart based on the % decline from the post-election closing high and ACBFF, TWMJF and OGRMF rank as most attractive. My choices are TWMJF and OGRMF.
I also created a new chart based on the % decline from the post-election intraday high trade and SPRWF, OGRMF and TWMJF rank best. My choices remain OGRMF and TWMJF.
Ranking based on the position of % decline from the post-election closing high and from the post-election intraday high leaves the top three unchanged and OGRMF and TWMJF my favorites.
New information on Lexaria provided by a reader last week and confirmed by management strengthens the argument for LXRP. I include this smaller company among my top picks for 2017.
I believe the Canadian cannabis stocks are at a profitable price point for investors who begin to accumulate them. Let's start with a look at the Let's Toke Business Marijuana Composite Index for perspective on how the typical marijuana stock has been performing over the past three years
(click to enlarge)
This chart covers virtually the entire history of marijuana stock trading in Canada going back to the beginning of 2014. The early part of the chart catches the tail end of a hyper speculative marijuana bull stock market cycle in the U.S. This was a time when a company only had to say they were thinking about getting into the marijuana industry to have their stock price rise sharply. That level of speculation was not sustainable. Prices declined sharply in the balance of 2014. It took more than another year to wring the speculation out of the market and to quash an overly promotional environment. The 2014 - 2016 period was a time when investor psychology had to be dialed back for a serious market made up of companies intent on creating a new industry was going to emerge.
Here is a closer look at the year since then. During the past twelve months, the industry did see investor attention focus on real companies with professional management interested in building businesses based on an emerging new cannabis industry. In Canada, the main driver was the medical marijuana market serviced by government approved Licensed Producers (LP), that is, companies that had been issued licenses by Health Canada to grow cannabis for medical purposes under strictly regulated conditions.
(click to enlarge)
Here is a look at the trading history of the publicly traded Licensed Producers. At this time, 36 licenses to grow marijuana commercially in Canada have been issued. The chart shows a couple of steps up along the way. These surges are related to new LPs going public. The first was Tweed Inc. in the summer of 2014, the first Licensed Producer authorized by Health Canada and the first to go public. The next step up came in the fall of 2015 when LPs Bedrocan and Organigram became the second and third LPs to be traded publicly. During this time Canopy Growth, formerly Tweed, made an offer to acquire Bedrocan.
(click to enlarge)
This is the performance of the LPs during the past year at which time there were nine companies in the index. It was a time of rapid share price advances as successful companies began to rise to the top of the Canadian cannabis industry. The components of the Licensed Producer Index today are: Aphria Inc. ( OTCQB:APHQF), Aurora Cannabis ( OTCQB:ACBFF), Canopy Growth ( OTCPK:TWMJF), Emblem Corp. (TSXV: EMC), Emerald Health ( OTC:TBQBF), Mettrum Health ( OTC:MQTRF), Organigram Holdings ( OTCQB:OGRMF), PharmaCan Capital ( OTC:PRMCF), Supreme Pharmaceuticals ( OTCPK:SPRWF) and THC Biomed Int'l ( OTCQB:THCBF). In December 2016, Emblem Corp.(OTC: OTCPK:EMMBF) was added.
Other changes are taking place within the group. TWMJF is acquiring MQTRF, an early Canadian LP in a transaction expected to close in January 2017. At the same time additional LPs have gone or will be going public. Joining EMMBF mentioned above is expected to be CanniMed Therapeutics, a combination of LPs Cannimed and Prairie Plant scheduled to start trading shortly. This will result in a total of 11 publicly traded LPs in early 2017.
(click to enlarge)
Here is an even closer look at the Canadian marijuana stock performance plotted on a daily basis since the U.S. election. It shows the group has been in a steady decline since early November 2016. Although it appears to be a significant decline, the actual recorded loss indicated by the graph is a relatively modest 9.8%. Still it is the most significant correction in over a year.
