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.
We should be one of the small few for 2023. Cresco Labs should drop off. No way they find positive EPS estimates if/after the Columbia deal closes. Harvest is the reason Trulieve is not on the plus side...and Trulieve touted that acquisition as accretive to the business. I also expect least one other...if not two...to miss as well.
Per a Colorado operator on Twitter, Los Sueños didn't even plant their fields this year. Which is also in line with what Boris, Curaleaf's chairman, previously mentioned...(temporarily) turning off assets in California and Colorado because of (wholesale) price compression.
My digs are out if appreciation for things learned throughout my cannabis experience. With Andy at the helm he ultimately taught me a lot about the industry. He taught me that global cannabis wasn't going to be grown in Canadian greenhouses (bailed out of the LPs at the right time)...but it was also too early in the game for me to realize the 'bro-tactic' of PRing any and everything for an unrealistic gain in the stock price. Unfortunately I bought into that hype, to which I learned another valuable lesson: term sheets do not equal guaranteed acquisition. I am also grateful that he found someone capable of overtaking the company and bringing his and Brett's vision to fruition.
For sure! SHWZ is my largest cannabis holding, by far...and the only company I have confidence in. Been adding some NewLake Capital. The dividend has been nice, but my play with that is the potential re-rating if they can uplist to a big board. We all seen how the big board likes IIPR. If there is some form of banking, or some reinstatement of the Cole Memo, they will be the first allowed to make the move.
I wish you luck! I haven't pinpointed it but I do not like HighTide. They just don't pass my gut check. There is a difference with SHWZ. They proved capable of bolting on new stores, and growing revenue/margins, while the other seems Andy Williams old school...PR EVERYTHING.
I agree with your assessment of said overvalued company....however for some strange reason people seem to think that interstate commerce is going to happen sooner rather than later. You listen to comments on Twitter spaces acting like it is some under the radar stock pick because of it's capability to product product at scale. It is a complete re-gift of 2018 Canadian players...apparently people forget (pretty fast) on just how well that worked out! Plus, it is laughable at this point to think that it is anywhere close. Sure it is happening in the illicit market, daily, but to have new states turning online knowing that the win is in everything seed to sale within their borders, why would any state give up a possible, significant, revenue stream even if it was acceptable? Then you look at all the states that are talking about IC and realize just how hilarious it is. It is the states with an oversupply issue! Of course they need to come up with some type of (investor) sales tactic, if they want to remain relevant.
WarrenWannaBe, I 2x almost all podcasts. I would agree. I personally think that cannabis will end up one of the staples of the next election. I think each party has constantly leaned toward their side of the extreme and I dont think that is where a majority of the US voter voice is. It is ridiculous that that such a position of power ultimately feels like a selection of the lesser of two evils. I think a majority of people are starting to get sick of it, and with current economic times, the next election comes down to which candidate is capable of conceding...and finding middle ground. Cannabis is an easy middle ground...with 80/90% in favor of medical and 67% in favorable of adult use.
Time to separate the wheat from the chaff. Canadian LP 2.0...US version...continues. Most of these 'top MSOs' only knew the industry when capital was [essentially] unlimited so they focused on growth, scale and chasing siloed markets...paying to play. This growth was not efficient and redundant. These companies could easily use the large profit margins of those limited markets to hide flaws. Now with capital all about nonexistent things are changing. These companies need to slow growth and focus on operational efficiency...to which most have no experience...so they blame competition, cost compression all the while clinging/pushing toward some govt news to help float the industry. So far they are doing a good job hiding their flaws by closing/selling assets in challenging markets while using 'protecting margins' as their positive spin. Delaying tax payments while saying it is a no brainer because owing the govt accrues at a lower rate than the interest rate on debt. At least one has said that they reached their US capital spend...I guess that is because, like the ETF MSOS, they only like to buy when prices are high and sell when they are low? Nope, just positive spin so don't have to say they are out of cash. Some have filed S-3s saying that it is good business practice to always have one accessible...or that it is in preparation for possible US listing. Well expect more to follow suit...especially if some form of banking happens and the industry sees a (temporary) stock price spike. Issue at the peak, right? Of course they don't want to dilute around 52 week lows...but most will have no choice because they won't know how to make ends meet any other way but through issuing shares and/or cutting jobs...or via sale leaseback. Rough seas ahead as companies try to rein in spending and focus on efficiency. Bearish on the (upcoming short term of the) industry...but Bullish on SHWZ, and their strategy, but most importantly because JD has navigated this situation before (with Albertsons).
