Cannabis Investing Network

Despite SAFE Banking Disappointment we discuss why there are some green shoots in cannabis investing worth paying attention to

Are you ready to get hurt again?

In this episode we discuss SAFE Banking, a confusing macro environment, recession fears and industry trends

In our first episode of the new year we explore the brutal price breakdown in December and ask ourselves - how did we get here? What went wrong? What can we learn and do differently? We also share thoughts about investing and opportunities for 2023

Happy 2023!

In this episode we are discussing all things political & SAFE Banking

- Election Results and what this means for Cannabis

- SAFE Banking in Lame Duck

- Broader Market predictions for 2023

- Strategies around SAFE and risk management

In this episode we dig deep into the fundamentals and narrative surrounding the industry, analyzing the past and making some somber predictions for the future.

We break our discussion into several parts:

1. History - how we got here and what we learned

2. The Transitional Phase we are currently in

3. Looking Forward - how we see the industry progressing from here

We look at cannabis fundamentals in relation to capital availability, macro conditions and supply side considerations.

In this episode the boys are back to discuss the macro picture, interest rates, inflation and the importance of recalibrating expectations. We discuss strategy, outlook and why we think cannabis is actually looking pretty good in comparison to other parts of the market.

In this episode we are joined by Frank Perullo of Ascend Wellness. Frank is a Co-Founder of AWH and currently serves as President and Chief Strategy Officer.

We Discuss:

- Frank’s Background in Regulatory Affairs

- Early Days of being a Cannabis Consultant in MA

- Working with GTI, Tilt, Ianthus, Acreage along with mom & pop operators

- Why is it so Difficult to Open a Dispensary in MA?

- Genesis: Meeting Abner and Creating Ascend

- Moving Fast: Why Ascend was able to win the Friend St Store in Boston

- IL: Buying a Distressed Cultivation Asset

- Deciding to Double Stack to be ready for Adult Use

- NJ: Doing a Deal after Everyone Had Looked at it

- Ground Game: Finding Great Retail Locations by Knocking on Doors

- How’s the New Jersey Market?

- Changing Canopy Sizing based on Projected Supply

- Entering PA via acquiring a CR license

- Second Mover Advantage

- Customers: Value vs Premium and Inflation Pressures

- Why Should Investors choose Ascend?

Thanks to Frank for joining us for this very fun and informative interview

In this episode we discuss the complexities of investing across any asset class right now.

From commercial real estate to cannabis, investors are facing tough questions about the future, especially in the context of inflation and rising interest rates.

As delve into some of the uncertainties and examine reasons why Q4 and Q1 were so tough for operators.

We're back! After a long road trip we share our thoughts, takeaways and changes in strategy after a very productive Benzinga.

What did we see? What did we learn? What are the best investment opportunities right now?

In this week's episode we discuss Burn Out. As sentiment continues to be depressed and the macro environment looks ugly it is easy to feel down and out on cannabis. In this episode we discuss ideas and strategies for handling and avoiding burn out.

In this weeks episode we do a market update on:

- the MORE act passing the house (again)

- Mainstream recognition and momentum building

- CAOA and SAFE possibilities

- New Mexico starting legal sales with a bang

- Listener Question re: Schwazze 

- Cresco x Columbia Care Merger thoughts

We also discuss how the macro effects of inflation, supply chain issues and accelerating rate hikes might break the economy. We talk through how cannabis might behave in a recession and why it may not be all bad for the industry.

In this episode we discuss 3 categories of upcoming catalysts which could help propel the cannabis sector out of its current slump

We break out these potential catalysts into state level changes, federal changes and potential M&A.

We also discuss which changes will have a long term impact and which could be have short lived benefit. 

As markets continue to give everyone heart burn we try to take a sober look at:

1) Emotions - how it feels to live through volatility

2) Risks to Limited License Operators - some negatives we are seeing

3) Fundamentals - why the thesis still makes sense, but how we are underwriting more conservatively

In this episode, we are joined by Hirsh Jain of Ananda Strategy.

Hirsh does a deep dive on the Arizona market, which implemented its adult use program in a record 2.5 months after legalizing cannabis through a state ballot initiative in November 2020, generating more than $1.35 billion in sales in its first year. Hirsh walks through some of the reasons Arizona's program has had success, including its licensing structure, favorable tax climate and a high level of cooperation between state regulators and the industry.

We also discuss what other states may be in a position to learn from Arizona's example, and implement successful adult use programs in the near future.

It's been only 2 weeks since our last market update and we have seen a very rough market shakeout.

As we face down a volatile equity market we find ourselves asking fundamental questions about investing: Why is the market behaving so wildly? Where should we invest? What sectors will do well? How will cannabis weather the storm?

We talk about key macro considerations like inflation and interest rates and discuss wheher they should factor into our investing decisions. We talk through our reasoning on why investors should still be interested in equities and why cannabis equities in particular are attractive. However, the increased volatility we are seeing means we may want to change strategies, allocations and cash balances going forward.

In this episode of our executive series we are joined by Greg Butler of Cresco Labs. Greg is Cresco's Chief Commercial Officer and has a wide ranging background including pharma, private equity and alcohol. 

In this interview we discuss:

- Greg's Origins: How he got started in cannabis and why he chose Cresco Labs

- Alcohol vs Cannabis: how the industries are different and how they are similar

- Competitive Threat: How Big Beer is tracking the cannabis industry

- Industry Evolution: how cannabis is changing as it gets more competitive

- Building a Cannabis Brand: what it means, what matters and what's changing

- Financials: What will drive growth ahead for Cresco

- Being the "Partner of Choice": How Cresco is positioning itself for the future of the industry

- Investment and Acquisitions: What big CPG will look for when it comes time to partner with an MSO

Thank you to Greg for joining us for this interview!