(click to enlarge)
Here is the daily market action in the publicly traded Licensed Producer stocks in the post U.S. election period. It shows a smart rally in the first two weeks following the Trump victory followed by a minor swoon since. Overall, the group is up 9.2% since the U.S. election but down 9.4% since the mid-November high.
I had expected a stronger rally and sharper correction that would create a "sell on history" opportunity following the U.S. election in early November and the submission of the Final Report of the Task Force on Marijuana Legalization and Regulation at the end of November. (Read the full Canadian Marijuana Task Force Report) Both the anticipated rally and the reaction occurred but the magnitude of the change in both directions has been much smaller than expected. In a sense, it was a normal market trading pattern.
(click to enlarge)
The two previous charts show how conventional the correction was in terms of the magnitude of price changes. This chart shows it was also average in terms of duration. The rally lasting through the first ten trading days of November was four weeks long and was very typical. This was followed by a correction of four weeks that was also normal. If the current one week rebound lasts another three or four weeks, it would parallel what happened at this time last year. So I believe the marijuana stocks are back into a normal trading stance and I expect a yearend rally starting immediately carrying into 2017.
(click to enlarge)
This is an update of a chart I used in an earlier Seeking Alpha article.(3 Profitable Ideas for Canadian Cannabis Investors this Week) The idea is the stocks that have declined the most from their post-U.S. election closing highs are the more attractive. Of the top three so identified, readers will not be surprised to learn my picks to click are TWMJF and OGRMF. It is worth noting Mettrum is subject to a takeover offer from Canopy on a fixed ratio of one MQTRF share equal to .71 of a TWMJF share. Readers have commented they have successfully arbitraged this transaction, that is, been able to buy MQTRF at a price cheaper than buying the equivalent number of TWMJF shares directly. So watch for these opportunities if you are accumulating TWMJF. Also, I have included EMMBF to complete the list although it has only been trading since December 12, 2016 so its rankings are not comparable.
(click to enlarge)
The chart above measures the decline of each LP stock from its intraday high recorded following the U.S. election and the task force report. Again, my preferences from the top three most undervalued by this measure are OGRMF and TWMJF.
The intraday high became an important statistic because of some wild trading patterns in the LP stocks as I described in more detail in my Let's Toke Business newsletter.
"During the day, (November 16, 2016) CGC was halted a handful of times for five minutes each due to what the exchange calls single-stock circuit breakers or what we used to call order imbalances. This means there were so many bids or offerings that trading was stopped to allow traders to see what was happening and to withdraw buy and sell orders or to balance them with new sell and buy orders….On the same day, publicly traded Canadian Licensed Producers Aphria, Aurora Cannabis, Mettrum, Organigram and Supreme Pharma were also subject to one or more single-stock circuit breaker trading halts. This means that during the Wednesday trading session, two thirds of the listed LPs were halted at some point. This was not a situation of one stock with good or bad news being bought or sold by investors. It was the entire group….Of the six LPs halted during the day, only Aurora Cannabis and Supreme Pharma closed higher with gains of 11.8% and 1.0%, respectively. All of the others: CGC (-15.2%), MT (-11.8%), OGI (-11.0%) and Aphria (-8.4%) closed lower. Two-thirds of the LPs subjected to one or more trading halts on Wednesday closed lower."
(click to enlarge)
Finally, to provide some overall perspective, this chart shows the ranking of the stocks based on the average of its price discount from the closing high and the intraday high. Not surprisingly, OGRMF and TWMJF are in the top three and are my most timely buys at this time.
Finally, last week a reader provided some excellent information on Lexaria (OTC: OTCQB:LXRP). The original article can be found on my article on the company.(Lexaria - The Best Cannabis Technology You can Eat) The reader's contribution can be found in the comment section of my Seeking Alpha article (7 Winners Identified by the Canadian Task Force Report)
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Merry Christmas happy holidays Ihubbers and fellow investors. Cheers to another prosperous year and another one in 2017. Thanks for all the good DD and support this year. One love to all long and short but mainly longs;)
Here's to a 75-80 million year next year followed by by a 200-300 million year. GL
The force is with us
Damn that's a shame it's not available in the US. I'm in Taiwan right now and it's available here. Keep the link and check again in a few weeks. Sometimes they unlock or you tube. It's a vice visit and good interview with Bruce.
