Making Marijuana Millionaires
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IPS
Hope all is well , Its very interesting you mentioned Risk Adverse as your disposition.
I must say,,, For a few years , my potfolio has taken some wild swings , I must say that SHWZ gives me that feeling , Ive been struggling to articulate that point. Schwazze is by far the most risk adverse i have truly felt about any cannabis stock. I think its because of JD . The Noble Capitol team has a very diverse portfolio and the organizer said to me the CEO of Noble thinks Justin maybe the best CEO in there pool of companies
https://www.reddit.com/r/SHWZ/comments/wxwyz6/latest_crux_interview_of_schwazze_justin_dye_ceo/
This guys notes from recent SHWZ video
Key Highlights:
Beating State averages in sales growth (e.g., 12% better than Colorado)
Q2'22 Revenue: $44.3MM in Revenue (up 44% YoY)
Q2'22 EBITDA: $15MM (33.9% of Sales and 50% YoY growth)
Retail Stores were over 85% of sales (above precovid norms)
Gross Margins up 69%
$33.8MM of Net Income (although this includes some one time items)
Average Basket is holding steady at ~$60 basket per customer visit
Visits are off 8.9% (444k unique customers in stores)
New Mexico is up 41% on a 2 year stack comp (31% on 1 year)
Number of new stores in New Mexico that are opening (some that have been discussed and some on the way) = THIS IMPLIES AT LEAST 4 NEW STORES IN NEW MEXICO in addition to the 33 dispensaries they currently have. Additionally, from the earnings call we know they have at least two more Colorado dispensaries in the works.
Want to source 30% of their own product in the dispensaries (at least in Colorado)
Colorado is roughly $120MM annualized business (implying that New Mexico is around $55MM+) given their projections.
Company wants to grow 40% to 50% of their own product long term for distribution in their own stores.
In listening to the interviewer, Matt (who is an amazing analyst but traditionally focuses on mining companies), clearly does not understand the cannabis space (focusing on online sales and celebrity marketing). Most of the MSOs don't rely on either and the ones that have tried have failed miserably (e.g., The Parent Company).
Another key note is that Schwazze is clearly looking at least two other states to target (one of which would likely be a 2023 entry based on some commentary from the earnings call) in the region. Most likely the two states will be some combination of Texas, Oklahoma, Utah and possibly the competitive arena of Arizona. Schwazze is already seeing a lot of traffic into its New Mexico Las Cruces store (it's top producing store in New Mexico) coming in from Texas.
Justin also reiterated that they will be free cash flow positive for the year (excluding any acquisitions). This is important in a few ways:
It reiterates that we can see at least two acquisitions (or one acquisition of more than one faciliy) to be announced by year end.
Given that there was some cash losses in the first half of the year, the second half of the year should prove to be highly free cash flow positive in order to make the year free cash flow positive.
The company has taken out 50% of the costs on the distillate side reduced using six sigma and lean manufacturing and reducing WIP and defects.
Justin Dye hinted that there may be some "white labelling" opportunities (i.e., of the PurpleBee's product) on the manufacturing side that they may be open to in terms of outsourcing the manufacturing.
The rest of the interview talks more high level visions/strategies of the stores, brands, states, and marketing.
I think the $1 shares are long gone , of course anything can happen , basically were holding $1.40 and above
This guy says he is dollar cost averaging in and hopes to get below a $1 .... i know the shares wont drop i will snag them all up . 7 yrs in cannabis stocks and i know SHWZ has the best plan
Started DCA'ing into $SHWZ today. 2W and 3M OBVs looks good. Hope we take out some stops below 1. 🦚🥬🦚
— kiari (@kiari_dogo) August 25, 2022
JD said
" My goal my goal is build a great company that's different that has a real has energy behind it that is innovative that does the right thing, Question is can SHWZ be a one billion dollar Revenue company ?
Could it be a two billion dollar Revenue company?
