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Right!!??
Yea, except right now it's a hella closer to bust then $5 or $7 pal.
The Ontario government is considering a plan that would abandon the maligned lottery process that has left it with only two-dozen legal pot shops, and instead pivot as early as January to a system that could lay the groundwork for up to a thousand stores in the province, according to a person directly familiar with the matter.
https://www.bnnbloomberg.ca/ontario-mulls-overhauling-pot-licence-system-in-2020-as-sales-lag-source-1.1351505
Look into Valens latest news release about acquiring a Toronto based beverage manufacturer. Thats what an aggressive expansion in the 2.0 looks like ??
What are the estimated earnings numbers?
Valens Knows How to Win During the New Gold Rush
By NICI Staff Reports
Dear------------
The name James W. Marshall may not ring a bell, but his discovery launched an avalanche of wealth.
In 1848, Marshall reported that he found gold in California in the 120-mile long American River.
That propelled the "California Gold Rush" of 1848-1855, which lead to over 300,000 prospectors racing to the Golden State during that time to find their own fortune. A census reportedly found that the Bay Area had 624 miners for every 1,000 people.
The tales of newly-minted millionaires who made their fortunes mining the precious metal flooded the newspapers.
However, there was someone else who cashed in on the gold rush during this time who built a legacy that still stands to this day - Levi Strauss.
Instead of making his fortune by digging for gold, Strauss sold durable trousers to miners. That's what we call an ancillary business. In the cause of Strauss, he didn't make his money directly from gold, but he made it through supplying the needs of those who were seeking life-changing wealth by gold mining.
Thanks to the Gold Rush, Strauss had the wheels in motion to build a clothing empire.
As of 2016, Levi Strauss Signature jeans were sold in 110 countries, and Levi Strauss & Co. is worth $6.7 billion.
And we're telling you this story because it reminds us of Valens GroWorks Corp. (OTC: VGWCF).
The Power of Cannabis Extraction
Selling jeans wasn't as exciting as the idea behind mining for gold, but when Levi Strauss died in 1902, his estate was worth $169 million.
Turning cannabis into oil also doesn't sound like the most thrilling job, but it could be a gold mine for Valens.
And while other companies offer extraction services, Valens has focused on a unique business model.
Valens cultivates its own cannabis and can extract it.
In comparison, firms that have extraction facilities often don't have the specialization needed to provide their extraction services to other companies. On the flip side, the companies that do specialize in cannabis extraction often don't have their own product, which means they are forced to rely on building relationships with other companies that need extraction services.
And from Valens' most recent earnings report, its unique focus has served the company well...
Sequential Revenue Growth
The sequential revenue growth reported in the cannabis industry is unlike anything we've ever seen before.
For example, Salesforce.com is one of the biggest cloud computing companies out there, and it has the tech industry's most successful customer relationship management platforms. The company has been growing at an incredible rate.
When Salesforce released a recent earnings report, it said that revenues had increased by 24%.
But that revenue growth is year-over-year growth.
Sequential revenue growth, which is the growth from one quarter to the next, was less than 4% for Salesforce.
Meanwhile, in Valens' recent Q3 report, the company said it increased sequential revenue by 87%.
That's right.
The company was closing in on a triple-digit revenue increase in just three months.
Again, turning cannabis into oil may not be the most glamorous part of the cannabis business.
But if Levi Strauss taught us anything, it's that there's more than one way to get rich from a gold rush.
Valens GroWorks
Valens is primarily an extractor of cannabis and hemp oils.
An extractor is a company that takes cannabis or hemp cones and removes the cannabinoids, terpenes, and other useful compounds from the flower. That process, which is like removing oil from corn, produces a substance the industry calls “crude oil.” From there, Valens takes out compounds that will not go into the finished product – waxes, some fats, and a few other things.
After that is done, it has something called an isolate. Other companies take either the crude oil or isolate and make products with it.
Those products can include ingestible oils, vape concentrate, ingredients for edibles, and ingredients for skincare products.
There are a few arrangements by which Valens can do extraction.
It can do it itself and sell the isolate on the open market. That business has high margins, but Valens takes all the risks during the process. It has to deal with the price risk, as well as the risk that some pesticides or heavy metals got into the source material.
Valens can also produce the isolate through a contract with a grower. In that instance, the grower owns the source material, and Valens simply processes it for a fee or a percentage of the revenue.
The latter is how Valens is processing most of its isolate right now. The margins are still very high – the company had gross margins of 58% in the most recent quarter – and Valens gets a guaranteed supply of material to extract from big companies like Canopy Growth, Tilray Inc. (Nasdaq: TLRY), and Hexo Corp. (NYSE: HEXO).
Valens has contracts with most of the large cannabis growers in Canada.
Finally, Valens can make the products itself and sell them as “white label” products for someone else to sell at retail. Valens has the capacity to design products and manufacture them. Right now, that capacity is limited to custom cannabis oil formulations and tinctures.
In the future, it will be able to make vape cartridges, edibles, and beverages.
Valens and Extraction
There are a variety of methods to extract cannabinoids from the cannabis or hemp plant, and everyone has a different opinion of what works best.
Valens solves that conundrum by having multiple extraction methods. The customers can choose how the extraction happens, or they can let Valens choose.
Valens is a newer company, but it is bringing in money.
Specifically, it generated C$8.8 million of revenue in the quarter ended May 31. Perhaps even more important is the fact that the company generated adjusted EBITDA of $2.2 million. Most of the companies growing and selling cannabis, particularly in Canada, are several quarters away from generating cash flow.
Valens is an industry outlier in that sense.
What’s more, Valens has the most extraction capacity in Canada, and it is adding more. It currently has the ability to process 425,000 kilograms of source material per year. To give you an example of how much that is, the $8.8 million of revenue Valens earned this quarter only required 8% of its capacity.
