- x Marijuana Business We follow the money. WELCOME SMOKERS! click here for the latest blog
Big Booze is on the Move
Can the soda pops stop the boozers from controlling the marijuana market?
Will Coke kick some cocktail?
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- x Two Strong SELLs 11/09/2018 MARKET CLOSE - Tilray TLRY $108.99 - Medmen MMNFF $4.99. click here for our advice
- x Our Bloggers Businessmen and entrepreneurs Van Stratton • J.K. DeBeers • Wrique O'Shay click here to read on
A blog from an insider's perspective of the fast-growing cannabis industry.
Research. Smoke Weed. Think Ahead. Write.
Marijuana Business - Blog #5
Title: Midterms & The Market
Post Date: Saturday, November 10, 2018
Writer: Wrique O'Shay
There’s not enough OWs in WOW to keep up with all the drama regarding the 2018 mid-term elections and what seems to be on many minds, how will all of this effect the economy, especially the stock market and cannabis? Whew! I’m already dizzy, but let’s forge ahead.
What’s happening in front of us now, historically, has occurred before. To borrow some facts and stats from recent articles and my own personal experiences (market-wise), the general consensus from these sources, whose function is to track and report, have concluded there appears to be an upswing in the economy a little before and up to as many as nine months after midterms. Another conclusion shared by experts, is this up swing is mostly due to overall economic growth more than the election.
Now, all this might be true…in the past, but these articles were written just before the recent 2018 midterms, which by the way as of this writing, are still counting ballots in Florida. The BIG question for us in regards to what we all have in common on this blog, is how will it affect the cannabis industry? Especially with Canada.
Does all of this just add more confusion, or should we just take a minute and turn the telescope around and see the whole picture. When we do, everything looks smaller, but there is a slight glimmer of light at the end of this long tunnel.
Two of the last three days saw our cannabis stock, generally across the board, and please excuse the pun, go green. However, holding true to Newton’s Law of gravity and the unwritten principles to which the stock market was founded…what goes up, must come down. But here’s a trick. Come closer to the screen as I have to whisper this…”It’s all in the timing and patience”. Okay, you can move back now. The market will always be driving up and down, at times it sits and idles, but mostly it’s bouncing up and down. And as we just saw in the last few weeks, a super dip in the market. Those in the know just held their collective breaths and waited to exhale …sometimes a couple of days later, then scratch their heads and take another deep breath. The Cannabis companies that we are now watching, trading, discussing haven’t changed their strategies…yet. Understand this is a waiting game. Canada is still understanding the monster they just let out of the box, with the enormity of capital and regulations, all as a result of kicking the door open on cannabis.
So, we watch, we wait, wait some more then take the leap of faith, like double-dutch jump rope; you’re either in the groove jumping rope or you’re not.
Marijuana Business - Blog #4
Title: The POT World - Canada: Boom or Bust
Post Date: Sunday, November 4, 2018
Writer: Wrique O'Shay
The POT world certainly ain’t what it use ta’ be, and that’s for sure. With all the stocks and numbers being thrown around every day, it’s no wonder most folks just can’t quite get their heads around it. Every day I see and hear pot investors running from one side of the boat to the other trying to jump in and get rich. Reminds me of a time back in 1998 when all of a sudden there was this thing, looming large that everyone was hearing about that was a total mystery and was “going to change” everything. I think what they were referring to was a little thing called, the Internet and Dot Com’s. There they were all dressed up with no direction. But after some time, it just caught on fire and well, here we are discussing legalized pot, with literally 100’s of websites selling pot in one form or another. In a funny way, I’m seeing the same thing happening now with Canada. After all of the states battled it out for medical marijuana. After all the petitions regarding cannabis medical benefits. Then all of a sudden Canada jumps up and announces, Hey! We’re legalizing pot! In the whole country! Man, did I feel great about that. I thought, oh boy, we can’t be far behind now. So close… but no cigar…yet! So, what’s it going to take?
We all know the answer to that, of course it’s decriminalization. So close, yet so far. I even thought when the DEA and the FDA agreed that CBD actually had medical benefits, ah duh! But wait a minute, we’re still waiting. I felt for sure this was going to crack the egg. But alas, the egg is still intact. I feel like that old saying of two steps forward, one step back. After over 25 years of medical studies, expert testimony from the people in the know and still we can’t seem to get out of first gear.