Could we buy somebody or merge with someone? and have it be much bigger than that down the road ! The answer is YES
I mean at Albertsons we bought a 10 billion dollar business we stripped it down restructured it to 3 billion ,
Albertsons when I left it was a 60 billion !
During the last earnings call George Allen said it cost them 5 bucks to make this pack they will wholesale for $10-$11 and Retail for $20. If you invest in Lowell ,, this PDF gives an amazing amount of insight into market study for lowell35's
https://ir.lowellfarms.com/sec-filings/content/0001171843-22-004178/0001171843-22-004178.pdf
JD said they would be generating free cash flow sometime during the 2nd half of 2022 .
Nice to see who we compare too
🇺🇸Cannabis Comp Table: Cash Flow from Operations
— Sammy J (@sammyj_19) August 30, 2021
Updated Q2: $VEXTF $TLLTF $JUSHF $PLNHF $SLGWF $CNTMF $GAEGF
Merged: $TCNFF + $HRVSF$VRNOF $GTBIF $TRSSF $MRMD $CRLBF $CXXIF $AYRWF $HBORF $SHWZ $LOWLF $FFNTF $FLOOF $GDNSF $CCHWF $RWBYF $ACRHF $CURLF
Price thru Aug 27 pic.twitter.com/bCLg0YQkr7
Once again if you read through post from this week alone ,,,there was a thorough discussion about where JD said SHWZ wanted to be and where he did not want to be .
I like this guys thinking
Shwz will blow everyone away in 3-5 years. I always got the gut for this stuff.
— Rob (@Vblack65) August 21, 2022
Oklahoma is currently a mess , Read the prior posts .There is actually Due Diligence effort in many posts , and if you watch any of the videos with JD , he is very happy to just be in CO and NM. There is no other state currently in play from what i have gathered . The only reason people ask about other states is every MJ pundit/ Anal Lyst says SHWZ will grow into other states or be a takeout target by an unprofitable mso. That being said JD did say he has a Fiduciary responsibility to take offers to the board if they actually materialize ?
IPS Thanks for the Vid link
In a portion of the video JD said;
My goal my goal is build a great company uh that's that has uh that's different that has a real has energy behind it that is innovative that does the right thing, question is can shwz be a one billion dollar Revenue company ?
Could it be a two billion dollar Revenue company?
Could we buy somebody or merge with someone? and have it be much bigger than that down the road ! the answer is YES I mean at Albertsons we bought a 10 billion dollar business we stripped it down restructured it to 3 billion ,
Albertsons when I left it was a 60 billion !
lowell 35's coming in hot
It's exciting times gearing up for the release of @LowellFarms 35's. We look forward to sharing more soon! #WeedInnovation #BehindTheScenes $LOWLF $LOWL pic.twitter.com/2DNQs6jQtD
— Lowell Farms Inc. (@LowellFarmsInc) August 24, 2022
JD mentioned 100 stores in Co currently @ 23 , costs would stay contained because the SG&A would be lower as a % of revenue JD mentioned they would be doing about $600M annual revenue, in 2023 there projected EBTIDA is 38% assuming in 3 to 5 yrs they could hit about 40 to 45% EBITDA, that is about $240M - $270M in EBTIDA, this is only the Colorado portion Add New Mexico JD mentioned they could be doing about $200M annual revenue, $75M - $90M in EBTIDA . $20 to $25 per share, best guess in 4 yrs ?
The typical Mso companies advantages have always been "first mover " The new advantage buzz word is Size/Scale.
Are they wining though ? I mean really winning ? , Actually no , why because there capex is outrageous , there margins are shrinking ,this is not the case with with all the Mso's , but most .
Maybe they are not winning on margin because of there strategy, The big Mso strategy was initially getting into many states , this also required alot of skill/luck as many were lotteries , in time again the advantages went from a 1st mover to scale , Grow more weed and add more states or like Planet 13 , make Mega /Scale stores .
If we thing long and hard SHWZ isnt trying to mimic the Bigger MSO's . WHY ? Because SHWZ strategy is different ,,,GO DEEP , Become super regional .