Well Texas, could be indoor harvest I believe, but for colardo I'm not sure. I wish they'd make some videos of their facilities and their cloning program their PHD clone employees, their medicines ect I guess that costs money to put out there and the money is better spent elsewhere right now. We'll have to wait for vice to go in there again I guess. I wonder when they shot that footage of the greenhouse. It certainly didn't look like that a few months ago when I was there. Looks like they have harvested everything and they're starting to put new stock in. It was full of 6 or 7 foot plants in November
Brilliant video. Did you see the way Bruce's eyes lit up when they ask him if they'll influence the legal rec market? Lol that's worth and says more than any words could ever... a sometimes it takes a video sneak peak into what you're really invested in to say ok Yea we're good a little reminder.
https://news.vice.com/story/how-a-1-billion-marijuana-company-is-preparing-for-legal-weed-in-canada
Listen to the last few sentences in this interview and imo you'll see where Tweed's future is. It's large scale production but that's just the tip of the company. They're in the business of selling branded products of all shapes and sizes and paying a licence fee to whoever has the best products. They'll get an amazing deal for selling these products, they have all the leverage. No where else on the planet has a market like this other than a tiny south american country. I bet Tweed gets approached by these companies everyday. They'll give up a good deal to get into the market. We got Snoop for a million the weed man of the planet. Bruce can literally put his foot on their neck and squeeze the dollars out of them for 5-10 years before they have another option. This is a unique business opportunity, sales today as we stand here of 15 million per quarter we just haven't seen it on paper yet. I'm interested to see how much they grow in terms of customers with the combined company. I think they have 50% of the market but I'd bet they are pulling in more than 50% of the new customers. Here's to Future Growth and thank you Lord for Chucks connections and letting us ride in their back. GL
Volume in MT is up, looks like the arb play is starting to heat up a bit. Although the price hasn't moved much. Got me though I'm going to nibble
The email from Bruce said that they should be releasing more details. The email stated that All ip is for commercialization by Canopy. I want to hear the words we own the patents to the technology and what percent ownership. Still, Do they have exclusive rights to sell the products ect. Will they licence them to other companies. What dollar amount or percent of royalties will canopy receive and what percent will the private investors receive. If there's anything funny about this I'll sniff it out absolutely. Even if it takes 20 emails.
News releases of late lack details. Pissing me off lately I have to write a e mail to these bastards every week. One email later and I still have questions.
Canopy Growth completes $60.01-million bought deal
Canopy Growth completes $60.01-million bought deal
2016-12-22 08:44 ET - News Release
Mr. Jordan Sinclair reports
CANOPY GROWTH CORPORATION COMPLETES PREVIOUSLY ANNOUNCED BOUGHT DEAL FINANCING FOR $60 MILLION
Canopy Growth Corp. has closed its previously announced short-form prospectus offering on a bought-deal basis. A total of 5,662,000 common shares in the capital of the company were sold at a price of $10.60 per share for aggregate gross proceeds of $60,017,200. The offering was underwritten by a syndicate of underwriters led by GMP Securities LP and Dundee Capital Partners, and including Cormark Securities Inc., PI Financial Corp. and Canaccord Genuity Corp.
The company intends to use the proceeds from the offering primarily for potential real estate acquisitions and fit-up of growing operations at such locations. In the event such potential acquisitions are not completed, a majority of the funds will be used to expand capacity at the company's existing sites over the next 12 months. Additionally, the company expects to incur international development expenditures of approximately $2-million primarily to further explore and develop international market opportunities where federally legal to do so. The balance of the net proceeds will be used for general working capital purposes, such as potential acquisitions for both capacity and brand augmentation, and related integration, and developing new product offerings. The company may reallocate these funds as market and regulatory indicators warrant in light of the anticipated legalization of a national recreational cannabis market and the ACMPR (access to cannabis for medical purposes regulations).