Canada, I believe is certainly on the right track, only most of the potential investors are forgetting some import marking strategies such as Canada is another country, right? Transporting between the US now becomes a bit tricky, legal-wise. Aside from that in 1-2 years it will most likely be decriminalized here in the US, not to mention the US easily outgrows Canada, even now. Can you imagine when the black cloud is lifted. Boo-yah! So how do we make money from cannabis sales in Canada? And if you ever have been in the stock market, you know it’s a journey not for the timid. Especially now. Everyday new penny stocks hit the market. The main thing you need to be careful about these penny stocks is that most of them are really not there. Almost like an illusion. I mean, there it is on paper, with all kinds of cool things being touted about it. I have friends buying 1-2 million, yes millions of shares, just hoping the stock goes from, .ooo1 to just $1. Has it happened, I thought, not yet. However, to go from a penny stock to an OTC stock is a serious move. I have been watching and investing like many of us and actually found a stock that is still affordable, not a penny, but definitely worth a look, and appears to be on the move. (I.e.) last year 11/06/17 this stock was selling at $2.36, as of 11/02/18 its last price was $7.11 with a change of +0.410. Is this a rising star or not, who can tell, it’s the stock market; welcome to the wild west of finance? The stock, if you’re wondering, is what else , but a Canadian stock, symbol ORHOF, Origin House, originally Cannaroyalty Corp Com.
This article is the sole opinion of the writer and is in no way a solicitation to offer or sell any stocks.
Marijuana Business - Blog #3 • Click here for full PDF with graphs and photos
Title: A Snapshot of Canopy Growth, Aurora Cannabis and GW Pharmaceuticals
Post Date: Thursday, November 1, 2018
Writer: J.K. DeBeers
The marijuana industry is vastly expanding in all directions every single day. There are hundreds of new companies preparing IPOs and a decades-old publisher (e.g. High Times’ Adam Levin) raising capital. But with rapid growth and hype comes plenty of losers, winners, and fakers in a de-regulated marketplace. Let’s take a look at three of the largest market cap marijuana corporations that currently trade on international stock exchanges:
Canopy Growth Corporation (ticker: CGC)
Canopy Growth has a current market cap of $8.5 Billion dollars, Revenue of $66 Million, a Net income available to common shares of -$106 Million.
Canopy's market cap is insanely high. When pulling up the stock quote, I accidentally typed in CG. CG is the Carlyle Group, an investment corporation with a PE of 11.71 and a market cap of 7 billion; that’s $1.5 billion less than a corporation that loses $100 million+ a year. The contrast between a marijuana stock and a company like the Carlyle Group can’t be any more different. The fundamentals of Canopy’s market cap at current EBITDA valuations is more of a psychotic hallucination than anything else. For the past five years marijuana penny stocks have been running rough shot over the SEC and fleecing naïve investors who are hoping for national legalization. However, most of these penny stocks are nothing more than marketing organizations that are conducting pump and dump schemes. The difference between OTC marijuana penny stocks and Canadian listed growing/retail/manufacturing companies is a big one. However, it’s only a matter of time before Canopy and the other marijuana stocks we are about to cover come down to valuations that are much more in line with traditional consumer goods manufacturing corporations. Once the high wares off of the growth potential of Marijuana stocks, there won’t be many munchie mutual funds or institutional investors looking to invest in over-valued assets.
Aurora Cannabis Inc. (ticker symbol: ACB)
Aurora Cannabis is the Motley Fool’s #2 evaluated marijuana stock and it resembles the operations of Canopy Growth very closely. It’s hard to believe that the market cap of Canadian growers and dispensaries is worth many tens of billions of dollars.
One way that Aurora and Canopy hope to invest their capital raised is by hiring hundreds of workers:
The job openings at Aurora and Canopy are very similar and a good indication that the cash on hand will go towards hiring workers to help grow the company. The CEO Terry Booth has a lot of work to prove a $6.5 billion dollar valuation.
GW Pharmaceuticals plc (ticker symbol: GWPH)
The #3 stock according to Motley Fool is GW Pharmaceuticals.
GW seems to specialize more in the pharmaceutical pill component of THC/CBD and their balance sheet looks very strong compared to Canopy and Aurora. If you are looking for a marijuana business that resembles a more traditional pharmaceutical corporation, GW Pharma would be the preferred investment choice. However, the big opportunity in marijuana is not necessarily the pill form of CBD/THC; many billions of dollars in sales revenue will be derived from the flower form over the next decade now that de-regulation and legalization is coming into full effect globally.______________________________
Marijuana Business - Blog #2
Title: MedMen: Breaking the law, breaking the law
Post Date: Wednesday, October 31, 2018
Writer: Van Stratton
On October 25, 2018, MedMen released it's 4Q 2018 numbers and showed $20.6 million in sales coming from it's 13 open dispensaries. For the year, MedMen showed $39.8 million in sales from more than 700,000 transactions. The sales netted a profit of $13 million. By the end of their fiscal year, they showed $79 million in cash, $81 million in liabilities and over $100 million spent on operations. If you closely examine their expenditures, you will see a foolish waste of big money. And this does not include the $682 million in stock that MedMen paid for PharmaCann. I don't know what restrictions were on the stock but if they don't sell it soon, it's going to be worthless. That is my current valuation for MedMen. Zero. To say MedMen overpaid for PharmaCann is an enormous understatement. PharmaCann's assets are worth <$20,000,000. Much less. Soon, MedMen CEO Adam Bierman will be looking to sell more stock as he continues to burn through investors' capital. This is bad for several reasons. MedMen cannot sell their way out of this mess unless they have a secret and successful strategy to sell online, which is the future of the marijuana business.
