Based on your assumptions IP, when we look specifically at DPWW and their contractual agreements to purchase their dispensaries once cannabis rules change, wouldn't the premium be higher.
For example, when I read their 10k it stated Seattle with 2018 revenue of approx. $4.2M was to be bought for $8M. Denver let's assume based on it's 2018 retail sales DPWW has shown in Q reports is higher at revenue of $6.5M would probably be around $11M to purchase.
If I look at current retail cannabis dispensaries, they should sell at 4-5 times revenue, maybe higher as it's in it's infancy. Let's use 4 times for this example.
If DPWW purchases both dispensaries outright when rules change for $19M and have current sales of $10M with a 4X buyout for any outsider, that puts their value at $40M for the two premium locations in Seattle downtown and Denver (multiple award winner).
Let's assume DPWW OS goes to 40M by time of buyout completion, if we take the $21M premium and divide by 40M OS, that gives us $1.90. Wouldn't that be a close to actual value of SP given those figures?
This analysis doesn't include the 3rd location which will open this quarter soon. That will be contractually purchases as well. It also doesn't take in a premium for their branding and how beautiful the dispensaries are relative to others I've visited in the NW. The Seattle location is downtown and in a high traffic area of Seattle I'm familiar with from living in Seattle and the Denver one is on Alameda Blvd near downtown and high traffic road I'm familiar with from a prior employer HQ nearby I'd fly in to visit periodically.
Right now our OS is around 28M, so putting the numbers I'm reflecting is conservative I believe relative to what you laid out. So my thought is that DPWW once they can acquire those dispensaries and put them on the books with $10M annual revenue and growing will offset any debt liability and still yield a SP above $1 and closer to $2.
Your thoughts and any other posters who have read their doc's is appreciated.
Peace.
CF