The shares were offered by way of a short-form prospectus in: (i) each of the provinces of Canada, except Quebec, pursuant to National Instrument 44-101; (ii) the United States on a private-placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended; and (iii) in jurisdictions outside of Canada and the United States, as agreed to between the company and the underwriters, in each case in accordance with all applicable laws provided that no prospectus, registration statement or similar document was required to be filed in such jurisdiction, and the company will not be subject to any continuous disclosure requirements in such jurisdiction.
Separately, Cowen and Company LLC was engaged as financial adviser to the company to provide financial advisory services in the United States.
About Canopy Growth
Canopy Growth is a cannabis company, offering diverse brands and curated cannabis strain varieties in dried and oil extract forms. Through its wholly owned subsidiaries, Canopy Growth operates numerous state-of-the-art production facilities with over 500,000 square feet of indoor and greenhouse production capacity.
We seek Safe Harbor
It's the circle of life da na na ...Na na
Something something something ...
It's the circle of life
I received a reply directly from Bruce regarding CHI. He said Canopy is in no way restricted from the IP or Patents coming out of the research. Just a poorly worded and lack of information news release.
Unfortunately I started accumulating too early but that's life. We'll see how it plays out. I have a feeling a lot of people have pulled out of Canopy with the intention of buying MT but they haven't pulled the trigger on MT yet. As we near the close the money will flow in or if we see Canopy posting gains money will start to flow in. GL to all of us sure could use a green day! I'm going to become a weed patient for stress after this is all Said and done.
I'm with you do or die, accumulating MT and feel like this a gift right now. By the time the vote drops I'll be all in on MT. The way it traded the past two days makes me think the deals going through. Canopy tanked and MT was hovering around $6. Canopy is trading at half price right now, but I wouldn't mind if it stays here a while until we get to top out our TFSA in Jan again. The only thing I dislike about Trudeau is the fact he reduced the TFSA from 10k to 5K
Look at all the retards (word of the day) that bought THC I think probably because of the ticker. It was the best proforming stock out of all the Canadian MJ stocks. They had no licence and an 11,000 sq foot Facility. People are dumb as hell the weed ticker may help indeed although I agree it leaves a bad taste in my mouth. I'd rather see them be a professional company and keep things professional a weed ticker it the equivalent of the neon cannabis leaf store or the hippie flags.
This website has been slow as hell for me? Can't say I've been happy with the pps like to kick Bruce square in the balls for raising funds so close to the Mettrum deal. Would have made sense to raise money then closer of after the bought deal closed to release the Mettrum deal in the new year. It wasn't based on a fixed price so it doesn't make sense the way they did it. Nothing has changed with the company and most anaysts have price target much higher than today. We're currently trading less than APH if you break down the company into 3 parts. Doesn't make sense, when the market doesn't make sense just tune out the garbage and be patient and the market will correct itself. Oversold at thus point imo but we'll see. Also:
Task force limited production licences:
During the legalization of alcohol this is very similar to what happened. The government limited the amount of companies that could enter the market creating a robust industry. It looks to be happening again and bodes well for the current licence holders. This article brings up point that maybe explains why Bruce has been mentioning that Canopy will not be just farmers of Cannabis. Different licences for different parts of the business. Eventually I see Tweed sourcing their product from farmers and selling them as Tweed products. I picture Canopy as a Branded products company with and extra arm of pharmaceuticals research.
https://beta.theglobeandmail.com/report-on-business/rob-commentary/the-future-of-the-marijuana-industry-comes-into-focus/article33371448/?ref=http://www.theglobeandmail.com&cmpid=rss1&click=sf_globe&service=mobile
Lmao I grew 2 plants in my garden this summer I'm a big time green thumb and the outcome war hidious.