What is so annoying is that following both sides...you realize the amount of overlap between the two systems that one would think that they would be able to easily come together for the common good...unless that is not the intention. Damn politics.
I try to follow all sides of the argument because the truth usually falls somewhere in the middle.
As for SAM and the SAM Twitter posse. A (very) small amount of the information that they post has merit (especially over-the-counter D8, D10, THCO, etc. products), otherwise, they use fear tactics to sway people in the middle. They still believe every neighborhood has a member that will intentionally try to feed the youth marijuana edibles every Halloween....and they are incapable of letting people make their own decisions, and being responsible for their own actions. They prefer to attack cannabis because it remains in a global purgatory phase...and also because it allows them to have a voice, and feel important. They act like they are public health warriors, but had they actually cared about public health they would go after the tobacco, alcohol or pharmaceutical industries. The industries, who on the DAILY, addict more people to their drug not to mention flood all forms of media outlets with advertisements, ALMOST ALL OF WITH, has some factor that could be interesting to, or specifically directed at, the youth.
For a cannabis-centric podcast, this was a bearish...but honest...episode. I would also suggest finding it (Marijuana Today Episode 426) on a podcast app so you can 2x it.
https://mjtodaymedia.com/episode-426-lame-duck-safe-banking/
...and (not that I am advocating for this) could be an easy, accretive, bolt on for Green Thumb moving them from 6th position to 4th...and not very far from 3rd.
Obviously we could slot in nicely with a few of them...just Green Thumb is about the only one in a financial position to actually make something happen.
Instead of the weak CRON rumor...to which CRON already has an equity stake in Pharmacann...I am gonna toss this (rumor) out there. What if the Brian Ruden stepping down was done just in time to have a BOD spot open for Congressman Ed Perlmutter? Ed is about to retire, he has always been an advocate for the industry and Colorado is home...actually according to Google he is from Lakewood CO, which is conveniently a stones throw from SHWZ headquarters. We all know he will end up somewhere. Why not with an up-and-comer from his own backyard?
Marillionaire...dont get me started! I saw/thought the same thing. It annoyed me to no end. Several layers of bias. Not only does he try to control the bullish/bearish industry narrative (by collectively focusing on the good or the bad) but you can read through his posts to figure out who is paying/not paying for his service...who he favors and doesnt favor. I was over it when he was pushing Greenlane (HARD) after his return from his accident. Seriously! Greenlane!
From The Green Market Report:
Schwazze completed 15 dispensary acquisitions so far this year.
Denver-based Medicine Man Technologies Inc., which operates as Schwazze (OTCQX: SHWZ) (NEO: SHWZ), saw third-quarter sales spike 36% in the third quarter ended Sept. 30.
Total revenue for the quarter was comprised of:
• Retail sales of $39.8 million, up 92% over the same period a year ago.
• Wholesale sales of $3.3 million, down 70% year-over-year.
• Other operating revenue of $96,000, up 35%.
The increase in retail sales was primarily driven by acquisition. Since December 2021, Schwazze closed the acquisitions of 15 cannabis dispensaries, 10 in New Mexico and five in Colorado. It also opened two additional dispensaries in New Mexico since the beginning of the year.
The company added five cultivation sites and one manufacturing facility as well.
“Despite a challenging economic backdrop, we outperformed our markets in Colorado by 12%,” CEO Justin Dye said in a news release. “We’ve worked hard to continue to grow our market share, increase our profitability rate, and generate free cash flow from operations, after paying taxes and CAPEX, placing us in an exclusive club within the cannabis sector.”
Schwazze reported net income for the quarter of $1.8 million, a year-over-year increase of 87%. The quarter’s gross margin was 60.1%, compared with 47.3% last year.
The company once again lowered its revenue guidance for the year, from $175 million-$200 million last quarter to $155 million-$165 million. The company noted, “We expect to be slightly below the projected revenues, which was a fourth quarter annualized run-rate of $175 million to $200 million. This lower-than-expected revenue in Q4 is due to lower than expected wholesale sales, and construction delays in new store openings in New Mexico.”
