Monday, October 19, 2020 10:36:13 AM
Here is why I am here: I'm ignoring "promises of old" based on the old business model - everyone investing in MJ knows that nothing is certain - there are market and regulatory variables at every turn, and only companies with the right combination of cash, products, infrastructure, and guts will come out on the back side of this as stable companies that someday, will be compared to the rest of the market - this'll be a bit as pot stocks still have a lot of stigma to overcome.
I consider toll extraction to be "promises and expectations of old" and this is what everyone knew this company as - so a drop from ~$30M to $~17M and then $~18M scared the pants off of rookie investors, and those who chase headlines and stock lists when this "not so good news" was released.
If you actually look at the 52% - it's an insane number and one that now forms the baseline for revenue and growth moving forward. If you factor in all the variables that Valens has at play and ignore any "one-time bumps" that may occur in the future for large toll extraction orders - their business still appears to be one of the most legit in the industry. While not entirely accurate - I look at toll extraction orders to be one-time events moving forward, and I'm considering white-label sales to be their recurring revenue.
Don't get me wrong - we need Q4 and Q1 to prove it, but if these guys can create a sustainable model in the white label/product sales business, anyone in this for the long haul is going to be a very happy camper. Then we all take big profits the first time Valens posts a monster quarter on top of their already impressive sales growth when toll extraction comes back or one of the big guys places a monster order that nobody saw coming.
This isn't a pot stock - it's a niche manufacturing/personalization/distribution business that is 100% protected from digitization, in an unknown market with huge potential. When they show a history of consistent and growing revenue - the market will treat this as such.
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