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Re: In Plain Sight post# 20435

Thursday, 08/10/2023 10:02:40 AM

Thursday, August 10, 2023 10:02:40 AM

Post# of 21240
All good points by both you, Doc and lazur. I was disappointed with how vague, and vanilla, the call was. I was disappointed by the Q&A...is anyone else starting to feel like this is becoming deja vu? It's like the same questions every quarter with a slight change to make them feel current. The whole thing was like a looming gray rain cloud...and maybe that is just NK. I mean, IMO, out of the entire call, the best part was the long term bullish commentary conveyed by JD, near the end.

I don't like the increase in debt from $127.8M to $155.4M
I don't like that the cash position was essentially halved...and they keep entertaining questions about store growth to 100 in CO and similar in NM -- LIKE WE CAN AFFORD IT RIGHT NOW.
I wasn't pleased with the stock compensation...but excused it as recent growth (Akimbo, Everest), just like I did with the increased OPEX.

I submitted 3 questions (going off memory...so not exact wording):

What is your production ratio to shelf ratio, per state, and what is the target ratio?
What are the transaction counts and basket size, per state, and how does the basket size compare to the state average basket size?
Why does the New Mexico dispensary site display 57 locations (41 RGreenleaf and 16 Everest) when the company states there are 33? Are these in the pipeline, transfer locations, lounges, or something else. --I have to check the transcript because there might have been some bread crumbs dropped surrounding this. Something like multiple licenses needed per the location for med/rec (not sure).

If I was to have a positive takeaway, it would, again, be the margins. aEBITDA was above 30%..BUT BUT BUT...the gross profit margin increased! NK make the comment that CO flower price was up for the first time in 10 quarters. It is up to just a smidge over $700...but then there were other 'in the trenches' pricing given:




If the company can set an company, and INDUSTRY, record gross profit margin while competing in markets where competitive pricing is at the bottom of the barrel ($4/g was also reported in Oregon in March of this year) it has to be (only) up from here, right? The second flower prices restore -- and that is assuming that they do, to around double where they are currently -- and the operator-to-market-demand right sizes (we have seen a downtick of dispensaries in NM from June to July, plus NK said on the call that CO trimmed licenses from 800 down to 700). It's those days that I look forward too...and hope to come (sooner rather than later).


Also, IPS, just a side note, on the call they mentioned Akimbo was their play at the "lower margin" CO medical market -- which they see as $200M per year. So I guess this is the 'take a hit to make the play' opportunity.
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