When I put the $17 target on Tweed in 2014, it was based on them hitting $100M in sales with 60% gross margins. At the time, Tweed had roughly 35M shares outstanding and was trading around $100M market cap.
People laughed, and with the exception of a few from this board, most thought I was out to lunch. In the end, I was the one laughing when my sales order went through on that memorable day of hitting $17 a share. Shortly after, I reloaded for nearly half of what I sold them at. I then liquidated those shares in chunks during the run up. I finally got rid of the last couple thousand shares in the $33 and $34's.
This has forever changed my life. Everything I own is from my investment in Tweed (Canopy). I live much better than I did before, I can retire much earlier than ever thought possible and I have more to invest and play with than I ever would have thought at this stage of my life.
I say all this so you know the next thing I'm going to say isn't coming from a hater, but in fact one of Canopy's biggest lovers (I have a friggin wall of Tweed and Canopy gear in my man cave paying homage to what I call my Canopy Wealth Experience). But the fact is, I not only am no longer long on Canopy. In fact, over the last couple weeks, I have taken up "short" positions via put options with different timelines and strike prices.
This decision does not come easy and I am not advising anyone else to follow my decision. I just felt that after seeing how big a hit my $17 target was on this board for such a long time, it was only right that I announce my new found feeling and positions here. I will say that I feel my decision does
come after careful analysis of the overall market as well as taking into consideration the international opportunities and diverse investments of Canopy.
My new valuation of Canopy also takes into consideration the announced approaches from all the provinces with regards to their distribution models and the change those different models will have on the bottom line for Canopy wholesale. Fully owned retail distributors of Canopy (Tweed Mainstreet locations) was the hardest to account for.
Regardless, every model I have attempted, puts us at a much lower valuation than the current market cap.
When I first found Tweed, they were undervalued at $100M valuation and projecting $100M in sales. My math didn't add up and I had to invest! Now we are here at $100M in sales and in the same position but overvalued. The models I've used don't come anywhere near $8B. I think a reality check will be in store. Whether or not that reality check is initiated by near term financials (first since listing on NYSE) or a couple quarters into rec is yet to be seen, but once again my math doesn't up and I had to go "short".