For the nine months ended Sept. 30, Schwazze posted revenue of $119.2 million, up 46% from the same period a year ago. Adjust EBITDA was $38.7 million, or 32.5% of total revenue.
Just thought I would post Q3-22 Gross Margin and aEBITDA Margin comparisons:
SHWZ
Gross margin 60.1%
aEBITDA margin 36.7%
CURLF
Gross margin 49%
aEBITDA margin 24.7%
TCNNF
Gross margin 56%
aEBITDA margin 33%
GTBIF
Gross margin 50.2%
aEBITDA margin 32%
VRNOF
Gross margin 54%
aEBITDA margin 36.1%
CRLBF
Gross margin 47%
aEBITDA margin 20%
AYRWF
Gross margin 41.4%
aEBITDA margin 18.1%
CCHWF
Gross margin 39.3%
aEBITDA margin 15.8%
TRSSF
Gross margin 36.4%
aEBITDA margin 16.9%
JUSHF
Gross margin 38%
aEBITDA margin 1%
AAWH
Gross margin 32.9%
aEBITDA margin 25%
FFNTF
Gross margin 46.3%
aEBITDA margin 28.6%
MRMD
Gross margin 48%
aEBITDA margin 25%
PLNHF
Gross margin 41.4%
aEBITDA margin 1.5%
Well it wasnt MSOS. MSOS did a ton of buying today...none of which was SHWZ. However that might change if SHWZ can keep the volume up like we have the last 3 trading days. Those ETFs require liquidity before investing. They need to know they can get out of the stock, quickly, if need be.
Look at CA, since they decriminalized all the Mexican cartels set up shop because now they don't have to transport product across the border. Then in OK, they were handing out licenses like candy (1 license for every 90 medical patients)...and are now the state is cracking down on their screw up since so much product is leaving the state. OK dubbed their issue 'ghost owners'. Sure not everyone grows...and even growers buy from dispensaries. It's not them the industry has to be concerned about. For MO, it's the ghost owners that will set up shop in the state, under the disguise of home growers, that now have the legal ability to mass produce product. Imagine if an operator buys an apartment building and each 'tenant' signs up for home grow. Now I am not sure if apartment or townhouse is prevented from home growing under the regs, but if not, then one person in each each apartment dwelling could sign up to home grow...which would probably bypass any red flag in the system...and then as one cohesive unit generate consistently produced product. I dont doubt it will happen. I also hope it doesn't cause new states coming online to see challenges from home grow and omit it from their rules/regulations.
I am with you. Steer clear of Missouri. With it going recreational it will impact IL out of state sales (which currently make up 35% of the states sales), especially around the St. Louis Area. They state made it known that they want to undercut the IL rec tax structure (and have done so, at least on paper 6% tax compared to 37% in IL). In addition, the state has done well by allowing home grow, but I think that they went a little too far. They are allowing perpetual harvest. There is a 6 plant limit in each phase (clone, veg and flower)...for a total of 18 plants per person. I think that this will create a glut that will either feed the illicit market and/or put a serious dent in the states adult sales potential.
Some challenging parts...lower total revenue due to wholesale and lowing guidance...but seriously though did you see the margins? I am gonna pump this...and let the haters hate...
Gross margin 60.1%; aEBITDA margin 36.7%
Look at those numbers! These are numbers from a company that is operating in a HIGHLY competitive state, a state that the other MSOs are running from...and a second, unlimited licensed state, that the other 'top' MSOs also don't seem the slightest bit interested in. These are numbers predominantly coming from a state where existing operators are closing up shop daily. These number ARE NOT coming from states where the licenses are limited, where there are only a handful of operators and where you can price gouge due to those benefits. This is a company that operates in a state where 'true' quality matters and consumers have expectations...because the industry is well established.
Now let's look at the same Q3 numbers from some of those other 'top' operators:
CURLF
Gross margin 49%; aEBITDA margin 24.7%
TCNNF
Gross margin 56%; aEBITDA margin 33%
GTBIF
Gross margin 50.2%; aEBITDA margin 32%
MRMD
Gross margin 48%; aEBITDA margin 25%
I haven't had a chance to review the fins. Saw a lower QoQ total revenue but thought the following was extremely impressive:
Gross Margin of $26.0 million, 60.1% of revenue
Adjusted EBITDA of $15.9 million was 36.7% of revenue
Just noticed the revenue decline was wholesale (a non issue). Retail and other are up.