And that’s not enough; Valens is expanding to 1 million kilograms of capacity in Canada, and it is in discussions to start processing operations in Europe.
Remember that with Luxembourg confirming that it will legalize commercial cannabis consumption, that’s the first step in Europe taking legalization seriously.
Overall, Valens is an impressive company with lots of near-term catalysts that will continue capturing the attention of investors.
FROM CANNABIS INVESTOR INSTITUTE NEWS LETTER.
Investors were concerned with one number in a recent earnings report, but everything is fine.
Valens GroWorks (OTC: VGWCF), one of the companies in our model portfolio, recently reported its earnings.
The revenue was very good; it beat everyone’s expectations. Margins were a little low, but the company is building its capacity, so there’s bound to be unused assets that cost money and drag those margins down.
Management did a good job explaining all of that on the company’s conference call, and all seemed to be fine.
Before the call, the stock was up nearly 5%.
But after the call, the stock reversed and ended up falling by 5%. It went down another 3% the next day before beginning a recovery.
Old News Causes a Panic
As best I can tell, investors panicked because they didn’t understand an old deal that the company had made. The company made good on the deal during the quarter, leading to a $6 million charge. To investors, something seemed shady.
And it did look shady on first glance.
The company issued over $6 million of stock to acquire a shell company with no assets, and the owner of that company had previously received a ton of warrants to acquire Valens stock at a low price. That’s the kind of thing that penny stock scammers do, not real public companies.
But Valens is no penny stock scam. It was merely living up to an old deal it made.
Here’s what happened.
The Truth About Valens
Before current management came in, they had a consultant who did a lot of work for the company. That work included lining up acquisitions, setting up technology, and even helping with operations. He was paid largely in stock.
At the time, Valens wasn’t much more than an idea and it was still private. The value of the stock back then would have been in the range of around $0.05 per share. To pay this person fairly, Valens promised him a lot of stock.
The consultant was basically betting that his work would lead to the company’s success and that, eventually, the stock he received would be worth more than any cash he would have received.
On the part of Valens, the company didn’t have much cash, so it was also happy to make the deal.
Valens is now a successful company, and that means the consultant’s bet paid off. The stock he received and the stock he agreed to receive in the future became incredibly valuable.
The senior management team is entirely different from the one which made the deal with the consultant.
But a deal is a deal; Valens still had the obligation to produce the shares it had promised that consultant back when things were less certain.
The transaction the company reported was simply the issuance of stock to fulfill its portion of its deal.
However, it looked awful for shareholders who didn’t understand what had happened.
That’s the long version.
The short version will help you easily separate the truth from the noise.
The Short Version
Valens was paying someone who had helped the company become successful. Since then, Valens had become even more successful than anyone thought at the time.
On the company’s conference call, management explained the transaction, but failed to explain the full backstory.
Since management disclosed the deal in prior financial statements, they apparently didn’t think the market would focus on the transaction as much as it did.
It’s hard for me to blame management for that because I would have made a similar assumption.
Still, this incident is an important reminder that you should never be frightened out of a stock when you don’t know what’s really going on.
A lot of people lost a lot of money when they saw other people selling, or they lost money because they believed a report from an analyst they’ve never heard of before.
I don’t often report on events in the cannabis market on the same day they happen. I think it’s more important to be right than first. That also lets me provide you with advice as opposed to just being a news outlet and not letting you know how something will impact your model portfolio.
However, if there’s ever unethical behavior on the part of management or some other reason why you have to sell a position immediately, I’ll get in touch with you right away.
You're cheap
Youre not even in it at the moment. You sold most og your position. I wouldn't worry about starting an insta account
Are you implying this will take off tommorow?
Honestly, plain and simple, i agree with what you've said.
This will be huge. Biggest extractor in Canada with the largest market share with a magnitude of contracts from many large and small LP's. This is just the beginning.
Nasdaq is 4 i believe. Not positive on nyse but a dollar seems low.
Nasdaq, nyse requires a minimum share price maintained for a certain period of time. I believe its $4 or so. How will this ever get to $4 or even close to it?
Definitely will be interesting to see how things pan out.
Looking at the chart and the history of this stock,there seem to be yearly spikes. Highs of over a dollar and lows in the teens and even sub penny. Makes you wonder if this will be a similar deal. I honestly have no idea.
Doesn't stock generally drop following a reverse split? If it fillows the path of most reverse splits, investors will lose even more? Opinions?
Yea?..well so is tilray... They all have their"reasons"
I spent about 45 minutes reading the rs filing to try n get an understanding. First off Id like to mention that the other 3 board members excluding Shannon hold over half the the common issued shares. Meaning that the rs will affect them just the same as us, the stock holders. If the board unanimously decided to vote for this, why would it be in their best interest to screw themselves? I will also mention (in my honest opinion) that the company is trying to be visible and gain attention, however with it having such a low pps, there are few to none interested broker or investment firms in the stock. Stephen Hart mention that the business is positive over all, and getting uplisted to a higher exchange would be good for the stock long term. I truly believe that the ceo, the board members are trying everything they can to get this stock where it belongs.
Awaiting the final announcement of the aquisition and seeing the 8K would be a huge catalyst. Last time they announced the sdfo take over the stock went off the wall. And that was on 4 mill annual rev! We're almost there. Id like to think it should be finalized closer to the middle of December. We know this stock is insane undervalued. Stay positive!
Yea... I know. There's nothing we can do about the IR. However, it's still a good idea for everyone else to help n spread the word.
Sno Bar Chill Off!
Any one with a Twitter account could help to spread the word about this opportunity!
Good morning everyone! Looking forward to another great day here at PACV! Everyone hold your shares, aquisition completion is due in December. Lets lock the float!