I'll agree with one thing from this post- the info from the new deal hasn't been released. Other than that I'm almost speechless and here's why:
1. NUGS posted just under 16k for the previous year, across all brands under their umbrella.
2. a small 6 acre planting was initiated with personnel the company obviously did not have full confidence in. Lets do the math- NUGS farm north is projecting 120k lbs/year?!? In 6 acres we have 261,360sqft. If we assume that the cultivators handling the first plant were capable of producing an industry average of 40g/sqft, and ALL 6 acres were planted, we'd have a yield of 23,047 pounds. Multiply that x4 projected harvests and we have 92,188 lbs/yr (x5 - 115,235lbs). Assuming that we can sustain $1,100/lb (flower only) we're left with just over 100mil in revenue (of course this doesn't account for the pocket change from the portfolio). 100mil is nothing to sneeze at but not big league by any means. I think you would be remiss to consider 143mil an obtainable figure. This math also relies on achieving and maintaining industry averages. (if my personal assessments are anywhere near correct we're looking at more like 15-17k lbs from the first harvest... equalling 14.6 - 16.6 million or just over 62 mil/yr)
3. unless this cash infusion just happens to be GIGANTIC I don't see a feasible way for NUGS to even jump into the same ballpark as the big boys, especially not in the next few years. Consider the lag time to even get a single clone planted... Arguably, the new management could help turn things around in regards to the companies timing but... Either way, major players have a HUGE head start in genetics, facilities, partnerships, etc. (you do the math)
4. NUGS is trading at +18k times revenue... wild west or not, this can't be ignored. This is a big, multi-level, red flag and cause for concern.
What exactly should be put in this pipe and smoked?? To my knowledge we've yet to produce any product...
The PR mentions a "fundamental shift" in the companies business... how hard is it to be good at ONE thing before moving on to the next? Jack of all trades and a master of none is a looming recipe for disaster. Chart a feasible course and make it happen! Maybe breeding a new cultivar that helps with ADD would benefit this management group.
The realist in me can't ignore the red flags and pending dilution.
The optimist in me hopes the new deal is enough to make NUGS competitive and helps to regain support.
Either way, time will tell. At this point I'll be happy just breaking even.
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