Sundial Growers Inc (SNDL)

[BefallenKnight]

Sunstream commitment is interesting but my concern is that even with a $500mm investment from SNDL and comparable monies from SAF, that really won’t be much venture capital. I know it sounds crazy that $1b+ isn’t a lot of dough to spread around but Constellation Brands “testing the water” with an investment in Canopy was more than $4b…in addition, when US legislative changes are made to grant public institutional access to close to the plant companies, billions of dollars will pour into the cannabis industry…Sunstream will have to use the money wisely in the short time they may have if they want to compete or build a portfolio worthy of a major buyout.

Side note: since cannabis is still federally illegal in the US, public companies are not allowed to invest in close to the plant companies. Therefore institutional investment in the cannabis industry is exceptionally low. This is an atypical situation where the little investor can actually get in before the big players. Unfortunately, with < 5% institutional ownership and < 1% insider ownership, there are loads of free shares, making retail shareholders responsible for about $1.5b worth of shares. That imbalance makes a short squeeze less likely but it does provide the little folk a window of ownership to acquire a decent amount of cheap shares.

Disclosure: Long 36k shares, short lots of covered calls…..holding thru July/August before selling. Also at some point the broader markets are going to collapse. Has to happen, when not if. I’m not sure how that will affect the cannabis industry since it may be one of the only areas for growth