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The Great Green North

brain_wash_your_face wrote:

What’s going on with TGOD, hype or reasonable…basically: you selling or holding?

prob a bit of both… im holding as i have shares pre-ipo with a 6mo lockup. Also have warrants to exercise at some point.

realistically they have a fairly ambitious long term plan to develop a massive grow facility in quebec and have signed SAQ (i believe thats it, the liquor store in quebec) on to purchase wholesale from them to sell at locations throughout quebec. They also have an agreement to sell a substantial amount (believe up to 20% of production) to Aurora, who also took a fairly large state in TGOD. I feel there is a fairly decent chance Aurora takes them over at some point to enhance their production capabilities and further vertically integrate the pipeline. they also just announced they were approved to sell THC infused beverages/pen oils & a large beverage production facility they are going to build. its certainly not a home run, this is an early state company & it carries the operational risk as such. that said the management team is experienced in launching cannabis companies and i think they have done a good job so far.

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

Automate your Excel models with the industry's most accurate financial, market and economic data.

All right, I went in on four MJ stocks today. About 5% of my overall portfolio into:

APHQF, GWPH, CBWTF, and TGOD (last one purely because it was mentioned here. Did zero due diligence.)

The first three I actually did research and like. I wasn’t at all aware of CBWTF but since they’re ripping off the business model of one of my favorite companies of all time SLW (or whatever it is now), I bought on spec. GW Pharma for personal reasons as I know the drugs they’re making help fight seizures. And I still don’t even know what TGOD does.

Holding period: 5 years - forever.

Sell strategy: None. If I lose 5% of my overall portfolio…so what?

if TGOD goes to the moon you owe me some BBQ. btw - they are a wholesale producer/grower.

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

How can you guys just buy Canadian stocks like this? Please. Teach. Me. To. Learn.

Message me about the number 1 best wine club in NYC.

I can’t speak on owning individual securities, but I bought a little bit of MJ. A US ETF that holds pot companies.

Welcome to the fold STL. MPX up nicely today, still relatively small if you are looking for exposure to dispensaries (as opposed to growers) outside of the currently legal market. I have a decent amount invested now, but started out pretty small. I may take some gains if they are still there soon. I’m just short on new ideas right now and limited time for research. Time horizon on these, as you say, is long.

#1 industry over the very long term in the US is tobacco, FWIW (it’s not even close). Some similarities here.

@MatthewG, many of these are traded on US exchanges. I own these companies via US exchanges: MEDFF (soon to be acquired), TGIFF, MPXEF.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

CEO10K-DAY wrote:

How can you guys just buy Canadian stocks like this? Please. Teach. Me. To. Learn.

In my two accounts - Schwab and TD - I’ve never had a problem. I’m able to buy and sell them just like any other stock.

is CANOPY GROWTH CORP  the real deal?

"You want a quote? Haven’t I written enough already???"

RIP

$5B is definitely a game changer. changed the attractive entry point to $25-$30, up from say $15-$20. practically guarantees canopy is a global leader in the space 10-20 years out. basically the only one worth owning after the washout as it is the only one without future funding issues.

MLA you are my freaking hero. you convinced me to go all in 3x ETF and take out a line of credit.

i am going all in CGC baby.@@@

"You want a quote? Haven’t I written enough already???"

RIP

key phrase = after the washout. need a valuation correction first. at ~$30 in a year or so, i’d be a happy long-term owner of WEED.

is this big news in canada?

"You want a quote? Haven’t I written enough already???"

RIP

sort of. everyone talks about how stoned they’ll be in 2 months. it is nice to see that canada might actually keep a world leader in something once and for all (though with 50%+ US ownership) unlike past Canadian boom and bust superstars like BlackBerry, Valeant and Nortel. remember that we see boom and bust constantly in our resource sector so its annoying to see our only non-resource companies go big then deflate to almost nothing.

These last three days have been pretty fun. 

Yes, my Aurora (converted from MedReleaf acquisition) shares are up over 100% from cost. I kind of want to blow out of it, but this is in taxable. Decisions.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

Getting a nice run on MPX the last few days. Earnings (yes those sometimes exist in pot stocks) yesterday driving it now.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

interesting. they are making money now? is that in canada? how do they make money? quick summary plz. many tanks

I love my cheese. I got to have my cheddar.

can you guys just post quick 1 paragraph summaries. waht they do, margins, valuation, location.

I love my cheese. I got to have my cheddar.

