While we’re both clearly bullish, I respectfully disagree with your thesis at least near term. It’s all about California. The distribution prior to buyout was around 175 to 200 dispensaries and they were doing $15M a year. Due to pricing pressures, lack of funds and distribution along with quality issues the brand lost the top spot for the premium market. With the Indus platform underneath this brand I think they have the potential to quadruple sales on an annualized run rate as they exit 2021 with aggressive marketing and distribution expansion (not to mention the tailwind of added retail coming online throughout many counties in the state offering even more potential shelves for product. The brand equity must be fully built and the leader trophy claimed in the California market before aggressively looking toward inter-state commerce. Lowell was selling 1100 - 1300 lbs a month last year, if you quadruple that you’ll quickly realize the current cultivation footprint (and especially the currently poor yield throughput ) cannot even support just the potential premium flower sales in California. Once they close on these added cultivation sites and complete buildouts, hopefully within 12 months, then they’d actually have capacity to meet the Cali market and start crossing borders, assuming legalization includes inter state commerce. The bigger question for now is how is George maneuvering with these licensing deals? If/when it is the dominant brand leader of California, the equity value premium would lead to some far better lucrative licensing deals or does he continue to opportunistically take the cash now and sign more deals like he recently did with AWH.