The thing is all of these concepts , 1st mover , size/scale, and strategy can be copied so eventually you loose that advantage.
For example these investments in scale and the sustainable competitive advantages for the Tier 1s will no longer help.
I don’t think it’s a coincidence that many of the top MSO's run by finance guys’ are lagging.
It is very interesting scenario as skill improves, especially in competitive markets, Trick plays and luck becomes more important determining outcomes.
In very highly competitive, you really need to have a differential skill ,something completely different to win in retail distribution.
SHWZ strategy is add stores really close to others , JD said id rather poach 100 k a month from a 500 store if i add one in close geography doing 400 the net is 300 k and you push out the competition. GO DEEP
In the previous post We literally are projected to be best in class
1 Ebitda margin 2023
2 EPS 2023
3 Cagr 2023
4 P to E 2023
5 E/V to sales 2023
Its hard to say how accurate the chart is but this guy revises this weekly, and he answers your questions on twatter
JD likes the SEC states , Texas would be nice due to Super regional concept
Hello team Schwazze ,
What a very informative and crystalizing experience over at Boca Raton on Monday.
1. JD expects to get to 100 dispensaries in Colorado
2. There are 2 more Nm Dispos plus 4 previously reported
3. 80% of New Mexico population is on the South east corner of NM , JD said the down side of purchasing R Greenleaf , that none of the current Dispos are located there , All of the new 6 locations are located in that area
4 . Starbuds cost 4.1 x ebitda to purchase ,, current deals are going for lees then 2x , probably closer to1x in this distressed market
5.California is not an option , too much black market Comp and too many lawsuits
6.JD and his team probably have more experience then any other C suite in Cannabis ..... From Mergers to Deep market Penetration , Mechandising,
7.Due to out super regional penetration , We are probably the most Unique MSO , Future Locations and Mergers in Co are a priority if they add too concentration in Denver , being spread to thin are the mistakes with Alberstons, A and P ,Krogers.
I will add more later
Sad but true , Legal competition in Cali will decrease rapidly...Good for Lowell but bad for small legal Mom and pop grows
“I would expect to see at least half of our businesses to fail in the next year,” said Genine Coleman, executive director of the Origins Council. “If I’m being quite frank, I think we need a new proposition. So much wrong is baked into this system that we are just not going to be able to move ahead without one.”
https://www.washingtonpost.com/nation/2022/08/21/california-marijuana-farms-failing/
After the last 2 weeks of Earnings the results for all the mso's (not including shwz) are lower margins, lower revenue and more debt as well as lower market caps resulting in revised guidance
The list is from someone else and as usual SHWZ wasnt on it
2023 Projections from revised guidance LOWLF was the smallest operator on the list so we got snubbed
Other Companies
Avg EBITDA for 2023 is 26.9 %
Avg projected Sales growth for 2023 30.9%
Avg EV/SALES ratio 2023 1.6%
Avg EV/EBITDA ration 2023 6.3%
SHWZ
Avg EBITDA for 2023 is 33.1%
Avg projected Sales growth for 2023 33.3%
Avg EV/SALES ratio 2023 1.3%
Avg EV/EBITDA ration 2023 4.8%
I know this comment is very delayed but this is a potential windfall for Lowell , I know Interstate wont happen overnight but they need to gets these Lowell 35's debut to be a smash hit asap, Competition will be fast to copy , This issue is there Lic rev with other states , it doesnt allow for lowell 35's.
