Medicine Man Technologies Inc (SHWZ)

[Marillionaire]

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Notes from Today's Townhall with Schwazze (10/11/22)
On today's Town Hall, we learned a few new things of importance (if you saw the call and wanted to add anything, feel free to do so in the comments and I will reincorporate them into the post):

Financial:

Schwazze still expects to be operating cash flow positive for the 2nd half of 2022 (excluding acquisition costs)

Each and all of Schwazze's dispensaries are profitable

EBITDA margins are in the mid-30%

The company has a new Distribution Center opening in Colorado which will cut costs substantially

Schwazze is always looking at cost efficiencies and layoffs/closures are not off the table

There are 137MM shares on a fully diluted a basis and ~190MM shares in total if you convert all debt and derivatives (this implies a market cap of around $228MM at $1.2 per share.

The company remains severely undervalued relative to its peers.

Operational:

Schwazze will have 3 to 4 more stores opened by year-end (which implies 40 or 41 dispensaries in total by year-end across both Colorado and New Mexico). Note: we are aware of least two of them which are pending in New Mexico based on the corporated website for R. Greenleaf and the other one or two dispensariesare likely in Colorado.

Schwazze is beating the market by ~15% in the state of Colorado

The reason Schwazze is unable to brand the same name across all stores is due to a limited license agreement with Starbuds for the state of Texas

New Mexico is growing as planned or better

The home delivery program in Aurora is doing okay but not expanding much and there are no real plans for New Mexico at this time.

Legislation:

Justin Dye, the CEO of SHWZ, for the first time believes that the various efforts in Cannabis legislation (e.g., SAFE, More, Descheduling, Decriminalization) are more likely to happen in the near term than not. If it did, it could 3x the value of integrated players such as Schwazze.

Strategically:

SHWZ is not interested in Oklahoma as its next state due to the market competition

Texas was a market Justin Dye seemed keen on as a possibility (and unlikely his commentary on Oklahoma, he seemed excited about Texas)

The company has no plans for repurchasing shares as it views there are better opportunities for growth (both organic and inorganic)