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written by reader 420 Investors

By SoGiAm, March 25, 2016

This tread is created for serious cannabis investors to share K.A.S.H. by providing ideas, diligence, links, equities, etc. with like-minded individuals.

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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4lllls
Guest
4lllls
September 24, 2018 12:14 am
Reply to  SoGiAm

His f word s constantly dont seem professional. I didnt watch the whole thing because my mind and body were cringing through each f word. No reason for this but thank you for the link.

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SillyRabbit
September 24, 2018 10:47 am
Reply to  SoGiAm

Trying to watch the entire hour and half of the video. Got it on pause for right to wash out my ears..lol… will come back to it shortly. I would like to learn his strategy as well, but its difficult to follow, at least for now, because he is trading at the same time.

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roberthebel
roberthebel
September 28, 2018 10:46 pm
Reply to  SoGiAm

Sort of missed the igc boat already

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TomN
TomN
September 25, 2018 3:22 pm
Reply to  SillyRabbit

$NXTTF (long). .Dang! I’m not sure if that makes me want to sell or buy more. 🙂 Rebels..

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SillyRabbit
September 26, 2018 2:50 pm

People are buying up TRUL thinking its trulieve IPO, #TRUL opened at $0.35 and went up to $2.50 before coming back down.

Guys, TRUL is not the symbol for Trulieve IPO.

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Travis Johnson, Stock Gumshoe
September 26, 2018 3:07 pm
Reply to  SillyRabbit

Trulieve went public on the little off-the-beaten-path CSE, not the Toronto or NY exchanges — they do have the ticker TRUL on the CSE (often noted TRUL.CN), but many brokers don’t give trading access to that exchange. Info here: https://thecse.com/en/listings/life-sciences/trulieve-cannabis-corp-subordinate-voting-shares

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SillyRabbit
September 28, 2018 6:03 pm

An excellent DD on #Planet13 #PLNHF, Source is from Reddit.

https://www.reddit.com/r/wallstreetbets/comments/9jdyqe/planet_13_holdings_dd_inside/

There are some comments from visitors and residents of Las Vegas that offers a good insight of the local cannabis market as well as the area of the new complex.

=============================================================

Quick summary:

Marijuana dispensary business based in Las Vegas, Nevada

Currently selling ~US$4.0 M/quarter from one small dispensary far away from the strip, ranking Planet 13 as the tenth highest by revenue of all publicly traded weed stocks

Opening a 16,000 sqft cannabis Superstore on November 1, 2018, a 5 min drive or 15-20 min walk from the Wynn Hotel and right beside the Fashion Show Mall.

The stock is very undervalued relative to peers even with the sales of the existing dispensary alone; the Superstore is just massive upside.

// I did not copy over the urls.
Some background reading:

Beacon Securities initiating report (PDF, Imgur); this is the most important read

Most recent earnings release

Most recent financials (statements, MD&A)

Vice News article about the company

Recent interview with one of the founders (really interesting read)

My take: the stock has run up a ton over the past month but it’s still massively undervalued relative to peers with a market cap of US$200 M. Below is a summary analysis, most of which comes from the Beacon report but I changed some assumptions a bit.

Nevada reported a few weeks ago that sales of recreational cannabis in its first year (July 1, 2017 – June 30, 2018) exceeded state expectations by 60%. Total sales, including medical and ancillaries, totaled US$530 M with recreational cannabis alone at US$425 M. Tax revenue from cannabis was $70 M. Interestingly, Nevada’s levy on alcohol generated $49 M last year, meaning that in Year 1, cannabis is already a larger contributor to the state’s revenue than alcohol.

These numbers are incredibly strong for Year 1 of legal recreational sales. To put them in perspective, in their respective first year of legal adult use sales: Colorado – $303 M or $54 per capita; Washington – $259 M or $37 per capita; Oregon – $241 M or $59 per capita; California – $1.25 billion (Q2 annualized as its first year is 2018) or $30 per capita. Nevada at $530 M and with a population of 3.0 M equates to $177 per capita or over 3.0x that of Colorado, obviously because of the massive amount of tourist traffic in the state. There are currently many restrictions on where one can consume cannabis in Las Vegas. This may change this November with passage of a law that could allow for on-site consumption that will likely be sponsored by incoming county commissioner Tick Segerblom. Planet 13 is ready for this as well and has plenty or space in its 112,000 SF facility to house a consumption lounge.

Planet 13’s existing dispensary, Medizin, has a ~$20 M run rate, 20% EBITDA margin, $70 current basket size (ie. costs per customer of $55 with EBITDA per customer of $15). While its sales license will be transferred to the superstore for Nov 1, Planet 13 has applied for a new one this week and will likely hear back in November. If successful, assume Medizin contributes $4-$5 M/year of EBITDA in 2019 from the local market seven miles from the Strip.