Matt Likes Analysis wrote:

key phrase = after the washout. need a valuation correction first. at ~$30 in a year or so, i’d be a happy long-term owner of WEED.

What washout? You think they are going to drop back down to $30? Why?

brain_wash_your_face wrote:

Getting a nice run on MPX the last few days. Earnings (yes those sometimes exist in pot stocks) yesterday driving it now.

What does MPX do? They have dispensaries and they are planning to get into production? Price is currently 1.01 CAD. Still a buy?

TGOD up 24% today. 

I like money.

hei.so wrote:

Matt Likes Analysis wrote:

key phrase = after the washout. need a valuation correction first. at ~$30 in a year or so, i’d be a happy long-term owner of WEED.

What washout? You think they are going to drop back down to $30? Why?

brain_wash_your_face wrote:

Getting a nice run on MPX the last few days. Earnings (yes those sometimes exist in pot stocks) yesterday driving it now.

What does MPX do? They have dispensaries and they are planning to get into production? Price is currently 1.01 CAD. Still a buy?

because it currently has a fully diluted market cap of ~CAD$28.8 billion (~CAD$19.3B net of cash) while servicing a market that is ultimately worth ~CAD$4 billion if they’re lucky. most of the market will be servicing the low end which is barely profitable and is not what WEED does. assuming they capture a quarter of the medical and high quality rec market (despite facing competition from hundreds of other players), they top out at revenues of CAD$1 billion.

while i personally think the war chest is a huge advantage and will allow them to enter JVs in places outside of Canada, those JVs will not come cheap and will face plenty of competition from PE firms and other weed companies.

the publicly listed companies in canada have more than 4x the production capacity of the highest estimate of the entire canadian cannabis market in 2020. basically all publicly traded weed companies produced high cost medical and high quality pot. the vast majority of the market will remain in the low cost, low quality part of the market currently serviced by the black market and the future legal outdoor growth market (which is not what the publicly listed guys do).

it was a gold rush and most will go bankrupt in the next year when investors realize most companies do not have retailers to sell their product or their products aren’t attractive and even the survivors are worth a fraction of what they traded for at peak.

obviously it is possible that WEED soaks up 50%+ of the market but i see this as unlikely. basically all i’m saying is that if you own a basket of weed companies today, you’ll likely be crying in a year or so. i could be wrong but valuations tend to matter at some point. it is also concerning when all of the stupidest people i know who just got murdered in the blockchain market are now shifting their net worths into weed stocks at a time when weed stocks are already up 30x in a few years.

^This.  I’ve looked at the cannabis stocks for a bit, but valuations keep me on the sidelines.  There have been a few interesting private opportunities come my way, but few with real potential scale (exception was Acreage Holdings).  Scale and a foothold in several states are key in my opinion.  If you’re 100% in Oregon for example, you’ve gotten crushed by the drop in street spot rates.  Commodification is a real concern to me.  Spot rates were $2K/lb a couple of years ago and are now something like $1.5K or maybe less.  I don’t see anywhere for prices to go than down.  Few really seem to bake that into their pro formas…

To MLA’s point, I see a lot of the same over excitement in this industry as was in the crypto space.  I’d love to get an allocation to MJ, but I’m not going to overpay.

Sweep the Leg wrote:

TGOD up 24% today. 

I like money.

ridiculous moves in the stock lately - think you got in pretty high didnt you whats you cost basis? CEO sits down with jim cramer friday so that should interest some reddit types to buy but we shall see. at least they are finally going to start selling & generating cash

also completely disagree with MLAs point about the market wanting low cost/low quality - seeing as how the markets that are legal in the US are flush with high quality/cost product and there is little reason to see it differing in canada. we’ll see how it shakes out as there is quite a bit of excess production but id imagine there will be quite a bit of consolidation.