Welcome to 2022! As we ring in the new year we look forward and shares some of our predictions of what is to come this year.

We discuss upcoming catalysts to get excited about, headwinds to be cautious about and discuss potential wild cards that could upend the market.

If 2021 taught us anything it was that "Nobody Knows" and "Expect Volatility Ahead".

PS - as we start a new year we are looking to hear your suggestions for what topics you'd like to hear about! Please email us your thoughts

Recapping the rollercoaster of the year that was 2021. Cannabis investors were hoping 2021 would be “The Chosen Year” with potential for significant federal change in the US. Instead we got whiplash and a lesson in humility.

In this episode we rewind to the start of the year and discuss how key events played out. The end of the year is a great time to do some sober reflection on what we got right, what we got wrong and what lessons we can take to (hopefully) improve our game in the future.

Some Key Topics:

- Nobody Knows: the importance of humility and staying nimble

- Everyone is Retail: how price action drives investor mentality

- The Quiet Role of Short Sellers and their impact on cannabis

- Increased Competition across key markets

- SAFE Banking and betting on federal change

We also discuss how the industry has evolved in 2021 and how we are thinking about our investments heading into next year.

Thank you to everyone for listening and sending in great questions! We will see you all in 2022

What a difference 2 weeks makes!

In this episode we discuss a few key themes around the biggest issues we are seeing in today's market

1) Narratives vs Reality - how the divergence creates opportunity for investors

2) Nancy Mace Legalization bill - what this really means and the effect its having on the market

3) $MSOS huge cash inflows and how we expect this to impact the cannabis stock market short term

4) Strategy - ideas on position your portfolio to play the ups and downs of cannabis volatility

In this episode (which was recorded on Fri Nov 5th) we discuss the rapid sentiment shift from "Depression" to "Euphoria" and why it is an excellent real-time example of the inefficiency of the cannabis investing market.

We often discuss how our market behaves irrationally but in this episode we delve into the reasons why it is that way, examples of irrational behaviour and strategies to take advantage of these swings.

In this episode we talk about how we can "sharpen our swords" and focus on improving our investing abilities. We talk about mistakes we've made (and re-made), what we've learned and some of the easiest ways to work on your cannabis IQ, investing knowledge and research capabilities in order to (hopefully) reach better outcomes.

In this end of August market update we discuss negative market chatter we are hearing. We try to answer - "How long can this go on? And how bad can it get?" 

The simple answer is that we don't know - but we think through some of the bear cases for our sector. We also discuss how to win as an investor in a down market. The theme of the episode is that investors are spoiled for choice right now but need a strong stomach and a longer time horizon to take advantage of it.

In this update we cover several earnings update, thoughts on MMEN/Tilray and general ideas about the state of the market.

In this episode we discuss why we believe the market has swung back to "Golden Opportunity" territory and the dynamics behind the shift.

In particular we dig into Trulieve and Verano and explain why we think these two names are have fallen to very attractive multiples based on 2022 EBITDA.

In this episode we are once again joined with a special guest, Chris Murray.  Chris and Abi discuss a wide array of topics that affect the social stigma in cannabis along with potential factors which are affecting other sectors and could spill over to cannabis.

First we briefly touch on Sha'carri Richardson's recent disqualification in the upcoming Tokyo Olympics after testing positive for THC.

Followed by a look into ESG, Environmental, Social and Governance, which refers to the three key factors when measuring the sustainability and ethical impact of a company.  ESG is affecting many other industries including meat, agriculture, metals refining, crypto mining and others.  We discuss if this is something cannabis investors should be concerned about.

Lastly, we look back on Tilray and discuss how a restricted cap combined with retail demand on a large US exchange created a perfect storm for the price to shoot to the moon.

As always, we hope you enjoyed this episode.

In this episode we discuss last week's Jefferies ~300 page research report on the US Cannabis industry. The investment bank covers many MSOs, US markets and projects out sales to 2030. 

We discuss why we think the headline is true but potentially misleading, try to measure how much upside we see in the next 2-3 years, discuss forward margins and EBITDA multiples and discuss our strategy for earning outsized returns to build our portfolio.

Nostalgia time! In this episode we dive into our experiences over the last 2+ years and discuss how the market has evolved since we started this podcast. While many things have changed, the parallels between market boom and bust, the nature of retail investors and the emotional turmoil of the highs and lows are eerily similar to 2019. We discuss how our past experiences (and mistakes) have hopefully made us better cannabis investors in 2021.

A special thank you to all the listeners who have been with us through the ups and downs; 100 episodes down and we are just getting started!

Correction - Chris mentions Hexo/Truss drinks in the US containing THC. This is an error - these drinks are CBD only.

We are joined by a special guest, Chris Murray.  Chris is a veteran in the cannabis sector.  He was employee number 7 at Canopy Growth, which was the first Canadian LP to go public on the TSX and NASDAQ and was dubbed the first unicorn in the cannabis sector.   Canopy played a pivotal role in shaping today's cannabis sector and today we are joined by Chris who had first hand experience in catching the monumental growth riding the unicorn wave.

In this episode we gain insights on what happened at Canopy.  We take a deeper dive into the importance of company culture and how strategic decisions affect it.  We look at the differences in strategies between a medical focused company vs an adult use cannabis company and why it's important to differentiate between the two types of customers.  As M&A continues to accelerate in the sector, in this episode you'll learn how to view M&A opportunities through a unique qualitative lense.