Planet 13’s Superstore opens on November 1 and caters to tourists, being 5,000 feet from the Wynn and the closest cannabis store to the Strip. Assume 20% of Las Vegas’ incoming 55 M/year of tourists would consume cannabis (lower than national average and likely very conservative given why tourists go to the city in the first place) would imply 11 M/year customers. Assume the superstore obtains 10% market share (again likely conservative, given location) that would be 1.1 M/year of customers or 3,000/day. Assume a 40% increase in avg basket size to Medizin (customers are now mostly tourists on the Strip) implies a basket of $100. Assume similar costs to Medizin, but also increased overhead ($55 + $10 = $65) would leave EBITDA of $35 per customer or 35%. Given revenue of $110 M/year (3,000 customers per day @ $100/customer), 35% margin gives you EBITDA of $38 M/year for the Superstore.

If public consumption is legalized as expected, assume Planet gets a license for a consumption lounge and it takes 6 months to construct, becoming operational in Q4 2019. They would likely charge a cover charge, as is standard in Las Vegas, in addition to selling cannabis on site, so let’s put a placeholder of $7 M/year of EBITDA for a potential consumption lounge.

To sum up, all the above gets you to 2019 EBITDA of US$50 M/year. Given the attractiveness of Nevada as a market, Planet 13’s position therein, and the revenue/EBITDA numbers the company should start to produce, let’s assume it trades at 20x EBITDA (still a massive discount to all of the Canadian operators). That implies a valuation of US$1.0 billion; with 117 M shares outstanding, that’s US$8.50 per share (4.25x current share price of US$2.00).

Any thoughts?

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steveflick
September 28, 2018 6:30 pm
Reply to  SillyRabbit

Glad you found a great DD. I’ll look into it.

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SillyRabbit
November 3, 2018 3:38 pm

On site. Planet 13 Las Vegas Dispensary Entertainment Complex. PLNHF

https://www.youtube.com/watch?v=VMcmw2EAt74&feature=youtu.be

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steveflick
November 9, 2018 12:22 pm
Reply to  SillyRabbit

Watched the YouTube – very high class dispensary. Thanks for sharing.

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steveflick
November 9, 2018 12:50 pm
Reply to  SoGiAm

Great Post, Thanks. Trying to figure out symbol for Curaleaf out of Wakefield MA; believe it is CSE: CURA, or is it OTC: LDVTF as mentioned in this article https://www.fidelity.com/news/article/company-news/201811081646RTRSNEWSCOMBINED_L2N1XJ1PA_1 which talks about HARVEST out of Tempe AZ going public perhaps as early as next week.
Still waiting for Acreage Holdings to go public, anticipated this month.
Happy Investing

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tanglewood
November 9, 2018 7:41 pm
Reply to  steveflick

https://finance.yahoo.com/quote/LDVTF?p=LDVTF&.tsrc=fin-srch in the pink sheets
https://finance.yahoo.com/quote/CURA.CN?p=CURA.CN&.tsrc=fin-srch
on the Canadian
Clicking on the profile does not say where the co is located

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Andrew
Member
Andrew
January 14, 2019 2:41 pm
Reply to  steveflick

Steveflick, wondering if you have any knowledge of upcoming IPOs that could be profitable? I need to make up some losses over the last year. Thank you!

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steveflick
November 16, 2018 3:10 pm

Acreage Holdings, New York, had IPO Nov 16 on CSE Canadian Securities Exchange symbol ACRG.U; the U stands for listed and traded in US Dollars (not Canadian). Today I bought some at broker Fidelity symbol ACRZF, and had to pay $50. fee directing through an international broker.

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steveflick
January 4, 2019 10:31 pm
Reply to  steveflick

Acreage Holdings new symbol is ACRGF

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hittman
Member
hittman
January 10, 2019 5:14 pm

Hey guys I’m New to investing and VERY new to weed investing. Because of that I DID pay the $39 to join NIC investors. To date they have me in Charlotte’s Web, Emerald Health, Kushco, Hexxo, Origin House, and MPX bioceuticals. I added MedMen on my own although I’m really not sure I should’ve. I’ve only bought $150 worth of these stocks, divided equally so some I have 5 shares one I have 10 shares and one I have 30 shares (MPX) due to the cost. That being said, how much more money would I need to invest to bring my total portfolio value up to the point where I would actually make some real money? I just don’t have the money all at once to plop down say 1k-5k on this stuff so I have to wait until I have enough to make it worth the $6.95 fee that is charged. I tried Robinhood because there are no fees but they don’t offer any weed stocks that have a low buy in. Soooo I’m kinda rethinking this whole weed investment thing because I’m starting to believe that you really CAN’T turn $50 or even $200 into a fortune. So I’m basically looking for some feedback at this time. By the way would it be worth it for me to buy Canopy at around $36 because I could only buy like 3 shares?

