Author Topic: marijuana stocks  (Read 2317 times)

pcm983

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marijuana stocks
« on: August 28, 2018, 09:57:52 PM »
at the risk of getting laughed out of the room in a value-oriented investment club...

think the STZ deal does make this a "real" industry now. valuations obviously seem pretty high when you have these unproven enterprises trading at or above the tev / sales levels of high growth SaaS companies, which themselves could be argued are expensive.

one I've just started looking at that seems interesting is Green Thumb Industries - seems to be much cheaper on TEV / Sales vs. Tilray and this company actually has exclusively U.S. exposure through state licenses vs. many of the peer stocks which are exclusively Canada.

Also the founder / current CEO is a professional investor and the grandson of the founder of Jim Beam.

Currently at ~30x TEV / run-rate sales which is obviously high relative to any company, but that said revenues grew 300% YoY and 25% QoQ.

The long-run question which remains up for debate is whether these end-up being commoditized businesses in the long-run or whether they end up being classic CPG businesses or bear substantial resemblance to alcohol / cigarettes in terms of profitability and brand power.

While demand is definitely there, it does seem like there is an onslaught of supply coming online as well and I have seen some stories about a supply glut in different regions.

https://business.financialpost.com/cannabis/jim-beam-heir-turns-to-pot-with-plan-for-a-cannabis-empire-1
« Last Edit: August 28, 2018, 10:00:09 PM by pcm983 »


pcm983

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Re: marijuana stocks
« Reply #1 on: August 28, 2018, 10:01:00 PM »
at the risk of getting laughed out of the room in a value-oriented investment club...

think the STZ deal does make this a "real" industry now. valuations obviously seem pretty high when you have these unproven enterprises trading at or above the tev / sales levels of high growth SaaS companies, which themselves could be argued are expensive.

one I've just started looking at that seems interesting is Green Thumb Industries - seems to be much cheaper on TEV / Sales vs. Tilray and this company actually has exclusively U.S. exposure through state licenses vs. many of the peer stocks which are exclusively Canada.

Also the founder / current CEO is a professional investor and the grandson of the founder of Jim Beam.

Currently at ~30x TEV / run-rate sales which is obviously high relative to any company, but that said revenues grew 300% YoY and 25% QoQ.

The long-run question which remains up for debate is whether these end-up being commoditized businesses in the long-run or whether they end up being classic CPG businesses or bear substantial resemblance to alcohol / cigarettes in terms of profitability and brand power.

While demand is definitely there, it does seem like there is an onslaught of supply coming online as well and I have seen some stories about a supply glut in different regions.

obviously a big reason for the run in the comps to Canopy is speculation on STZ copycat deals by the likes of spirits players or CSD players which is being reported on in the press.

https://business.financialpost.com/cannabis/jim-beam-heir-turns-to-pot-with-plan-for-a-cannabis-empire-1

DCG

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Re: marijuana stocks
« Reply #2 on: September 20, 2018, 06:05:26 AM »
WTF...Tilray..which is expected to do sales of under $40 million this year (and is not profitable) had their market cap go up to $28 billion yesterday, just based on their CEO basically saying a pharmaceutical company should buy them in an interview with Jim Cramer.


...not a bubble at all


Liberty

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Re: marijuana stocks
« Reply #3 on: September 20, 2018, 06:36:48 AM »
WTF...Tilray..which is expected to do sales of under $40 million this year (and is not profitable) had their market cap go up to $28 billion yesterday, just based on their CEO basically saying a pharmaceutical company should buy them in an interview with Jim Cramer.


...not a bubble at all

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SmoothSailor

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Re: marijuana stocks
« Reply #4 on: September 20, 2018, 08:36:50 AM »
I'm also in agreement with this. I think the vast majority of pot stocks are garbage but there might be nuggets here and there where you can find something great. The biggest problem I have with seriously pursuing this is the issue of Canadian investors who own cannabis-related companies having problems crossing the border...

Hopefully this will change? https://www.thestar.com/news/cannabis/2018/09/18/canada-us-urged-to-compromise-on-cannabis-at-border.html
« Last Edit: September 20, 2018, 01:48:06 PM by SmoothSailor »

DCG

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Re: marijuana stocks
« Reply #5 on: September 20, 2018, 09:18:53 AM »
I think the vast majority of pot stocks are garbage but there might be nuggets here and there


Nice pun..intentional or not.


I have absolutely no idea what differentiates any of these marijuana companies from the rest of them. While I indulge once in a while, the business site of this is way outside my circle of competency.


SmoothSailor

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Re: marijuana stocks
« Reply #6 on: September 20, 2018, 09:23:15 AM »
I think the vast majority of pot stocks are garbage but there might be nuggets here and there


Nice pun..intentional or not.


I have absolutely no idea what differentiates any of these marijuana companies from the rest of them. While I indulge once in a while, the business site of this is way outside my circle of competency.

I was so hoping someone would catch that :D

mcliu

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Re: marijuana stocks
« Reply #7 on: September 20, 2018, 05:21:12 PM »
Valuation still cheaper than crypto.

DooDiligence

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Re: marijuana stocks
« Reply #8 on: September 21, 2018, 07:13:07 AM »
If the Fed ever removes marijuana from schedule 1 listing, company's like Altria might start rolling up the best operators.

The best operators will all have one thing in common, ABSOLUTELY NO BOOTLEGGING.
There's no need if you're a good grower & have an effective marketing & sales team.
The temptation to bootleg is huge & the feds will catch poor operators eventually.

I have no interest whatsoever in marijuana stocks unless Altria winds up owning them (after they've done proper due diligence.)

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50centdollars

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Re: marijuana stocks
« Reply #9 on: December 05, 2018, 09:10:01 AM »
Anyone see this short presentation on Aphria at the Kase Conference?

https://www.youtube.com/watch?v=Rcr5tYPRwSk

Stock is down over 50% in 3 days. Presentation is pretty good. He laid everything out pretty clearly.
50centdollars