Companies mentioned: Canopy, Aphria, Aurora, HEXO & Trulieve.

In this episode we dive deep into the state of the cannabis retail market in Florida. Florida has long been one of our favourite markets. Today's guest was on the forefront of the Florida market from a different side of the table. As a real estate developer focused on Florida retail, cannabis operators came onto Randy's radar. He helped these companies rapidly grow their retail footprint over the last few years by being able to source appropriately zoned properties and deal with the variety of issues that complicate the life of dispensaries. But Randy soon realized the payoff for accomplishing these deals could be enormous.

In this episode:

- How Randy stumbled into the industry

- The early days of Florida's medical market

- Doing GTI Florida's first deal

- What the heydey of opening dispensaries was like

- His thoughts on who's doing it well and how good Trulieve really is

- The secrets to success at this stage of the industry

Thanks to Randy for joining for a very fun and informative chat!

Audio Note: There was an echo in this episode we mostly fixed. However the audio may at times be a little odd. Thanks for understanding

In this episode we are joined by the leading cannabis analyst Alan Brochstein. Alan is known for being the sheriff of the wild west of cannabis and applying his deep analytical insights in the cannabis industry. 

He is founder of New Cannabis Ventures and shares his insights as "the maven" of 420investor. Alan regularly helps us form our opinions on the cannabis space and helps investors make better investment decisions. 

He joins us today in a broad ranging discussion about investor psychology, cannabis fundamentals, company specific discussions and much more. Thanks to Alan for joining us as always.

Twitter - https://twitter.com/Invest420
420investor - https://marketfy.com/product/420investor/

In this episode we unpack last week's interview with Boris Jordan and review in-depth some of the interesting points he raised. 

We also do a deeper dive into the Trulieve - Harvest merger and share our thoughts on why it's a true value play and what Kim may be hoping to achieve post-integration.

In this jam-packed episode Boris Jordan joins us in an extremely candid conversation about Curaleaf Holdings. Boris is founder and Executive Chairman of Curaleaf Holdings and is one of the industry's most recognized faces. He is also a prolific cannabis investor having invested over $400M of hard cash into Curaleaf and more into other private cannabis opportunities. 

In this wide ranging discussion Boris shares stories and discussions on many topics including:

- The First Inning of Curaleaf: how it all started and where we are now

- Compliance & Custodying: how the recent compliance forced institutional selling is a repeat of 2019

- Guidance: What is driving the massive Q2 growth Curaleaf is projecting?

- Interstate Commerce: why Boris thinks it is inevitable and how they are planning for it

- Driving Down Costs: Technology that could cut manufacturing cost by 90%

- Being National: Why it's important to be in highly competitive markets like California and Oregon

- Wide & Deep: How the recent Trulieve & Harvest merger validates Curaleaf's early thesis

- Florida: what mistakes were made, how they were fixed and the future

- Cost of Capital: refinancing Curaleaf debt in 2022 at 7-8% without warrants

- Private Investing: How Boris fills the "venture investing" role for Curaleaf

- Being the Biggest: Why it matters

- Margins & Growth: How Curaleaf compares to its competition

- M&A: The importance of Select & Grassroots 

- Mistakes: Learning from past issues

Thank you to Boris Jordan for joining us for this episode!

We are joined with a friend of the podcast, Pat Smith, former sell side analyst on Bay St.  

In this episode we cover a broad range of topics including how investors are switching from simply reading headlines to analyzing fundamentals and why cannabis continues to be a value play.  

We discuss how the broader markets are impacting our sector, as well touch on how crypto, gold, bond yields and the vaccine roll out could affect cannabis.

Note: there is an echo in the audio if you listen using headphones; it goes away if you listen through a speaker. Sorry about that, new audio set up this time!

In this episode we talk about watching your back! Cannabis investing is buyer beware and investors should always be thinking about mitigating their downside risk.

We discuss our personal viewpoints, investment philosophies and trading tactics for minimizing your downside risk in cannabis investing 

Story time! In this episode we get nostalgic and share our experiences of the ups and downs of cannabis investing from 2017-2019. 

In what was truly the boom and bust of speculative cannabis investing we learned some hard lessons which can be instructive for newer investors.

In this episode:

- Starting with a bang in 2017 with Canopy and Aphria

- Investing in a company at 30c and hitting a 20X return...then watching it come back

- How a private California deal went wrong

- Lessons learned through tough experiences 

In this episode we delve deep into the mind of mysterious "retail investor". Since cannabis is a retail dominated market it is important to understand how this impacts volatility and the opportunities it creates.

We cover 3 main topics:

1. Who is Retail? What constitutes Retail vs Institutional?

2. What are the most common mistakes retail investors make?

3. How can we avoid making these mistakes?

In this episode we delve into the importance of digging deep into potential cannabis investments

We discuss:

- Why its important to do due diligence (DD) before investing

- Setting clear goals of what you hope to achieve

- How DD should help your understanding of the business and the operators

- What to look for in potential deals

- Where to look (public and private)

- Resources provided by the company

- The importance of public filings

Following up on last week's volatility cannabis investors are left asking - what now? In this episode we share our core thesis of buying weakness in US cannabis names (selectively and at the right valuations). However, we debate both sides of buying now vs waiting for more pain.

In this market update:

- Where are we now?