Thanks
Scott

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steveflick
January 14, 2019 2:20 pm
Reply to  hittman

Hi Hittman, Cannabis investing is very speculative, invest only what you can afford to lose…… I have read aprox. 15% of your total portfolio. Since April 2018 I have invested in 14 cannabis, or industry related, companies, and am now collectively up +15%, being down about 10% in December. As part of your due diligence, I suggest 3 weekly (free) enewsletters.
1. Let’s Toke Business Newsletter by Ted Ohashi. Send an email to Ted tedohashi@gmail.com and ask to be added to his newsletter and what country you are from.
2. http://www.newcannabisventures.com by Alan Brochstein
3. http://www.greenmarketreport.com

I say yes to CGC Canopy, Ted O’Hashi’s #1 recommendation. Also, seriously consider IIPR, an REIT that pays dividends, one of the few cannabis companies that pay dividends.

Happy Investing

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hittman
Member
hittman
January 14, 2019 1:09 pm

Hi everyone. Quick question. Is anyone into Wayland Group MRRCF or Auxly Cannabis CBWTF?

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hittman
Member
hittman
January 14, 2019 1:29 pm

Hi everyone. Quick question. Is anyone else into Auxly Cannabis CBWTF or Wayland Group MRRCF?

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TomN
TomN
January 14, 2019 1:40 pm
Reply to  hittman

$MRRCF – Hi Hittman.. I’m in Wayland.. aka Maricann. Purchased last Feb and have been riding the wave downward since. Looks like a slight uptick lately (as with everything else). Not in for that many shares so just patiently waiting.

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steveflick
January 14, 2019 2:24 pm
Reply to  hittman

CBWTF Auxly Cannabis, Stock Gumshoe has written about several times; simply use the Search field on SG to learn more.

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hittman
Member
hittman
January 14, 2019 2:08 pm

Hi everyone. Has anyone gotten into Wayland Group MRRCF or Auxly Cannabis CBWTF ?

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Andrew
Member
Andrew
January 14, 2019 2:52 pm
Reply to  hittman

I’m in auxly at roughy 20,000 shares at an average buy-in around 1.07. I was told this is going to be a hold because of it’s streaming model, which may take some time to generate significant revenues. I’m not sure. When I bought it from last spring through the fall (I continued to buy to lower my buy-in price), but am down roughly 35 cents/share.
I think it may have long term potential, but who knows. Do your own due diligence as usual and read up on what the master (Travis) has written on the company. I find the comments in response to his articles to be particularly interesting.

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hittman
Member
hittman
January 19, 2019 10:44 pm

Hello all. Question. Has anyone ever heard of Sproutly SRUTF? They acquired a biosciences company which has developed technology to make cannabis water soluble for the purpose of infusion into drinks.

Scott

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hittman
Member
hittman
January 19, 2019 10:50 pm

Hello all. Question. Has anyone ever heard of a company called Sproutly SRUTF? They acquired a bioscience company which has the technology to make cannabis water soluble, making it perfect for infusion into drinks.

Scott

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hittman
Member
hittman
January 21, 2019 11:01 am

Hello all. Has anyone ever heard of a Company named Sproutly SRUTF? They acquired a bioscience company that has technology to make cannabis water soluble.

Scott

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hittman
Member
hittman
January 21, 2019 12:06 pm

Does anyone know what Casey Research is pitching for February 4th regarding gambling?

Scott

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Travis Johnson, Stock Gumshoe
January 21, 2019 1:03 pm
Reply to  hittman

We covered that “February 4 will be the best day ever” pitch here.

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hittman
Member
hittman
January 21, 2019 3:23 pm

Wow everyone sorry about all of the repeating comments, I didn’t think they were being posted. I’ll hold up now.

Scott

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hittman
Member
hittman
January 23, 2019 12:43 am

Hey y’all. Feeling kinda lost right now because i have been reading so much about cannabis investments that my eyes are crossed. Here is the deal. I went ahead and signed up for NIC investors for the $39 per year for 2 years. I’m definitely not paying the $1900 for the IPO part of it cause if I had that kind of money I would invest it. I have to make every dollar count because I don’t have many of those. I’m trying to work my way up as it is. I do however have a few questions. Don’t worry I’m not going to as for stock recommendations. My first question is are there some simple guides for due diligence that investors follow? You know maybe some simple “rules of thumb” to follow besides buy low and sell high? My next question is are there any places where I can find information on upcoming IPO’s for the cannabis market that would maybe show me the IPO’s that NIC investors’ guru Danny Brody is recommending? My third question is about my HEXO corp shares. I bought them on etrade at the end of December at $3.52 and now the stock is over $5 but my portfolio shows they are worth $0 I guess because there is an IPO tommorrow. How am I going to be able to sell those shares now that the stock is going to be on the NYSE instead? I’m seriously not asking everyone to do my work for me but I just need some help man.

