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Investing in Cannabis Related Stocks

Discussion in 'Cannabis News and Activism' started by TwistedGray, Jan 13, 2017.

  1. OldNewbie

    OldNewbie Well-Known Member

    Canopy growth is not really "growing" anything other than pot and losses.

    Last QUARTER (Q2), they lost almost $375 million on revenue of about $76 million.

    Pretty soon, they'll be running out of other people's money.

    SMITH FALLS, Ont. — Canopy Growth Corp. reported a $374.6-million loss in its latest quarter as the company restructured its portfolio of cannabis softgels and oils.

    The cannabis producer says the loss amounted to $1.08 per share for the quarter ended Sept. 30 compared with a loss of $330.6 million or $1.52 per share a year ago when it had fewer shares outstanding.

    Net revenue in what was the second quarter of Canopy’s financial year totalled $76.6 million.

    That compared with $23.3 million in the same quarter last year before the legalization of recreational cannabis in Canada, but down from $90.5 million in its first quarter.

    The company says the second-quarter results included a restructuring charge of $32.7 million for returns, return provisions, and pricing allowances primarily related to changes to its softgel and oil portfolio.

    Canopy Growth also took an $15.9-million inventory charge related to the change in strategy which includes new retail pricing, a rationalized package assortment and a focused marketing and educational plan.

    “The last two quarters have been challenging for the Canadian cannabis sector as provinces have reduced purchases to lower inventory levels, retail store openings have fallen short of expectations, and Cannabis 2.0 products are yet to come to market,” Canopy chief executive Mark Zekulin said in a statement.

    “However, we believe these conditions are a short-term headwind in what is a brand-new industry, and Canopy continues to be best positioned with cash-on-hand, a world-class infrastructure, and a portfolio of intellectual property to deliver sustained, long-term market leadership.”​
    Madri-Gal, His_Highness and macbill like this.
  2. OldNewbie

    OldNewbie Well-Known Member

    I don't know if it is directly a "stock" thing, but, cheap Chinese manufacturing supply chains might be a problem in the near future. (Not just because of the cost of the tariffs.)


    Basically, when the smaller Chinese companies feel there is not going to be a long-term relationship with buyers because of political reasons, they get a bit...casual...with contractual (and other) responsibilities.
  3. TwistedGray

    TwistedGray Well-Known Member

    Timeout folks - this is about investing in cannabis stocks...let's keep it related to that; thank you :)

    ps: California's increased tax on the cannabis industry isn't going to help things.
    Madri-Gal likes this.
  4. OldNewbie

    OldNewbie Well-Known Member

    I assume you're talking to me, but, the supply chain is of great importance to many area of the industry. This is going to be a problem for vertically integrated industries.
    Madri-Gal and macbill like this.
  5. Vape_Or_Die420

    Vape_Or_Die420 Member

    I bought some Canopy Growth stocks because i thought it would be cool to own a piece of Storz & Bickel. Now i am worried that S&B has changed for the worst.
    Madri-Gal likes this.
  6. FlyingLow

    FlyingLow Team NO SLEEP!

    Canopy Growth took a dump. I don't think it will ever recover...
    Madri-Gal and OldNewbie like this.
  7. TwistedGray

    TwistedGray Well-Known Member

    ^ I keep telling myself it can't get worse...it can't get worse...but they surprise me week after week. I'm at the point of no return though; it's really just a matter of when I want to take a massive loss and stop bothering with the market because I'll never recover what I've invested/lost.
    Madri-Gal and OldNewbie like this.
  8. OldNewbie

    OldNewbie Well-Known Member

    You know there's a problem when the guys who grow and sell an agricultural product focus on intellectual property. The companies seem to need some claim to get drug-dealer money rather than farming and/or produce-section money.

    As the cannabis industry has moved to shed the “stoner” stereotype many have held of its consumers, several marijuana businesses are rebranding themselves via name changes and other steps to try to reflect the companies they’ve become.

    Whether the decision revolves around an initial public offering (IPO), including Akerna’s, or the acquisition of multiple dispensaries such as Cresco Labs, many companies are working toward creating a unified, professional brand.

    Bill Winchester, president and chief creative officer of marketing firm Lindsay, Stone & Briggs, which has offices in Madison, Wisconsin, and Minneapolis, said the following are other potential reasons a marijuana firm might rebrand:
    • It has launched new and different services.
    • The competitive landscape in the industry has shifted, and it wants its brand to reflect those changes.
    • It wants to stress the growing professionalism surrounding the marijuana industry.
    “The industry is changing and sort of going from possibly something that’s sort of way recreational and goofy to something that’s a little more serious and medicinal,” Winchester said.