- Why rising bond yields matter and what cannabis investors should know

- How stimulus affects the short term

- Catalyst: NY Legalization

- Catalyst: SAFE & Uplisting

- Catalyst: Federal legalization

- How each of these could play out and how they could fail

- Strategies for adding or waiting depending on your portfolio

- Earnings season inbound for US Cannabis

In this episode we talk about how rattling it can feel to see large pullbacks in the broader market leading to wilder swings in the cannabis markets. As we lived through this last week we ask - how do we prepare ourselves mentality for this volatility? 

- What happened last week? Understanding why the 10 year bond rate matters

- Human psychology: why is loss felt more acutely than gain?

- What does loss cause investors to do?

- Dispelling popular investment myths

- Using stop losses vs "diamond handing"

- What no one talks about (openly) in investing

- Simple strategies can be better than complicated ones

As Canadian LPs like Tilray and Canopy enjoy historic runs (along with MSOs) we find ourselves asking - what now? Should we be taking chips off the table or holding strong? In this episode we discuss:

- What we think is causing the parabolic run

- The WallStreetBets / $GME effect coming to the cannabis industry

- Short squeeze in full effect

- Warning signs / red flags

- Unusual trading activity on TLRY, Canopy, Supreme and MMEN

- GTI's new $100M institutional raise

- Question: Sell GTI or let it ride?

- Question: What companies do we like for long-term investing and why?

- Question: Won't Canadian LPs be able to enter the US soon?

- Question: Trading vs Investing

After an extremely positive start to 2021 we find ourselves asking - should we be excited for what's ahead or nervous of the recent rally we've had?

In this episode we discuss:

- The democrats winning both senate seats and flipping the senate

- The state of the market: should investors be worried by the speculation?

- How investors are moving from "the middle to the edges" across the market

- What is still to come for US cannabis

- How values can evolve over time and how investors have to adapt

- The various capital raises by Jushi, Columbia Care, Curaleaf, Planet 13 and more

- Why what worked in the past for cannabis may not work in the future

- The importance of the MSOS ETF and why it is just getting started

- What happens as institutions start to come in the space

- How to position yourself incase a correction comes

- Why "this time is different" for cannabis investors

In this episode we have some fun and share forecasts and ideas for what we expect to see in 2021

1) Multiple Ways to Win - there will be many different wants for companies and investors to profit in the new year

2) 2021 will be the "Year of Catalysts"

- Potential for new states like New York to flip to rec (also RI, CT, NM, VA)

- Markets transitioning to adult-use: AZ & NJ

- Existing markets having organic growth: MI, FL, IL, PA

- Medical markets opening up or issuing lics: GA, TX, MS

- Potential for political tailwinds if Dems win both senate seats: SAFE and uplisting

3) Volatility + Exercise Caution

- Investors have been spoiled by this bull market

- Keep some cash, stay hedged and be prudent

- Expect bumps along the way

4) Stay Flexible - things change quickly

- investors will need to learn on the fly as the market evolves

- your 2020 playbook that succeeded may need to change for 2021

- higher valuations mean investors need to be more selective and smarter

5) The Great Separation Continues

- Which markets will continue to outperform and why?

- Why will losing markets continue to struggle?

6) The Big 4 is no more

- The big 4 MSOs is an antiquated concept

- Introduction of Verano creates a big 5

- But in reality there is a big 10 already: AYR, Columbia Care, Ascend Wellness, Jushi & TerrAscend

- Investors will have to adapt to these new names which will create opportunity

- Where we see value and what we like

7) Scale will be more important 

- As capital is readily available and legalization accelerates the game has changed

- Shift from pure focus on profitability to having the footprint to be a significant player 

In this episode we reflect on what we've learned in 2020, why it is important and how we plan to improve our game going into 2021. Happy new year everyone!

Discussed in this episode:

- Humility: how this year humbled us and taught us that "no one knows"

- How 2020 was a break out year for cannabis

- What would we have done differently?

- Things change quickly - how perception (and reality) shifted in 2020

- The Big 4 MSOs were the big winners of 2020; who will be the winners of tomorrow?

- How the Fed helped prevent a financial disaster and propelled the markets to record highs

- The AYR and LHS acquisition - what we think and how it went down (and why AYR/LHS could be a win-win)

- Keep refreshing your thinking - don't get stuck on old perceptions of the market (or a company)

- Back to the Future! How you can understand what will happen next

- The information advantage - the 3 tiers of cannabis investors

- Taking risk and making hay while the sun shines

- The value of IR in a company's brand to investors (eg. Trulieve)

- Winning Big, Losing Small: swing big at fat pitches

- The importance of MSOs achieving scale going forward

- A big thank you and new years message for our listeners

Happy 2021!

Back by popular demand we have Alan Brochstein joining us! Alan is known across the industry as "the leading cannabis analyst" and joins us today to share his insight on why he is so bullish on the future of the Cannabis industry. "The Maven" knows this industry and its players inside and out and his 420investor service (https://marketfy.com/product/420investor/) is our favourite resource for making money in cannabis investing, especially in this bull market.

In this episode we discuss:

- Post-Election thinking and the Cannabis Bull Market 

- 4 Reasons why Alan is so bullish on cannabis (the 4 legs of the stool)

- Technicals, Fundamentals, Valuation and Sentiment - which of these points to future upside?

- Names that AB has liked this year and what he likes going forward

- Why investing is "not a beauty contest" and what that means

- How to invest in cannabis if you're afraid of a market pullback

- Why Alan thinks cannabis investors shouldn't ignore Canada

- How California is turning a corner and why The Parent Company could be interesting

- IPOs & New Companies: Verano, The Parent Company, WeedMaps and more

- Shifting from the Big 4 to the Big 10-15 MSOs - what will this mean for the market?