Scott

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Andrew
Member
Andrew
January 23, 2019 10:45 am
Reply to  hittman

I feel lost as well and have the same questions. I put in about $80k from March 2018 – November 2018 and am down about $30 k. I too joined NICI but don’t feel I’m getting much out of it since they won’t tell us about the “incredibly profitable” IPOs. I’m trying to learn on my own but can’t find any resources other than the non stop barrage of newsletters wanting anywhere from $39 to thousands. I’ve been warned away from them and have no $ left anyway. Feeling lost, depressed and burnt.

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sylrog
Member
sylrog
January 23, 2019 7:57 pm
Reply to  Andrew

I’m with you there. New investor trying to understand the stock market and how to do the DD, since I have absolutely no business background. Should I just buy the stock market for dummies book and start there? I’m also wanting to invest in post stocks. Gotta start somewhere and at least I sort of understand the business, a lot better anyhow than tech, biotech or energy companies ( or any other for that matter). What’s a poor gal to do to get going? I think I’ve been spending 3/4 of every day lately reading all the emails my inbox is inundated with. And spending a whole morning yesterday watching the videos from the weeklong building wealth summit (or something like that), which I realized soon were just all different strategies for making money in stocks. How do you pick the right one or do you just plunge ahead on your own? I’m so confus-ed! But you’ve all probably heard that a thousand times before, right?

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Andrew
Member
Andrew
January 24, 2019 4:45 am
Reply to  sylrog

What really bums me out, is that, I too spend so much of my day trying to get tips on twitter and slogging through the non stop newsletters. We need real resources that begin with the basics. I was supposedly being helped by someone who had years of experience in MJ investing. Once October 18th came around and my account was just barely $5 or $10k positive, after a good 8 months of active investing and a year trying to learn the MJ market, my acquaintance who had been doing MJ stocks for years and made out extremely well, all of a sudden went dark. I asked if I should sell and he said “are you crazy…right at Canada’s legalization and before the midterms…?” The thing is, I think THEY (his group) all did sell then – cashed out. They were really big and didn’t care about the fact that now I’m screwed and have no $. I believed him until he cut communication right then. Now I’m screwed.
I’m not uneducated, I have 2 Bachelors degrees and a Masters, and I know that I can learn this stuff, but I need resource recommendations. I’m just under-educated in trading and I have a real interest and passion for it. Any tips – much appreciated
Thx, AK

hittman
Member
hittman
January 24, 2019 2:46 pm
Reply to  Andrew

One thing I also did was to google the Alternative Harvest ETF and check their listing of which stocks they are carrying. Unlike me you are into this pretty deep but just hang in there man because I do think great strides will be made when the U.S. legalizes.

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hittman
Member
hittman
January 24, 2019 11:44 am
Reply to  Andrew

Andrew I feel ur pain man. I don’t even click on the “here’s 3 cannabis stocks that will make you rich, for FREE” crap anymore. Rather I try to use this site like everyone else to find out what they are. It probably won’t do any good but I’m going to email NIC and ask them if they would consider providing at least one IPO every month to the “little guys” who can’t afford their ridiculous IPOinsider fee of $1900. NIC has advertised themselves as a way for the people who can’t plop down 2 grand at a time on a trade and don’t know a lot to begin with to have an opportunity to take advantage of the cannabis market the way that the seasoned investors who seem to have unlimited funds do. My opinion is share the knowledge so that others have a chance too. NIC is supposed to be the ones to level the playing field so I hope that actually happens. I’m only a month into this because I didn’t realize the potential of this market back when it started but from everything I’ve read, we are still on the ground floor. I have to find a way to build up because buying 5 shares of this and 10 shares of that is not going to get me ahead. I feel the same way as you, I’m more than willing to do the work and I really thought NIC was going to show me the nuts and bolts of what I needed to know to be successful but I haven’t seen that yet. I’d be willing to listen to anything anyone has to say that would be helpful. My email is a.hitt@hotmail.com if anyone feels like paying anything forward because I’ll do the same.

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hd123sftail
January 23, 2019 10:29 am

Does anyone know what company they’re calling the “McDonalds of Cannabis”?

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