Company Profiles
Investment Analysis and Valuation of the Cannabis Industry
The Latest Company Profiles
Canopy USA! – UPDATED
Canopy Growth announced a series deals and new share structures to enable Canopy to acquire its US cannabis targets (Wana, Jetty, Acreage, and possibly some of Terrascend) by September 2023. Canopy stock is up 43% on the news and Constellation is up 4%. What are the...
EBITDA & Leverage – Higher Than You Think
As valuations and liquidity have declined since the first quarter 2021 (when the industry raised over $3 billion in equity), debt has become a go-to source of financing. What is the leverage in cannabis? It may be higher than you think. There are also debates on if...
Weedmaps – more unlicensed clients?
Weedmaps is again in the news for servicing unlicensed operators in southern California, this time with delivery apps that either do not have a license, or are illegally renting someone else’s license. See this article by veteran reporter John Schroyer at MJBizDaily...
Implications: Canopy Conversion Repriced -92%
Canopy Growth (CGC) is issuing between 56.7-78.4 million shares to retire C$255.4 million of its C$600 million convertible note due 2023. The conversion price for this redemption works out to somewhere between US$2.50-3.50, and will be based on the 10 day average...
ParentCo: Less Dilution offset by Signaling
This is a follow-up to the January 16, 2022 article analyzing the contractually mandated dilution due to existing contracts at the Parent Company, which noted the potential signaling by the recipients. The 1Q22 10Q answers that question:
Podcast: Chat with Rena Sherbill on Seeking Alpha’s Cannabis Investing Podcast
Thanks to Rena Sherbill of Seeking Alpha's Cannabis Investing Podcast for interviewing Mike and thanks to Colin Ferrian for joining our chat and getting the band back together for a one-off conversation.To quote the summary and transcript (available here) of Rena's...
Agrify: Proxy Insights & Customer insights
Agrify’s 2021 Proxy came out this morning, and there is more information regarding the ownership of the largest customer (as detailed in this post on 4/1/21), as well as the share authorization. This also includes the takeaways from Benzinga, insights into the new...
Agrify’s Biggest Customer is a What?
Agrify’s 2021 10K came out last night, and there is a surprising new disclosure regarding customer concentration. We expect this to impact the way investors think about the valuation of the company going forward. This post been UPDATED on 4/4/2022 with additional...
Cresco-Columbia Care Merger & Earnings
Cresco Labs (CRLBF) announced a stock-swap merger with Columbia Care (CCHWF) on the day of its 4Q21 earnings, and Columbia Care gave disappointing guidance the next day. Our analysis of the deal, the quarterly reports, and the comments regarding asset sales and market...
Agrify: Implications of the Senior Secured Note
Agrify announced that it borrowed $65 million under a new $135 million senior secured note, and yet the stock dropped 25% shortly after the announcement. Why did the stock drop? Why did they borrow $65 million when they already had $100 million of cash on hand? What...
Weedmaps 4Q21: Reinvesting Most of the EBITDA
Weedmaps reported 4Q21 earnings (presentation) and updated guidance for 2022; revenue beat the reduced expectations of 3Q21, revenue guidance for 2022 was reiterated, while profitability guidance was significantly lower than expected as the company increases...
3Q21 Earnings Reviews in Extract Archive
3Q Earnings Reviews from the Weekly Extract Archive for Extract Subs As we enter 4Q21 earnings season, we have consolidated the 29 cannabis company earnings reports from the 3Q21 earnings season published in the Extract Archive into a single note to help investors...
What is ParentCo Cash / Share? The problem of guaranteed dilution
As a friendly reminder that per page 35 of the September 30, 2021 report, 33 million ParentCo shares will unlock on January 28, 2022. UPDATE on Jan 28, 2021, the management voluntarily extended the lock-up by one year, but this lockup expires if any US plant-touching...
Agrify Signs Largest Deal to-date with Gold Leaf
Agrify announced the company's largest Total Turn Key (TTK) deal to-date, and this deal comes a few weeks after a short-report questioned the integrity of the company's customer relationships, pressuring the share price of the stock. Premium members can read our...
What’s left of Curaleaf’s $425m new debt after refis?
Since this was originally published, Curaleaf upsized the deal by another $50 million, so add simplistically $50 million to all figures below. Curaleaf just raised $425 million of notes due 2026 at 8%; the size and access to capital is impressive in itself. The stated...
Schwazze, A Refined Strategy & New Acquisitions Presents an Opportunity for Institutional Investors
Schwazze Shifts Strategy and Grows via M&A As we have noted in the past, Schwazze is a Colorado consolidation story run by Justin Dye who previously consolidated Albertsons and Safeway at Cerebus. The company acquired the highly profitable Star Buds chain, and it...
Cannabis SPAC Analysis – November 2021
On October 19, 2019, Mike Regan presented on SPACs (Special Purpose Acquisition Corps) at the MJBizCon Finance Forum. The presentation walked through: Key risks to investing in SPACs How to invest across the SPAC lifecycle process The players and incentives during the...
Weedmaps cuts guidance; Where will margins stabilize?
MAPS guided significantly below prior guidance for 4Q21 and 2022, blaming softness on a demand shift to the illicit market and slower than expected license issuances. Our more detailed review and updated model for Premium Members can be found below. While the...
UPDATED Canopy-Wana & Cronos-Pharmacann Options: Smart for Sellers, what do Canadian LPs get?
Canopy is paying $297.5M for the right to buy Wana Brands when it “Federally permissible”, and Cronos paid $110.4 million for the right to buy 10.5% of Pharmacann when legal. What exactly are they getting, why are they buying, and why is it smart for Wana and...
How Much Trulieve Can Harvest Founders Sell Now?
We learned this week that Harvest founders Steve White and Jason Vedadi (who left the company last year) own a total of 6.5 million shares of Trulieve worth $184 million as of October 4. How much is locked up, how much could be sold immediately, and when does the rest...
RIV Capital, A Well Capitalized Shell for Private US Operators
RIV Capital (OTC:CNPOF, CSE:RIV) is is a public held investment fund with multiple near-term catalysts and a compelling valuation. Premium Members (sign up here) can read about this opportunity, with both bull and bear cases, valuation, and download a working model...
Glass House Brands: A De-Risked Opportunity to Invest in Scaled Production
Glass House Brands is a SPAC that has traded down to $5.00 on funding and pricing concerns, but they recently closed on the acquisition of the 5.5 million square foot Camarillo greenhouse in Ventura California. We think this is a very interesting opportunity for a...
Brief Thoughts on JT Burnette/Trulieve and the Weekly Florida Insights
The weekly Florida review includes a working model with price checks of every operator’s flower, pre-roll, vape, edibles, and concentrate products, the weekly discounting trends, market share analysis, and all OMMU data. This review is based on the August 15, 2021...
Weedmaps, Q2 Review & Updated Model
Premium members can read our analysis on the Q2 2021 results from WM Technology, formerly known as Weedmaps. This article also includes an updated working model with capital structure, valuation, client counts, and more.Weedmaps reported 2Q21 and the results were...