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

the reason high quality stuff is flourishing in these early years is because everyone wants to dominate that part of the market for the margins and for the pivot to pharma. eventually the oversupply culls the suppliers naturally but part of the culling is due to consumers and producers moving downstream. the oversupply in canada is extreme and we’re looking at players possibly going under before 2019 begins as many companies are relying on consumers consuming their particular product in a sea of products that are almost unmarketable (due to regulations).

the real question is why are you assuming weed is different than alcohol, opiates or any drug? the masses go for the lower cost option if it is as good as the higher cost option. they also go for the one that is marketed to them more effectively (i.e. value for money) and is familiar/available. this is why budweiser is #1 and not hofbrau. this is also why there is a large market for cheap “beer” - buck a beer brands in ontario and malt liquor. this is also why generics beat non-generics over time.

if you can grow the exact same strain outdoors rather than indoors, you save $1.80 a gram. that’s like 30% in additional margin for the producers. the producers would be idiots to not pursue outdoor production for the rec market but none of them are doing it. when other players start to do it, they will be forced to.

arguably, the sole reason why the black market still flourishes in colorado and other places is because the low end hasn’t been tapped yet. once tapped, the low end will creep into the higher end. this is particularly true when consumers are more familiar with the product rather than just buying whatever the bro on the street corner may be holding today.

Yayyywork wrote:

Sweep the Leg wrote:

TGOD up 24% today. 

I like money.

ridiculous moves in the stock lately - think you got in pretty high didnt you whats you cost basis? CEO sits down with jim cramer friday so that should interest some reddit types to buy but we shall see. at least they are finally going to start selling & generating cash

also completely disagree with MLAs point about the market wanting low cost/low quality - seeing as how the markets that are legal in the US are flush with high quality/cost product and there is little reason to see it differing in canada. we’ll see how it shakes out as there is quite a bit of excess production but id imagine there will be quite a bit of consolidation.

Yeah, it was a rough first month. As of yesterday, though, I was up 16% across the four stocks I bought. 

As of market close today, I’m up 8.15%. Yep, it’s going to be a wild ride.

Matt Likes Analysis wrote:

the real question is why are you assuming weed is different than alcohol, opiates or any drug? the masses go for the lower cost option if it is as good as the higher cost option.

I completely disagree with that statement. Take wine or spirits. In blind taste tests no one can tell the difference but people assume higher priced alcohol tastes better. Same with weed.

A point I haven’t seen anyone make is the difference between the quality of weed you need to smoke vs eat. People that smoke it want to see the sticky-icky. But you can use ditch weed and still make high-quality edibles. That’s where the low quality play is.

Bottom line, there’s going to be a big market for both high and low quality ganja.

I generally agree with the sentiment that pot growing stocks are pretty overvalued for reasons explained above, you’re discounting the alternative opportunities in the space.

Weed will eventually become a commodity and growing companies don’t deserve high multiples. However, there’s a lot of possibilities in the medicine, financing, dispensaries, packaging, edibles, etc.

 

Sweep the Leg wrote:

I completely disagree with that statement. Take wine or spirits. In blind taste tests no one can tell the difference but people assume higher priced alcohol tastes better. Same with weed.

A point I haven’t seen anyone make is the difference between the quality of weed you need to smoke vs eat. People that smoke it want to see the sticky-icky. But you can use ditch weed and still make high-quality edibles. That’s where the low quality play is.

Bottom line, there’s going to be a big market for both high and low quality ganja.

greater than half the market in legalized US markets is non-flower so by your reasoning greater than half the market is for low quality and this doesn’t include those who are willing to smoke low quality.

i’m not sure how you disagree with the statement that people prefer low cost, crap quality booze. the top selling beer brands in Canada are: Coors Light, Molson Canadian, Budweiser, Bud Light, Labatt Blue, Carling, Busch, Keiths, Heineken and Corona. all of them (except Heine) sell for about $1.50 a bottle versus the absolute lowest cost product at $1.25 and higher end stuff at $2.00-$2.50. Moosehead, Sleeman, La Fin Du Monde and Kokanee are all widely available and better tasting Canadian beers but are not on the list. main deterrent is cost. when people can’t differentiate easily between product, they contemplate cost and (maybe unknowingly) consider marketing.

when it all shakes out, high quality will be a small part of the market. maybe there is room for a larger craft market in weed than booze given when and where you smoke it but economics and human nature will be the key factors. you have to remember that legal weed isn’t going to be cheap and the average joe isn’t going to be able to pay up for the good $hit very often. just like booze.

when you say non-flower do you mean mids type crap weed or are you talking oils, edibles etc? because those a hugely different animals

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

^^I was talking more about wine and spirits, not so much beer. If a parallel has to be made, I’d say weed is most like wine. Yes, there’s obviously a bigger market for two-buck chuck and boxed wine (which is actually pretty ok), but the high-end wine market is also huge. 

Honestly, I’m not sure we’re really even disagreeing with each other. My main point was there’s going to be a market for all types of weed.