Medicine Man Technologies Inc (SHWZ)

[olivernoyes]

Most MSO's are not positioned to be ready for the intense competition of interstate commerce. JD and team are already there, operating in perhaps, the most competitive market in the country.

This is a big reason why I am confident in my investment here. The grocery business has razor thin margins. Dye did amazing things at Albertson's. I forget the exact numbers off the top of my head, but he took Albertson's from something like 1,400 money losing stores, to 2,800 profitable stores over the course of just a few years. And made himself, and others millions in the process.

Now he's taking some of those profits and investing heavily into SHWZ and he seems to have a clear plan and vision for how to make Schwazze the Albertson's of cannabis.

As was previously mentioned, between JDs shares and those of the rest of the board, they can easily vote down any potential acquirers.

He has said very clearly that he wants to build a regional dominance, and then build out from there. He's also said he would happily accept the company becoming acquired by a bigger fish, but not until the share price is $100+. I can live with that.

He's keeping operating efficiencies low, which is important. It shows he's a good steward of capital. Our capital. I feel confident in his ability to do with SHWZ similar to what he did with Albertson's, which was to be laser-focused, data-driven, really understand the CPG industry well, and understand branding and marketing well, and the value of having private label brands.

The challenges I see right now with building out stores vs. purchasing existing stores are that 1) material and labor costs are very high right now due to the supply chain issues brought on by the COVID pandemic. 2) because of the two year lapse of construction there is a huge pent up demand for contractors, there are permit delays, etc. 3) Time is money. In another couple of years it might be more cost-effective to build out vs. buying existing stores because you can get it done cheaper and faster and at lower interest rates. 3) Speaking of interest rates they are going through the roof right now. Is this really the best time to be renegotiating the loans? Like Doc said, they're not worried about it, because they have sufficient margins to cover it. If they wanted to they could easily fix "the interest problem." They will do it when it makes the most sense, but right now it seems their primary focus is on integrating the newest purchases into the fold and looking for other possible expansion opportunities.

I like what they are building. I see great things ahead. I haven't sold a share, and have been nibbling down here to get my avg cost down, but I still feel it might drift even lower between now and August, just because the stock price is mostly driven by retail investors at the moment, and it seems like more and more retail investors are tapping out as of late, so a continued slow drift in the share price seems to me like where we are headed. For me that's okay though, because I am in it for the long haul, and have lots more dry powder so I'll buy more on the way down.

But eventually SAFE is going to finally pass and that will be the rocket fuel we've all been waiting for. The only other driver to influence the share price would be acquisition announcements, which at best will give a temporary bump but then right back down, or at least that's been the recent history of the share price.

Hang in there guys, we're coming into summer, which is never terribly fruitful, but come this fall I think the retail investor might come back, because a) some of these cannabis companies are starting to look like value plays, and not just growth plays, and 2) Come fall there is going to be lots of news about SAFE (whether or not it actually happens there will be an industry bump. Sustainable, who knows? But just the headlines will cause a bump either way.

None of us knows for sure what the future holds, so who knows what's really going to happen? Good luck to us all.