The machine is too top secret to just ship it and let someone become a potential competitior. Lowell 35's change the way people will smoke joints at a very economical level
SALINAS, Calif., Aug. 19, 2022 (GLOBE NEWSWIRE) -- Lowell Farms Inc. (the “Company”) (CSE: LOWL; OTCQX: LOWLF), a California-born innovator in cannabis cultivation and maker of the legendary brand Lowell Smokes, along with its subsidiary, Indus Holding Company ("Subco"), has issued an aggregate of $4.2 million of senior secured convertible debentures ("2022 Convertible Debentures") of Subco, which are convertible, as more fully described below, into an aggregate of 18.2 million subordinate voting shares of the Company ("Subordinate Voting Shares") with respect to principal and additional Subordinate Voting Shares upon conversion of accrued and unpaid interest. Investors in the 2022 Convertible Debentures received warrants of the Company ("2022 Warrants") to purchase an aggregate of 18.2 million Subordinate Voting Shares and warrants of Subco ("Subco Warrants") to purchase an aggregate of 27.3 million non-voting common shares ("Subco Shares") of Subco. The Company has received investor commitments for the purchase of an additional $2.5 million in 2022 Convertible Debentures.
The 2022 Convertible Debentures are part of the same series of convertible debentures issued in connection with the Company’s and Subco’s April 2020 financing ("2020 Convertible Debentures"). Proceeds from the financing are contemplated to be used for working capital purposes, automation investments and expansion into new markets.
“We are grateful for investor support as a testimony to the strategy we have employed to differentiate ourselves,” said George Allen, Chairman of Lowell Farms. “This financing allows Lowell to bring capabilities to market that have been in development for years.”
Highlights of the Financing
The 2022 Convertible Debentures bear a fixed interest rate of 5.5% per annum and will mature on October 31, 2023. The amounts due under both the 2022 Convertible Indentures and the 2020 Convertible Debentures are secured on a pari passu basis by substantially all assets of the Company (other than the Company’s Salinas County processing facility).
The 2022 Convertible Debentures, including accrued and unpaid interest thereon, are convertible into Class C common shares of US Subco ("Class C Shares") at the option of the holder at a conversion price of US$0.2313 (the "Conversion Price"). Each Class C Share is redeemable for one Subordinate Voting Share.
Each investor in the 2022 Convertible Debentures received, for no additional consideration, 2022 Warrants to purchase a number of Subordinate Voting Shares of the Company equal to the number of Class C Shares into which such investor's 2022 Convertible Debenture is convertible. Each 2022 Warrant has an exercise price of US$0.2613 and a 42-month term from the date of issuance.
Each investor in the 2022 Convertible Debentures also received, for no additional consideration, Subco Warrants to purchase a number of Subco Shares equal to one-and one-half times the number of Class C Shares into which such investor's 2022 Convertible Debenture is convertible. Each Subco Warrant has an exercise price of US$0.2613 and a 42-month term from the date of issuance. Under certain circumstances, investors will have the right to require the Company to repurchase their Subco Warrants and any Subco Shares issued upon exercise of Subco Warrants on a Subordinate Voting Share-equivalent basis.
As further consideration for their investments in the 2022 Convertible Debentures, the expiration date applicable to 2020 Warrants held by certain investors will be extended from October 13, 2023 to April 13, 2025 and may be further extended to February 19, 2026, if applicable regulatory approvals are sought and obtained.
The financing is considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) because certain directors of the Company participated in the financing. Pursuant to Sections 5.5(b) and 5.7(1)(a) of MI 61-101, the Company is exempt from the requirements to obtain a formal valuation and minority shareholder approval because the Subordinate Voting Shares trade on the CSE and the fair market value of insiders’ participation in the financing was below 25% of the Company’s market capitalization for purposes of MI 61-101.
Dayum
Are "pot stocks" a safe bet with the Safe Banking Act gaining momentum? @FrankCNBC reports: pic.twitter.com/e5dKHrxit8
— Squawk Box (@SquawkCNBC) August 19, 2022
Unlike most other top growth stories in the space, growth for Schwazze is not dependent on the integration of any large assets or looming legislation catalyst that could ultimately be delayed through factors outside management’s control. Schwazze growth is about enhancing efficiencies in operation and gaining customers within existing markets.
So was bed bath and beyond , cant explain the rationale .Just hurd mentality i suppose .
Looks like 1.42 is as low as this will go for now ? Hopefully !!!