I submitted 2, but I am not gonna be able to listen to the whole call. I will have to catch the transcript. I am a little concerned about my connection. It is 505 and I have had dead air for the last 5 mins. I even lost the music.
The funny thing is that the states making IC agreements are all states with oversupply issues. I am not sure if this is because they somehow think that the industry will open to IC...or if they are catering toward their investor base...or if it is happening simple based on the hope that some other new states will jump on board.
There was an interesting podcast episode from Key Investment Partners where the host held a discussion with two individuals from Pharmacann. They talked about what they thought SAFE Banking meant for the industry. They essentially said that, with the current interest rate increases, it probably doesnt mean much from a "better interest rate" but where they will see instant cost savings...between 5%-10% of SG&A expense...is that they (and the industry) should be able to consolidate all of their banking into one account which would amount to that level of savings.
You bring up an interesting point. There is a disclaimer at the bottom regarding potential inaccuracy. I was using it more as a gauge to check out the sales competition, per location, and see just how important location matters. Curious to see how Clovis and Ruisodo do, since SHWZ got a later start. Also, Sunland Park only has a handful of locations...I found it interesting that the closest 2 locations to El Paso aren't actually the highest in sales (unless they recently opened, as well). My concern is actually over the growing dispensary count in the state. "New Mexico has over 22 dispensaries for every 100,000 residents, a figure nearly twice as high as neighboring Colorado" -- Albuquerque Business First. The state is heavily dependent on Texas residents. Fortunately, Texas should struggle to move forward with cannabis legislation...at least I think...and the company/state should have time before this has an impact.
SHWZ currently has a 9.5% consumer market share in New Mexico:
Total NM Cannabis Sales since April 2022: $276.12M
SHWZ Total Sales: $26.28M
NEW MEXICO sales to date for the 12 R. Greenleaf Dispensaries: $26,279,049.92
https://qimw5q0w5j.execute-api.us-west-2.amazonaws.com/prod/dispensaries.html
IPS, I did read about Rubin as the replacement...but took it as typical positive spin on potential negative news. The part that I liked the most was that Rubin was designated for appointment to the board by Ruden.
StevenRisk, interesting point. I was just more concerned with any potential animosity given Ruden's involvement with the remaining (non-CO) Starbuds, and any potential future deals.
As GTI made mention several times when answering to questions about 3 board members stepping down (to which they didn't give much insight, as expected), they flip script to "U.S. listing" sand at one point mentioned "We continue to actively recruit new board members in preparation for our potential U.S. listing."
Yikes! This seems to be the theme right now across the industry. You wonder if he decided to resign with the intent of filling a void at a larger company (GTI)? Either way it is not good and it makes sense why the company waited to post it after 530pm. Hopefully there is truly no animosity between him and the company. He was the connection to Starbuds and a Colorado industry founding father.
Schwazze, is pleased to announce that Justin Dye, Chairman & CEO; Nirup Krishnamurthy, President; and Nancy Huber, CFO will host the Schwazze Third Quarter conference call on November 9, 2022, at 5:00 pm ET.
Investors and stakeholders may participate in the conference call by dialing 416-764-8650 or by dialing North American toll free 1-888-664-6383 or listen to the webcast from the Company's website at https://ir.schwazze.com The webcast will be available on the Company's website and on replay until November 16, 2022, and may be accessed by dialing 1-888-390-0541 / 997573 #.
Following their prepared remarks, Chief Executive Officer, Justin Dye; President, Nirup Krishnamurthy; and Chief Financial Officer, Nancy Huber will answer investor questions. Investors may submit questions in advance or during the conference call itself through the weblink: https://app.webinar.net/x0q6rpnP84n This weblink has been posted to the Company's website and will be archived on the website. All Company SEC filings can also be accessed on the Company website at https://ir.schwazze.com/sec-filings
Upcoming Events:
MJ BizCon – Las Vegas, November 16-18, 2022
Justin Dye, Chairman & CEO and Nancy Huber, CFO will be attending MJ BizCon Las Vegas November 16-18 at the Las Vegas Convention Centre. Management will also be participating in one-on-one investor meetings at the event (Booth #3007). For more information or to schedule a meeting please contact Joanne Jobin, IRO at joanne.jobin@schwazze.com.