The Companies as it stands today is being valued at these evaluations with 120-140 million sales not profit. We're at 60 million as of last quarter yet to be released when MT shows up on the balence sheet. Canopy is going 1.5 million per quarter MT may add 500 k per quarter. That puts us at 75 million 2017. Do you think Canopy makes more than 60 million in the rec market? Because that's what we're valuing in the company at these "crazy" evaluations. What happens when Canopy doubles or triples the expected rec sales. Don't get caught again trying to out smart the market.
I haven't read anything I don't like yet almost finished the report.
Advice to Ministers
The Task Force recommends that the federal government:
Regulate the production of cannabis and its derivatives (e.g., edibles, concentrates) at the federal level, drawing on the good production practices of the current cannabis for medical purposes system
Use licensing and production controls to encourage a diverse, competitive market that also includes small producers
Implement a seed-to-sale tracking system to prevent diversion and enable product recalls
Promote environmental stewardship by implementing measures such as permitting outdoor production, with appropriate security measures
Implement a fee structure to recover administrative costs (e.g., licensing)
Regulate CBD and other compounds derived from hemp or from other sources
Let the traders trade away up and down... this chit is happening the way we thought it would. Congrats it's in the governments hands spring is coming fast.
They can sell it anywhere labels whatever age is very good 18
This is all that matters to me:
Potential boon
The task force suggested the current medical marijuana regime, set up after successive court challenges, be maintained for the time being.
In fact, it said the professional production techniques developed under the current system should be applied to the cultivation of cannabis for personal consumption, a potential boon for some producers who have been looking to cash in on a liberalized marijuana market
Agreed it's hard to believe but awareness of cannabis legalization is just slapping people in the face now. I doubt many people even know Canopy existed 6 months ago and I'd say not many know now but they will soon enough Gl DD
New analysts coming on board and it looks like the targets are all well above where we are currently GL more coverage is always good people want clarity and analysis here it comes, it's just started.
Canopy Growth (CGC-T) "new buy", price target of $14.50 at Beacon Securities
Wow research and development company in smith falls. I have to mull over this news release a bit in my head to think about how it effects the company. The first thing that bounced into my head was three conference calls ago when Bruce said he was desparate to get that new oil equipment and referenced that the US was now opened for research country wide. If we see a new cannabinoid drug come out of Canopy plus the recreational market this is going to be a beast of a stock. We have in the making a fully funded by the rec market pharmaceuticals company. I wonder how long this vision has been in Bruce's head? I bet since 2013.
My thoughts on the Mt deal are, insiders own a large percentage of of both companies. Goldman 3% Chuck Bruce ect. Mettrum shareholders won't vote this deal down, unless they have a screw loose. Canopy shareholders on the other hand have something to lose very short term. Bruce had a presentation made and I'm sure he's talked to the largest shareholders of the company. Someone bought 1.2 million shares eod before the deal was announced the next day. The news was out there by the time we heard about it, it's a done deal. We're little ants riding on large investment companies backs. Anyway wrote this: from a balcony in hong kong bottle of wine polished at 4 am sorry from grammar errors. I can still analyse the sector better than these professionals half in the bag and jet lagged :
All analyst price targets are above $13
Looking at these price targets for 2018 they have CGC making 144 million. CGC has been adding revenue of 1.5 million every quarter. They should be at 10 million plus 5 million for MT. That puts them at 60 million last September. They should be adding 2 million per quarter plus Germany sales which are unknown. By the time we get to 2018, they should be at 75 million approximately . Who knows what happens in that time but as the company stands today, it's very possible new revenue streams come online this year such as gel cap, creams, pharmacies ect . So this price target is pricing in Canopy only making 60-65 million on the recreational side of things and more on the medical side . That's capturing less than 1 % of the rec market. That's mighty conservative.