Let me clearly explain my current zero dollar valuation for MedMen. MedMen is selling a controlled substance in multiple locations across multiple states. MedMen utilizes cashless ATMs at it's stores as a workaround, since banks will not do business with cannabis sellers and Mastercard and Visa are unwilling to code cannabis sales. These two facts alone make the company too risky to operate, let alone to invest in. At any moment, federal agents could interfere with MedMen's business. And federal agents have many ways to interfere. And federal agents don't care about state laws. Accepting cash for weed, no matter where the cash comes from, violates federal law. Furthermore, the feds can easily show that the cashless ATMs are used to facilitate the sale of a controlled substance which is bank and wire fraud under federal law. At any moment, federal agents could interfere with MedMen's business. Federal agents, federal agents, federal agents. It sounds scary because it is. Happy Halloween.
NOTE: Even if MedMen avoids federal interference, I still only value the whole company at $60 million or .85 per share.
Marijuana Business - Blog #1
Title: Boozers vs Soda Pops
Post Date: Monday, October 15, 2018
Writer: Van Stratton
Two months ago American company Constellation Brands of Victor, New York, owner of Corona and Pacifico beer, Robert Mondavi wine and several other alcohol brands, invested 3.8 billion dollars in Canadian marijuana grower Canopy Growth. Constellation now owns 38% of Canopy and has warrants to purchase additional stock that will give them more than 50% ownership. Canopy's CEO Bruce Linton says they're going to use the money for international expansion. He doesn't need to convince me that Constellation wants to grow weed in the U.S.
In the news last week, it was reported that Coca-Cola was considering making wellness drinks with CBD. Coke addressed the news on it's website saying, “We have no interest in marijuana or cannabis. Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly. No decisions have been made at this time."
Well, I think decisions have been made and Coca Cola will be producing cannabis drinks. And that includes drinks with THC. At this point, they don't want to talk about it, I get it. Two weeks ago Pepsico CFO Hugh Johnston said his company had no plans to invest in cannabis but is "critically looking at it." Investors appeared disappointed by the non-committal and pushed the stock lower. I understand why Mr. Johnston doesn't want to say Pepsico is looking to invest in marijuana. It's because the federal government can be ruthless. It's a fact that the U.S. Department of Justice is still seizing money and closing state-legal marijuana businesses. If I was a CEO for a Fortune 500 company today, I would publicly say my company is not interested in cannabis even if it was. Current leadership at the DOJ, specifically Jeff Sessions, recently seized assets from California corporations legally authorized by the state to do marijuana business. That's why Coke, Pepsi and every other smart U.S. company doesn't talk about weed. That's also why I give much credit and praise to Constellation Brands for making such a big move. Coke and Pepsi occupy a lot of shelf space but so does Anheuser-Busch who is even better-positioned to dominate the cannabis drinks space. I expect Anheuser-Busch will begin talking about marijuana drinks very soon. It's possible the boozers let the soda pops fight over the wellness drinks but I think they want a big chunk of that too. I predict alcohol companies will collectively, continuously and aggressively advance their positions to control the marijuana drinks market. The soda companies only hopes are to put the pedal to the metal and be first to market or I see their piece of the overall drinks market get even smaller. The overall marijuana drinks market will be fun to track over the next 50 years.
When marijuana is removed from the CSA, which I'm predicting will be in the fall of 2019, thousands of small farmers in the U.S., along with hundreds of global companies, will be competing for a piece of the marijuana market. California farmers alone supply the whole U.S. with 80% of the marijuana it consumes. The U.S. has zero need to import weed. Period. Still, to go off on a tangent for a sentence, I think two foreign countries will find success importing raw marijuana and marijuana products to the U.S. and that will be Mexico and China. Growers in Canada will not be an important or notable supplier to the U.S. They never have been and they never will be. But don't get me wrong, Canada is still at the top of my favorite country list. In two days, Canada declares recreational marijuana legal nationwide for adults 19 and over. Another historic day for the cannabis history books. Only the second country, after Uruguay, to be so fair and forward-thinking with respect to cannabis. I hope the U.S. is number three.
We salute Canada for declaring marijuana legal nationwide for adults 19 and over.