- Revisiting the MSOS ETF and how it is a "game changer"

- AB's big prediction for 2021 and what he's the most excited about

Thank you to Alan for coming on and sharing his valuable insights.

If you enjoyed this episode and want more of Alan's insights and picks, we highly recommend you look into a subscription for 420i @ https://marketfy.com/product/420investor/ 

We also suggest you sign up for AB's free weekly newsletter @ https://www.newcannabisventures.com/subscribe/

Please note we recorded this episode early Tues morning and the cannabis markets has turned ugly by close Tues night.

Which is the important theme of this episode - as hype and speculation return in force to the cannabis industry investors need to be careful and be fearful when others are being greedy.

In this episode:

- What the hell is going on?

- Explaining wild price action over the last few days

- Rally of the "others" not the big 4 MSOs

- ACB as a proxy for the wildness of this market and unsustainability

- How to protect yourself while taking advantage of the "risk on" mindset

In this episode we are joined by special guest Nick Gastevich. You may have seen Nick posting online under the name CannaVestments where he regularly shares financial analysis and commentary about US Cannabis companies. 

Nick has deep insight into the large MSOs and through his family office invested in GTI and Cresco as private companies.  

In this episode we cover Curaleaf, Trulieve, GTI & Cresco's Q3 results and for each company we discuss:

1. Top Line metrics and Growth 

2. Gross Margin and adjusted EBITDA

3. Cash Flow & Capital Expenditures

4. Footprint analysis - which states are driving revenue and profitability?

5. Future growth - which states represent the most future upside?

6. Valuation - what multiple does the company trade at? Do we view it as cheap or expensive?

This is an action packed episode - many thanks to Nick for joining us and sharing his insights

Please note: we had a technical issue and one of our mics somehow had the "witness protection" filter put on. 

In this episode we discuss how cannabis investors should weigh the potential risks associated with COVID and the broader markets

- Vaccine Optimism is pushing markets higher - is too much optimism priced in?

- Vaccine is much welcome news and provides a light at the end of the tunnel 

- However many risks remain as we head into a prolonged "dark winter"

- Lack of fiscal stimulus, lack of US federal COVID response and why a delayed transition is particularly bad this year

- Risk feels mispriced - from bonds to commercial real estate this remains a real overhang

- So what? Cannabis is performing very well but is not immune to broader markets

- Lack of stimulus hurts consumers; market correction will hurt weed stocks

- How do we plan around this? What measures can we take?

- Portfolio and cash management over 2021

- Discussion of MediPharm Lab's BRUTAL Q3 and a longer term outlook

- Thinking about B2B for Village Farms and Cresco Labs

In this episode we digest the results of the US election and discuss why we are bullish on the future of US cannabis

In this episode we discuss:

- Why investors should be careful with this "sugar high" rally on Canadian LPs

- What a Biden win means for US Operators

- Why this is good for future M&A

- How cannabis will fare under a split senate or under a republican senate

- Why "more of the same" is actually a win for existing players

- Why the NASDAQ remains the holy grail and how that impacts the current players

- How The Golden Age of Investing is likely to be prolonged 

We finish off with a few listener questions from Alex, Zachary and Ben D

In this post-election special we discuss what the future holds for cannabis investors and how to manage uncertainty

This week we discuss the importance of continually evolving your thinking in the rapidly developing cannabis landscape.

- Why updating your mindset is so important

- How to filter noise from real trend changes

Topics that we discuss our updated thinking on:

- Flower vs Extracted products

- Brands in Flower (how and why Cookies has performed so well)

- Vertical Integration

- Importance and Long Term Viability of Dispensaries

- Extractors

- Rec vs Medical markets

Lastly we give some final thoughts before the upcoming US election next week

In this episode we share an optimistic outlook for US Cannabis regardless of who wins the Senate or White House in Nov. Instead we talk about the positive developments we expect to see by the time we get to the next US election in 2024 and why we might look back on this period as "The Golden Age".

- What makes this "The Golden Age" for US Cannabis investing? Why does it not apply to Canada?

- Lack of capital, lack of access and lack of good information

- Pricing on Public vs Private cannabis companies

- Radical transformation of the industry expected over the next 3-5 years

- Future recreational states: NY, NJ, PA & FL (representing ~60M people)

- Some glaring inefficiencies in our market and how they will be corrected over time

- Positive developments at the municipal level

- Less talked about markets like South Dakota, Montana and Mississippi (and why they matter) 

- Future volatility and downside risk still very likely (and why that's an opportunity)

Listen to the speakers from last week's Benzinga conference for free @ https://www.benzinga.com/events/cannabis/virtual/

In this episode we take listener questions on the upcoming US elections and US Cannabis in general.

In this episode:

1. Kamala Harris and the uncertainty of Timing

2. Will the US Decriminalize or Legalize? What’s the difference?

3. Will the FDA get involved in THC regulation like they did with CBD?

4. Do we have data to support the thesis that NASDAQ-listed weed stocks can outperform?

5. Low Volume Weed Stocks – should they be avoided? Why might they be a good opportunity?

6. Will the US eventually become like Canada as more capital flows in? Why or why not?

7. How will SAFE Banking affect Cannabis REITs?

8. What is the best Cannabis beverage so far and when will it come to the US?

9. Which players will benefit the most from coming state legalizations?

10. “Don’t sell the winners; come back in a few years” – why not buy and hold instead of trading?