Benchmark 11th Annual Discovery Conference – New York City – December 1, 2022
Justin Dye, Chairman & CEO and Nancy Huber, CFO will participate in the afternoon session of the Benchmark 11th Annual Discovery Conference at the New York Athletic Club, 180 Central Park South in Manhattan. Management will be participating in one-on-one investor meetings throughout the conference. For more information, please contact your Benchmark representative.
*Verano refinances existing $350 million credit facility, extending the maturity with a four-year term
*Floating interest rate based on the prime rate and at a current rate of 12.75%, which reflects favorably on Verano given today’s rising-rate environment
So their rate is probably closer to what 15% when you include all the add ons? Also, floating interest rate? Is this normal? I dont really understand it...but it sounds to me like this move was made in desperation because I am not sure who would accept a floating interest rate, especially in these times. In addition, I guess Verano doesnt believe SAFE Banking will pass in the lame duck? Their debt didnt mature until the spring...if they thought SAFE had a chance wouldnt they have held out for a better deal?
SHWZ has been disappointing from a stock movement perspective...no argument there...but where it hasn't been disappointing is in what is happening at the company level. Look at the growth since HB19-1090 (which went into effect Nov 2019). Look at how the company grew margins while operating in unlimited licensed states...one of which is in the top 5 highly competitive states that the 'golden companies' are running from. They rival the numbers put up by the 'tier1' players while those companies focus on limited licensed, soloed, markets. All the while SHWZ is seeing at least half the basket sizes of those companies. The story is there. The numbers are there, and growing...what isn't is the investor base because it is entirely brainwashed by the bro-squad hyper-cheerleaders, self proclaimed, industry advisors that have somehow managed to make people think they know what is going on while they buy high and sell low. SHWZ is down 29% YTD while the 'top4' are down 36% (Curaleaf) and the others (Green Thumb, Trulieve and Verano) are down somewhere between 50%-60%. I appreciate a contrasting opinion...it'sgood food for thought...but as a message board friend, curmudgeon is a bad look.
I won't invest in P13 simply because their game plan is to set up shops in tourist areas. Their NV store brings in 100M per year. Sounds great, but what happens to them if there ever is legalization...or if all 50 states go rec? Will the novelty still exist or will they just be a company that holds grossly oversized assets? I am betting on the later. Best case scenario for the company is someone buys them out. Who knows, maybe if the landscape changes Planet Hollywood will end up being that buyer. Either way, IMO, not worth the gamble.
IPS, two good recent episodes, the last two from the All-In podcast, have great conversation easily relatable to the industry:
https://youtube.com/clip/Ugkxs5sQSQWrEhx_GaQ_chSL29AVVrk3so1G
And then several spots throughout the most recent episode around the 33min and the 1hr 7min marks.
You know me...damAconspiracy theory. Well I believe that the start of the day sell off was algorithm related due to the (negative) comments Biden made on Friday where he "touted his recent marijuana pardons proclamation, but indicated that he has no intention of granting relief to people who are in prison for selling cannabis."
https://www.marijuanamoment.net/biden-has-no-intention-of-extending-marijuana-pardons-to-help-people-jailed-for-selling-it-he-suggests/
Ditto...however you can still listen to the article. Plus it doesnt help when details are intentionally being left out, whether that be in the PR or by 'advisors' on Twitter.
While that is positive news, and great from an accessibility standpoint, the article and the GTI PR is completely misleading. Regarding the article, this is not the first time (globally) a dispensary has signed an agreement with Circle K. Fire and Flower does this in Canada. Secondly, they present it (until about 1min 30sec in) like GTI products will be next to other consumer staples within Circle K stores. The GTI express location is a separate, adjacent location, and will only be accessible to Floridian medical card holders. In addition, shame on GTI for presenting it like they were the creators of the idea...and making sure to leave out the restrictive access component within their PR.
Could possibly expedite things in the lame duck session. My worse case is that this was just a long overdue move by the President, timed perfectly to get the youth out to vote...when they otherwise wouldnt. That if the Dems retain control they can just continue to kicking the can down the road.
I guess I should be appreciating the news/coverage...but lowest price target of the seven stocks. Even rated HighTide higher stock price target. I dont care if High Tide is major exchange listed...it's pathetic. Also, the author needs to check his date, "Mr. Krishnamurthy has been with SHWZ since 2000."