On another note ...my mind is being blown ,,,LOL ..seriously go look up MNMD mind medicine on the nasdaq there was a story put out on social media yesterday that some 20 yr old made 100 million in 4 days , Today someone said he and his Pharma Doc Father took a stake in MNMD about 1 mill shares per minute trading
I follow many cannabis companies and now only have 4 or 5 tier, 2 and 3 companies in my portfolio. Every tier one is getting 2x to 5x price targets from all the analysts we got 2.5 to 4 x . Granted its easier to generate a ( best guess ) when many of the tier 1 have many assets un-developed or just starting .
I see our super regional strategy as being superior and tons of opportunity in Colorado with so many struggling cannabis dispensaries needing help.
In New Mexico , we have a huge advantage over everyone and seem to be building out at a much faster pace percentage wise ( 4 upcoming) 40% growth in just 6 months.
Imagine Co with 40% growth of new dispensaries ....Boom
How many will we have by the end of 2023 ?
I am just regurgitating and speculating out loud , i suppose its to calm my nervous enthusiasm from the upcoming boom potential we have.
i had a bid in for 1.40 didnt fill
A little outdated Video about Schwazze , Probably not worth watching for the regulars here , thought id post anyway.
Dispensary in Harvard Mass opening this month
Soon Cambridge... soon. Can't wait to open doors and be part of the community. In the meantime, come see us in Brockton & Taunton!
— Commonwealth Alternative Care (@CommonwealthAlt) August 15, 2022
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Please consume responsibly. For use by adults 21 years of age or older. Keep out of reach of children. Nothing for sale on IG or FB. pic.twitter.com/FNMqqfYNdY
While the underperformance for the quarter and persistent market headwinds are disappointing, TILT is experiencing solid early returns with its house of brands strategy on the plant touching side of the business with cannabis sales up >20% Y/Y and pricing holding steady for third party branded products in the wholesale channel despite pressure elsewhere in the business. The branded products strategy, through which TILT is bringing large independent west coast brands into Massachusetts and Pennsylvania, remains in the early stages however the initial success can be a precursor to even better results moving forward on enhanced scale of operations and deeper relationships with partner brands
We adjust our estimates to reflect results and the guidance cut however our rating and price target remain Buy and $0.50 respectively. Importantly, we note that unlike in prior years, TILT is positioned to weather further challenging market conditions following the sale lease back transactions announced this past winter and execution by management. Meanwhile on the plant touching side of the business, TILT has a major catalyst looming with its New York managed services business (operating on behalf of the Shinnecock tribe) particularly if the roll-out of traditional rec sales in the state get delayed into the latter part of 2023 or even later. TILT as a service provider to a Native Tribe will face no such regulatory delays with the company having recently broken ground on a Long Island dispensary.
Investment Highlights:
Q2 Results Hindered by Less Demand for Higher Margin Jupiter Hardware products.
2022 Guidance Cut on Macro Headwinds Including Jupiter Weakness and Challenged Wholesale Pricing.
Company Seeing Early Returns with Brand Push. Greater Benefits to Come from House Brands Strategy on Greater Scale and Enhanced Relationships.
Capitalized to Pay Off Debt and Weather Challenging Macro following Previous Sale Lease Back.
NY Remains a Unique Growth Opportunity in 2023.
LOL , hardly anyone in cannabis hit target , Schwazze killed it , But all things considered , Tilt is growing slower then anticipated , BUT - BUT ,,,,Still Growing
https://cannabisinvestingnewsletter.com/community/tilt-holdings-tlltf-stock-forum/tilt-holdings-tlltf-stock-forecast-analysis/#post-3251
How Cannabis Can Save the U.S. Economy
https://panelpicker.sxsw.com/vote/128318
According to headset_io
, cannabis sales growth declines are likely a sign of a correction rather than a cause for concern,
Sales are returning to pre-pandemic levels.
https://businessofcannabis.com/2022/08/15/headset-arent-concerned-by-apparent-sales-growth-declines/
This could have some huge implications , Read the comments
https://www.reddit.com/r/weedstocks/comments/wr4n78/iiroc_canada_bans_naked_short_selling_effective/