11. Will Weed Stocks bubble then crash (similar to 2018) with the coming US Election?

12. Thoughts on options trading in Cannabis?

13. Which Fortune 500 companies do you see jumping into Cannabis?

14. What is the biggest risk to cash flows for US MSOs?

15. What is going on “behind the scenes” that investors should be aware of?

16. Which MSO would benefit the most from a Biden win or a “blue wave”?

17. Which MSO is the most undervalued?

Thanks to pmitch, Ankur, BuildSoc, Airick-The-Great, SongWriter, Opposite Day, Alderho10 & Zebah for the questions!

A few months ago we discussed Cannabis trading ideas around the US Presidential Election - now with under 30 days to go until the big day we revisit the names we find interesting and our related strategies. The theme of today's episode is "sometimes things get complicated".

- How Trump hitting pause on stimulus talks could hurt weed stocks

- Reflecting on how the market has recovered since the March lows 

- How the upcoming election might cause an extreme outcome and civil unrest

- Why the ballot initiatives in AZ and NJ are such a big deal - and which one matters more

- 4 Nasdaq listed names that have the potential to heat up: Grow Gen, IIPR, Greenlane & Scots Miracle Grow

- Which of these 4 we like the most and why

- The Big 4 MSOs - how are they positioned going into the election and into 2021?

- Demanding a margin of safety in your cannabis investments to hedge your risk

In this episode we try to understand - why is Canada such a mess? Are we approaching an inflection point where things change? Is there a buying opportunity in Canada? 

1. Who Cares? Why investors should pay attention to Canada

2. What Happened? How did we get here

3. Why did it happen?

4. Where are now?

5. Where are we headed?

6. Is it a buying opportunity?

7. What areas or indicators are we watching?

**Note: audio quality is a little funky as we adjust to the new studio but gets better after the 5 min mark; we will improve on the next one!

In this episode we delve into the concept of risk adjusted return when investing in cannabis:

- What is Risk? 

- How do we measure and think about risk?

- What risks are specific to the Cannabis industry that investors need to watch out for?

- Why is it so important to think about risk in this industry

- Why valuation is one of the most important things to investors

- Trulieve's PA Acquisitions - how do risk and return play into making this decision

- How should investors think about potential return?

- Balancing risk and return in your cannabis portfolio

- Examining names like Liberty Health, Trulieve and Ianthus in terms of risk vs reward

In this episode we explore the benefits and challenges of chasing momentum or seeking value in the cannabis industry. 

Topics:

1. Momentum Investing

- What is it?

- How do we find momentum opportunities 

- How does it apply to the cannabis space and why does it matter

2. Value Investing

- What is it?

- What makes a good value investment

- Examples of cannabis investments which are value oriented (LHS & Vireo)

- Pitfalls of value investing

3. Momentum vs Value

- What should investors look at in cannabis

- Why the big 4 MSOs might experience superior growth

- How capital raising creates a competitive advantage

- Cannabis vs Tech and "winner take all"

4. Our Strategies

- Investment decisions made in 2020

- Private vs Public investments

- US Election in Nov - which stocks we've purchased to try to ride the momentum

In this episode we are joined by Nick Gastevich who is known on the forums as CannaVestments. He is known for deep cannabis knowledge, a keen analytical eye and being an all-around nice guy.

Nick runs a family office along with his brother - they started in the industry in 2014 with an investment in Green Thumb. He joins us on this episode to do a deep dive on the "Green Chip" cannabis names which have captured investor attention lately.

In this episode we review:

1. Green Thumb (GTI) 

2. Trulieve

3. Cresco Labs

4. Curaleaf

For each company we review

- Footprint of each company 

- Key markets for each company (now and in the future)

- Which markets and assets are the most exciting

- Q2 Financials - Revenue, Gross Margins & Adjusted EBITDA

- 2020 & 2021 Earnings Multiples

- Valuations of each company: now and in the future

- Ranking of the big 4 at current prices

Note: This episode was recorded a few weeks ago, since then Florida has legalized edibles

In this episode we do a 2020 update to our "How to Invest in Weed Stocks" episode from 2019. A lot has changed in the year since and it's important to upgrade your game accordingly! We discuss how things have changed and the mindset you should have going forward.

In this episode:

1. Understanding Risk in Cannabis Investing

2. What you should learn about 

3. Advantages of learning

4. Understanding the cannabis business

5.  Deciding to Invest - Questions to answer before Pulling the Trigger

6. Trading vs Investing in Cannabis

In this episode we have our first guest ever! Alex Gastevich runs a family office along with his brother and mother. Based out of Chicago the Gastevich family were early round investors in GTI in 2014. Alex joins us to discuss:

- Investing in early round Cannabis companies (GTI and Medipharm)

- The value of having multiple perspectives in investing decisions

- What's the craziest thing you've seen in the cannabis space?

- What makes a cannabis company successful?

- What are signs of being in a cannabis bubble?

- What's the biggest lost you've taken in this industry?

- What's your end game?

This was a very fun episode, thanks to Alex for joining us!

In this week's episode we answer questions regarding the amazing performance of the large MSOs:

- Are US MSOs better than the Canadian LPs? 

- Why are they out performing?

- Why the US is a better place for the cannabis sector

- What makes a market successful for cannabis companies (Canada, California, Oregon vs Illinois, Florida & NJ)

- Canopy vs GTI vs Trulieve

- Are the US companies over priced?

- Are the Canadian names priced for value?

- The power of the NASDAQ listing

- A word of caution on chasing momentum

In this market update we revisit our concerns from the March COVID episode and the January Mass Extinction Event episode. We cover feeling bullish on cannabis (and why) as well as understanding why weed stocks are so hot (and if it makes any sense).

In this week's episode we are excited about acceleration of future legalization of cannabis in the US and we discuss trading and investing strategies for cannabis stocks.

