From the call, not getting a lot of attention, but I think are primary growth drivers:
1. Everett talks about 2.0 products taking up market share from flower/prerolls and shows US category market share vs. Canada - notice that most of the shift would be TOWARDS Valens products, not away from. This means we get 2 growth drivers in 1: 1) The rapid growth of the overall Cannabis market in canada, and 2) The rapid shift of that growing usage from Flower to 2.0 products. This is huge - this is FREE GROWTH when you have deals. Can't underestimate this.
2. The stats on Women I somehow missed - but women being twice as likely to use non-Flower products than men is also huge when you take the no less than 5 hints that "health and wellness" will be the primary growth driver - this is a tough space, brand is EVERYTHING. The ONLY way to break in here is with a big partner - and I actually think outside of beverages this is where we may have a very large CPG in line. Maybe even the one that gets us to the U.S. - remember 3 of the 4 speakers mentioned H&W growth AND U.S at the same time - something going on here
3. EBITDA growth driver - Everett's commentary around price compression and their cost of materials. He specifically says "this is a huge tailwind for us on profits in the quarters to come". This IS big IMO especially as we've seen the costs go north recently on other expenses as they scale for K2 and Pommies.
4. Go to 27:23 and listen until 28:55. Everett hints at something, and none of us have any idea how to quantify it, it could be small, it could be absolutely huge as well. "As we've been having conversations with future customers, more and more of these customers are saying wow, you guys can do this for lower cost than we can. And these previous LP models where they wanted to do everything, and new management comes in and they have a focus on actual efficiencies and driving revenue and EBITDA. We're having better and better conversations where they are looking at our low cost platform" I think he's hinting at a very good chance that maybe some of the LPs get out of the business of manufacturing their own 2.0 products and will just outsource it to the likes of a Valens. It's huge, insanely huge, if they start producing those products that go into the market with a name like Canopy, or Tilray, or Aphria. Not saying its happening - but I'm starting to read it that way :)
Nothing new for you guys, but I remembered something said and so went back for a listen to the early part again :)
AI