Can CGC make enough product to supply more than 140 million?
140 million is 20,000 kg's they were licensed for 13,500 kg's before the Mettrum deal and Vert and also before they expanded in smith falls where they are doubling capacity. I expect them to be producing north of 50,000 kg's before 2018. For two reasons one healthy Canada licences based on all the companies having a share. So 13,500 kg's is not capacity and second they have plans to double production by the middle of 2017 per news release. I also expect them to put that 120 million into a new facility.
So what does that do to the price targets of $13 dollars? Last time 5 they adjusted their price targets, they went from $4 to $13 almost tripling. They won't adjust them every week or month for you so you have to stay on top of it yourself. The people that sold this or missed out because of $4 price target last time got burned bad. The stock fluctuations are due to traders shorting and covering but the business is there and the money will speak for itself. Any analyst that actually covers the space with research is bullish any analyst that doesn't is bearish. The money will speak for itself eventually, honestly believe if they hit multiple 100's of millions they'll be a flood of investors that didn't give this industry a thought.
Also 12 million ebitda on $140 million is only a 8% margin before taxes ect. Their margins are 65% gross 30-40% net right now. I think they have build out costs factored in but eventually when build out is complete they will be making 42 million on 140 million revenue. It's better to be conservative and raise your price target than wrong for these guys.
After pausing to reflect on the implications of the mega-acquisition of peer Mettrum Health, M Partners analyst Mason Brown has resumed coverage of Canopy Growth Corp. (TSX:CGC) with a higher price target.
In a research update to clients today, Brown maintained his Buy rating on Canopy Growth, but raised his one-year price target to $13.50, implying a return of 35 per cent at the time of publication.
On November 30 (or December 1, depending upon your time zone) Canopy announced it would acquire peer Mettrum in a deal valued at approximately (C) $430 million.
From day one, Canopy Growth has viewed production capacity, brand diversity, and highly-skilled management as the foundational aspects of our business, said Canopy CEO Bruce Linton. Mettrum has established a line of cannabis products that work well in a medical context and will transition naturally into a natural and healthy lifestyle market. Their substantial production facilities will add to our growing production platform as we expand to meet the needs of patients, and their experienced personnel will help Canopy Growth drive our vision forward to the next level. Both Canopy Growth and Mettrum have proven themselves with Canadian patients; and together we intend to make our industry-leading product and service offering even stronger, while developing our common hemp objectives.
Brown says that while the price Canopy is paying for Mettrum may appear steep, he views the transaction positively because Canopy is clearly taking a longer view of the industry. He believes investors need to adopt the same mindset.
While the near-term implied acquisition multiple appears steep, Canopy is taking action with a much longer investment horizon in mind and we believe investors need to look at this industry with a similar view, says the analyst. While the one year forward multiple appears steep (38.7x EV/CY2017E cons. EBITDA) at first glance, we remind investors that one-, two-, and even three-year forward multiples are unlikely to reflect the growth potential of the Canadian LPs in Canada and more importantly, internationally. Canada, which we estimate could be a $7.1B market, is only the tip of the iceberg in terms of the global cannabis legalization movement. The global market is estimated at $150B to $200B and we note that these estimates may materially discount the medical and nutraceutical opportunity for cannabis. Cannabis has achieved little penetration on the medical front due to the shortage of research, which has only picked up steam in the past few years. On page 4 we summarize the international cannabis tide effect and why we believe the Canadian LPs could trade at growth multiples for years to come.
Brown thinks Canopy will generate Adjusted EBITDA of negative $3.40-million on revenue of $68.2-million in fiscal 2017. He expects these numbers will improve to positive EBITDA of $12.8-million on a topline of $141.8-million the following year.
And a product recall just before this deal was announced they need help badly.
I was thinking about this today and has some merit to you're conversation and over a 10 billion buyout.
Molson a company with a 27 billion market cap CND.
Looking at their earnings per share. Molsons is making just over 100 million per quarter. Net mind you.