1) Biden - Sanders Task Force Plan

- How real is this? How does it play into the coming Democratic National Convention?

- Social Justice reform, Police reform and change all accelerate cannabis legalization

- DNC provides an opportunity for democrats to discuss ending the war on drugs 

CAUTION - legalization hype is building quickly but actual legalization takes years to pass and implement

2) Investment Strategies for Legalization Hype

Many different ways to play this with various risk/reward - which makes the most sense?

a) "The Big 4" - GTI, Trulieve, Cresco & Curaleaf - obvious candidates as retail comes in

b) Ancillary & US-Listed Companies - IIPR, Greenlane & GrowGen

c) Tertiary Plays - Canadian LPs, Foreign Companies, Low Cost Countries

Remember: Hype is not rational - capital will flow regardless of valuations

US Legalization hype will make Canadian hype look like "a drop in the bucket"

3) Institutional Capital Flowing into US Cannabis

- How will it play out?

- When should investors get in? When to get out?

- What are the best risk/reward strategies?

This episode we explore: Is Cannabis investing or Gambling?

Whats the difference?

Why does it matter?

Examining your own behavior and changing it

We're finally back in the studio! This week we look forward at the various ways the US could legalize cannabis

1) Why You Should Care about US Legalization

- US is the crown jewel of the international market

- Over $12B USD in state-legal sales in 2019 (vs $1.2B CAD for Canada)

- Huge capital available once NASDAQ & NYSE listings are available

- US has higher prices, limited licenses and far less government regulation for cannabis

2)  How will US Legalization Go Down?

- Likely to be a phased approached as opposed to one big legalization

Several possibilities for how it can be done:

a) Decriminalization

b) De-scheduling or Re-scheduling (may come under FDA regulation)

c) SAFE Act - access to banking and lending

d) STATES Act - allows state law to be compliant with federal law

e) Full Legalization - federally mandates legalization across entire country

3) What is the Biden Plan? Will it actually happen?

- Biden Plan is a marketing document designed to excite the base

- We need to see Biden mention the plan or champion it before believing it

- Biden Plan involves medical legalization + STATES Act

4) How Will Legalization Change the Industry?

- Effect on industry will depend on the type of legalization

- SAFE vs STATES vs Full Federal Legalization

- Being on US Exchanges will be the biggest catalyst

5) Will cannabis be allowed to cross state lines?

6) How to Invest around Legalization

Market Update: COVID risk is growing rapidly but Cannabis is looking good

- Broader market remains buoyed by Fed Support but valuations are stretched

- COVID is accelerating across US and is a massive threat with exponential growth

- Lack of political will to close down economy again; somehow wearing a mask has become a political issue

- Relation to cannabis: do you look at the stats or listen to the pundits?

Cannabis

- Has performed very well in pandemic; strong sales; essential status

- Cannabis is perfect for a COVID / isolated world

- Long term: accelerates opportunity for legalization and reforms

- RISK: stimulus still flowing, things can slide backwards (Ontario pulling back delivery and curbside)

o Nevada can be soft ;  But updates from AYR Q2 are encouraging

o Many lower quality companies on the edge

- Diving deeper into AYR Strategies (CSE: AYR)

- Sentiment: Investors are upset and can easily dump despite good results (eg. LHS)

- Separation of winners and losers but many retail investors don’t really care (gamble vs investing)

In this episode we dive into Medipharm Lab's Q1 2020 results which greatly disappointed the market

- What's going on  with LABS? Why did it have such a drop off in revenue?

- How does it compare to Valens?

- Examining their recent $37M financing (good and bad)

- How the slow 2.0 rollout is hurting the extraction industry

- Why 2019 was such a good year for LABS - will it recover?

- How will the extraction landscape look in the next 1-3 years?

In this episode we discuss strategies for taking advantage of the current bull market the Fed has created

- The realization that the Fed will actively try to prevent the market from falling to prevent fear from dominating the market (as shown on Mon)

- The market is likely to remain distorted which creates opportunities for investors

- How do we play this bull market while being cautious about the disconnect between prices and fundamentals?

- Debating investing in legacy business like Airlines and Theatres

STRATEGY

- PATIENCE! Keep your powder dry as it takes time for the market to re-adjust

- Thinking of investing like private placements with the ability to hold for 1-3 years if prices tanks

- Buying top tier companies like Green Thumb (GTI) with the understanding it may take a while to grow into the value

- Deploying cash selectively in overlooked names with good risk/reward

- How? Looking for small cap cannabis companies which have good fundamentals but have lagged in share price

- Liberty Health (LHS) as an example

- Comparing Canada to the US

LOOKOUT

- Don't chase high prices on low volume

- Emotional investors are back! Watch out for them

In this episode we talk about the unbridled optimism in the general equity markets and how that flows into cannabis. 

- SPY is 7-10% HIGHER than it was 1 year ago

- Market effectively pricing in V shaped recovery

- Does this make sense? Should investors be buying?

- The importance of a margin of safety in investing

- How cannabis has been buoyed by the broader markets

- The "Big 4" MSO: GTI, TRUL, Curaleaf & Cresco

- Potential risks being overlooked by the market

In this episode we delve into understanding the disconnect between real life and the stock market.

Why is the S&P above 3,000 when the economy is frozen? Why are cannabis stocks on an absolute tear? Does this make any sense?

What can we learn from this disconnect and how does it influence our investing philosophy?

Two Key Principles:

1. Anything can happen in markets

2. Nobody knows what will happen next

After a strong week for cannabis stocks we delve into the reasons for optimism for cannabis investors.

