CGrowth Capital Inc (CGRA)

[stockfan100]

I call it free entertainment while sipping on my coffee waiting for the harvest ;)

Better time putting out DDs for new investors to read.

Here we go!

CGRA Valuation Model from Wildfire Cannabis Acquisition (courtesy of STERVC)

Within the PR below, CGRA, has the option to purchase Wildfire Cannabis, a Tier 3 cannabis Producer in Washington state that is approved to produce and/or process cannabis on 30,000 square feet of building space.
http://finance.yahoo.com/news/cgrowth-capital-inc-executes-commercial-133000700.html

Based on the variables and data from the BOTC Analysis Report above, consider below for a CGRA valuation if they were to acquire Wildfire Cannabis in some kind of a cash deal to where the share structure would remain constant.

30,000 Square Feet x 40 Grams Per Square Foot = 1,200,000 Grams
1,200,000 Grams x $12.00 Per Gram = $14,400,000 MJ Production “Gross” Revenues

** It costs approximately $1 to $2 per gram indoors to produce good marijuana.
** That’s roughly around $10 per gram for profit. So…

1,200,000 Grams x $10.00 Per Gram = $12,000,000 MJ Production “Net” Income

This means that Wildfire Cannabis has the potential to generate $14,400,000 in Gross Revenues and $12,000,000 in Net Income. Keep in mind, this is just from one harvest and according to the BOTEC Reports done by BOTEC Corporation and TriQ, there is a strong possibility of having 4 to 6 harvests per year for indoor growth. This means a strong possibility below per harvest for Gross Revenues and Net Income per harvest per year:

”Gross” Revenues Per Harvest
$14,400,000 in MJ Production x 1 Harvest Per Year = $14,400,000
$14,400,000 in MJ Production x 2 Harvests Per Year = $28,800,000
$14,400,000 in MJ Production x 3 Harvests Per Year = $43,200,000
$14,400,000 in MJ Production x 4 Harvests Per Year = $57,600,000
$14,400,000 in MJ Production x 5 Harvests Per Year = $72,000,000
$14,400,000 in MJ Production x 6 Harvests Per Year = $86,400,000

”Net” Income Per Harvest
$12,000,000 in MJ Production x 1 Harvest Per Year = $12,000,000
$12,000,000 in MJ Production x 2 Harvests Per Year = $24,000,000
$12,000,000 in MJ Production x 3 Harvests Per Year = $36,000,000
$12,000,000 in MJ Production x 4 Harvests Per Year = $48,000,000
$12,000,000 in MJ Production x 5 Harvests Per Year = $60,000,000
$12,000,000 in MJ Production x 6 Harvests Per Year = $72,000,000

According to the BOTEC Analysis Report… Indoor production allows 4-6 harvests per year (5 being typical), whereas outdoor production allows only 1-3 harvests per year. Thus, production per square foot per year is much higher with indoor growing.

With CGRA having its Outstanding Shares (OS) being in the amount of 391,597,994 Shares, below is a valuation based on 1 Harvest so that we can now derive a ”potential” valuation by deriving an Earnings Per Share (EPS) to multiply by a Price to Earnings (P/E) Ratio from the variables that we know to exist from the info above.

Net Income ÷ OS = EPS
EPS X P/E Ratio = Share Price Valuation
(** P/E Ratio for Marijuana Industry = 20.00 Presumably)

$12,000,000 ÷ 391,597,994 Shares (OS) = .0306 EPS
.0306 EPS x 20 P/E Ratio = .612 Per Share

So, this means that based on one harvest, CGRA if they do a deal to keep the OS constant and acquires Wildfire Cannabis which is their option to do so, would be worth somewhere in the area of .61+ per share per harvest for indoor marijuana cultivation. Again, this would be their value from just one harvest. Based upon the BOTEC Analysis Reports, indoor marijuana cultivation operations is expected to do anywhere from 4 to 6 harvests per year. This could potentially mean a valuation for CGRA from 1 to 6 harvests per year based on the above calculation of 1 Harvest equals a .612 Per Share Valuation for CGRA:

1 Harvest Per Year x $12,000,000 Net Income Per Harvest = .612 Per Share
2 Harvest Per Year x $12,000,000 Net Income Per Harvest = $1.22 Per Share
3 Harvest Per Year x $12,000,000 Net Income Per Harvest = $1.83 Per Share
4 Harvest Per Year x $12,000,000 Net Income Per Harvest = $2.44 Per Share
5 Harvest Per Year x $12,000,000 Net Income Per Harvest = $3.06Per Share
6 Harvest Per Year x $12,000,000 Net Income Per Harvest = $3.67 Per Share

I think some are not fully grasping the magnitude of what we have here in CGRA. The above valuation is just from one company coming into CGRA because of them now having their license.

To get an even better idea of the magnitude of a deal of this nature, use the Substitution Property to mix and match some numbers to see what a new CGRA valuation would be. For example; let’s say that CGRA gave Wildfire Cannabis a total of 10 Million shares or 20 million shares or … or 50 million shares to acquire them instead of using any cash. Although there would be an increase in the OS proportionately, you will see that the valuation for CGRA would still be huge. Even if they doubled their current OS (of which I truly do not expect), their valuation would still be huge. CGRA, through its wholly owned subsidiary Chewelah Properties, LLC has obtained their license to legally produce and/or process cannabis/marijuana and its byproducts within Stevens County in the state of Washington. This is absolutely huge. IMHO