    Rebranding and going public

    An IPO was the impetus behind the renaming of Denver cannabis technology company MJ Freeway to Akerna, which trades on the Nasdaq as KERN.

    The name change occurred when MJ Freeway merged with MTech, a special purpose acquisition firm, according to MJ Freeway’s vice president of global marketing and communications, Jeanette Ward Horton.

    The new name was built around “kern,” which she said represents an organic kernel of corn or a kernel of data.

    The rebranding process led the team to a better understanding of what the company offers to the market, Horton added.

    “We really wanted for the public listing a name that was not so quickly tied to cannabis but would make a more balanced connection between cannabis and tracking systems,” she said, referring to seed-to-sale tracking software.

    “It’s really a reflection of the maturation of the space. There is a lot of movement from private companies to public companies and people being acquired by larger companies.”

    High Street become Acreage

    In March 2018, High Street Capital Partners became Acreage Holdings as part of its plan to pursue an IPO.

    Acreage Holdings trades on the Canadian Securities Exchange (CSE) as ACRG.U and on the over-the-counter exchanges as ACRGF.

    Kevin Murphy, the company’s founder, chair and CEO, came from the financial industry and started the company in 2011 as an investment vehicle.

    Several years later, he turned his focus to cannabis and invited other investors to participate.

    “High Street Capital Partners was a brand for the investment community specifically,” said Howard Schacter, vice president of communications at Acreage Holdings. “Acreage had real resonance in a couple of different places.

    “It’s an illustration of the part of the business that’s about growing, and growing is what we looked to do and continue to do as a company. It’s a good reflection of growth in all of its different meanings.”

    Creating a national brand

    Industry watchers note that as some companies expand their footprints into new areas by acquiring dispensaries, they’re choosing to change their names and remodel shops to convey a unified message to customers.

    For example, medical marijuana company Vireo Health International, based in Minneapolis, recently launched its first Green Goods-branded dispensary in Scranton, Pennsylvania, and has plans for two more retail stores in Bethlehem and Stroudsburg, pending regulatory approval.

    The name of the umbrella company will remain Vireo, which trades on the CSE as VREO. But going forward, Green Goods will be the retail brand.

    Vireo CEO Kyle Kingsley said there is no additional cost to build out new stores under the Green Goods brand, but rebranding existing stores requires a significant investment that could run into the hundreds of thousands of dollars for larger shops.

    “We’re doing this in a very cost-effective way,” Kingsley said. “It’s a marvelous unifying brand for our dispensaries.”

    The rebranding effort also involves focusing on Vireo’s e-commerce platform.

    Customers can order online to buy products through in-store pickup or delivery, which is Vireo’s largest revenue generator in locations where the service is allowed.

    “We’re looking to make it easy for folks,” Kingsley said. “If they do an online refill, it can be a two-minute interaction. Online orders have increased substantially – more than half of our transactions are e-commerce.”

    Conveying a happy image

    Another example is Chicago-based Cresco Labs (CSE: CL), which owns 31 retail licenses in 11 states and 21 operating dispensaries – all acquired through mergers and acquisitions of other companies.

    Cresco is rebranding all the dispensaries it’s acquired as Sunnyside, a name that’s intended to convey happiness.

    But the process isn’t simple.

    “When you want to change the name of a dispensary, it’s not as easy as other businesses,” said Jason Erkes, chief communications officer for Cresco Labs.

    “You’re dealing with the government and regulators and a lot of firsts. It’s very burdensome.”
    Madri-Gal and macbill like this.
  9. FlyingLow

    FlyingLow Team NO SLEEP!

    There are no pot stocks that get me remotely interested anymore.

    I am an investor by trade and have never suffered the losses I've seen in cannabis. It is simply ridiculous.
  10. macbill

    macbill Gregarious Misanthrope

    The Evergreen State
    Maybe now is the time to pick something up.
  11. OldNewbie

    OldNewbie Well-Known Member

    Some are going to make money, especially if they go by @macbill's thoughts about buying low. But, there is no way *I* have the expertise to know which are which. If you're going to invest, rather than gamble, you're going to have to get some of the premium news services out there that gives you the skinny on the people in the industry and what is going on. It will still be mercurial, its just that you might be able to catch a rocket that beats the competition for some reason. (Most likely, serious and competent people who work hard at the top of the organization will be key. There's money here. The issue is how to get it when you're selling (essentially) the same thing everyone else is.)

    At the end of the day, it is an agricultural product. It seems like many business plans require drug dealing profit on flower. Once it became legal, those margins should be considered gone.
    Last edited: Dec 3, 2019 at 11:05 AM
    Madri-Gal, pxl_jockey and macbill like this.

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