So what's that mean for Canopy. Always thought Canopy could make their first year of legal sales. 300 million sales rec and medical combined, 90 million net.
About 22 million per quarter making them 22% the company Molsons is on their first year of legal sales.
100 million medical and 200 million recreational sales are very achievable conservative considering they're at 60 million medical already with MT.
22% of Molsons would give Canopy a 6 billion market cap in 2018. On fully diluted stock that's a price per share of $36.
Just thought I'd share as I would have expected Molsons to be very out of reach but it looks like Canopy has a change of being competitive in terms of sales considering Molsons is a mature company we could catch up fast.
http://www.thisisinsider.com/legal-marijuana-weighs-on-beer-sales-2016-12
That's pretty much where I have them too. I had them at 300 million sales. 100 million medical and 200 million recreational. They'll sell whatever they can produce pretty much. That's why we're seeing the companies raising so much money and expanding. That's a different way to look at it. Valuing the marker at 1 billion year one is quite conservative but maybe if production doesn't catch up realistic who knows. My thoughts are if they do hit those kind of numbers year one this stock is going to bring rediculous returns because it will be trading on future projections not current revenue. I company that grows from 80-100 million sales to 250-300 million in one year will not be trading in the 1-2 billion mark. I sold Dollarama at 20 something dollars they were grew similar and they made 300 million sales the following quarter and the stock took off and never looked back. I think last quarter they had 900 million sales a stock price of 100 and a market cap of 11 billion. I often compare these companies because I think they will have similar growth and a similar time frame. GL don't get shook if you belive in yourself and your evaluation. Bruce our CEO is a believer that's for sure. Even has publicly stated he's shooting for 40% of the rec market.
https://www.google.ca/amp/www.obj.ca/Local/2016-09-15/googleamp-article-4641418/Canopy-Growth-Corp.-aiming-to-dominate-the-world-marijuana-market,-CEO-says
What were there sales? 4 million? Canopy with Mettrum is 12.5 million plus. 3 times Aph plus has 6 facilities APH has one and some "land" Canopy has acres of land as well no big deal. APH has some bunk US deal Canopy is in Three countries. There's no comparison different companies. I wouldn't want to be APH competing in the space with a company that has 50% of the market. APH and all the others are fighting over the other 50% with 30 other companies. This is a situation where bigger is better.
The end good luck
Just point out you're one billion evaluation would be a deal and a half. I can't talk with you anymore sorry. You're obviously wanting cheaper shares. On one of your attacks screwing people out of their shares.
Based on conservative valuations for all of the market it would be trading at $12 imo but in reality if they pull those numbers this will be trading a crazy growth multiple forward looking 3-5 years that may be double or triple that.
If this company was worth 1 billion they'd have 10% of their value in cash! Lmao
I did use the diluted share price,
300 million sales, 90 million profit, . 60 cent EPS, PE of 20 = $12 stock price.
Nothing has changed except the target price is 12 down from 18 now they have to beat 100 million medical which they'll hit for sure they're at 60 million now. And 200 million recreational which they may blow out of the water too.
Product needed using sale points of $5-7 is between 42,000 kg's and 60,000 kg's by next year? They have enough cash to build 2 more facilities without dilution.
APHRIA is one company, Canopy is multilayered. Now with the 3 largest companies together 50% of the market already. I'm guessing they bring in 60% or more of the new patients. Tweed currently is the most recognizable Brand I'd say in the world right now. Snoop did that for them, that is the value of Snoop. Tweed brand may be worth many 100's millions
Aph is a good Co. Not saying they're bad. Love to see them join the party under the Canopy. I remember all the na sayers saying 100 million market cap was overvalued.
At the lowest revenue per year I can imagine under a rec market. 100 million in medical sales and 200 million in rec sales. Fair value for Canopy is exactly where the price targets are $12-13 even with fully diluted shares. This, if what the experts are saying 2018 rec sales is only looking out one year.