1. Strong Results Prove out the Investment Thesis

     a. GTI posting 25% EBITDA on $100M USD of revenue

     b. TRUL likely to post 50%+ EBITDA on similar revenue

2. New Markets set to Open

     a. NJ (9M) and AZ (7M) both on the 2020 ballot 

     b. NJ could cause domino effect with PA (13M), NY (20M)

3. COVID-19 Proving Sales are “sticky”

     a. Cannabis being recession proof / resistant; defensive sector

4. Canada Getting Better

     a. 2.0 rollout and Ontario retail expansion

     b. ACB and Canopy improving (not out of the woods yet)

5. Wildcard – SAFE Act & Legalization / Election Talk

     a. Possibility to get SAFE through senate with COVID bill

     b. Potential election talk related to cannabis legalization

In this episode we examine the key take aways from Berkshire's 2020 Annual General Meeting (AGM). 

Why did Buffett sell his entire airline holdings (~$6.5B) at a loss?

What can we learn from the legendary investor with regards to his view on the current market?

We also discuss how we look at investing from a long and short term lens.

Can we really be long term investors in this space? Are we better off taking short term profits?

When does it make sense to "sell it all" and move to the sidelines?

In this episode we touch on the recent developments in the general markets and cannabis stocks. 

The market has rallied considerably in the last few weeks to within 15% of it's pre-COVID all-time highs. Does that make sense? Why is it reacting this way? And what's with the recent cannabis rally?

We go through what we think is happening and why you should exercise caution before chasing the dragon. 

Happy 4/20! In this episode we take a step back and review how much the cannabis industry has advanced in the last year.

1. From Boom to Bust - how the capital markets overshot and are now correcting

2. Milestones - major progress has been made in the last year

3. Is it a good time to invest in cannabis? Positives and negatives

Is the S&P 500 overvalued or cheap? That depends on what you think the "new normal" will be. In this episode we discuss how the economy may look very different post-COVID and how long it could take to recover:

The strong market rally - what are investors thinking?

3 reasons why the future normal could be very dissapointing

1) Record high unemployment - 16M+ new claims in the last 3 weeks (staggering)

2) Decreased consumer spending as confidence falls off a cliff

3) Longer term structural issues - what does "opening up" look like?

CANNABIS:

- Bad news for Harvest (HARV) and Ianthus (IAN)

- Good news on Illinois numbers ($188M USD for Q1 Sales)

- Aurora (ACB) 12:1 stock split and new ATM facility - what this means

- IIPR Short Report - more on this next episode

In this episode we dissect the recent market rally and urge caution that there is much more pain to come

- How Deep will COVID go? How long will the lockdown last?

- Is it time for investors to be fearful or be greedy?

- Reasons why the market is underpricing future risk

- Buy/Sell/Hold - what makes sense?

- How Alternative Investments fare when the general market corrects

- How fundamentals and valuation may change even after COVID passes

- Concerns and things to watch in cannabis

- Examining Medipharm Lab's Q4 results

- Village Farms BRUTAL Q4 Financials

- Exercising caution on HEXO

In this episode we delve deeper into the market mayhem that has happened over the last 10 days - things have changed for investors.

- How long will the COVID shutdown last?

- How deep will this go? How bad will it get?

- How should investors change the way they look at the markets (broader markets vs cannabis)

- The worst is yet to come - our thesis on how the next few months could play out

- Why we are selling and raising cash in anticipation of what's next

- Buckle up! Be ready for a longer shutdown than you might think

- How cannabis is behaving so far and what to keep an eye on going forward

- What will be the best investing opportunities in the coming weeks

PS - please excuse the audio quality; we are recording remotely on our phones!

In this episode we do a 180 on coronavirus and admit how we underestimated the virus and its potential to completely turn our economy and life upside down. We dig into how markets are reacting, how bad it is going to get and how this will ultimately affect broader markets and of course, cannabis investing.

- We were 110% wrong - here's what we underestimated

- The Shutdown: stopping the virus means pausing our economy and way of life

- Mass extinction event now applies to many small business outside of cannabis

- How bad is this? How long will it last?

- Predictions: How will government support business and households?

- Is this a 30 day event? Or a 6 month event? What happens if it goes longer than we think?

- How will cannabis behave in a shutdown? Will consumers buy online?

- Weed Stocks in a corona era - how will they behave? Who will win?

- Should investors open their wallets or proceed with caution

In this episode we explore the irrationality and panic which has pummeled stock markets and absolutely brutalized cannabis markets.  We also something of a market update where we discuss news on Canopy, Cresco, Village Farms and the Florida Market.

- What happens when there is a panic and a "rush to the exits"

- What we are seeing in the market today

- Does the market know more than you? 

- Don't expect the market to act rationally in the short-medium term (eg. VFF settlement)

- Several overhangs which will create drag for cannabis investors

- Canopy shutting down 2 BC greenhouses

- Cresco President abruptly "resigns" (bad sign!)

- How bad were Tilray Earnings (hint: really really bad)

- Florida House looking to cap THC at 10% for under 21 patients

- 2 questions to ask yourself before investing in cannabis today

In this episode we talk about the recent pummeling the cannabis markets (along with the broader markets) have taken due to Coronavirus fears. How does this relate to our on-going thesis of a 2008-style cannabis liquidity crisis? What are we buying right now?

- What is going on? How Corona is affecting broader markets

- Are the fears overblown? What potential risks are there?

- How does Corona affect the Cannabis Markets?

- What quality names are we buying at "deep value"

In this episode we emphasize the importance of digging into a company's financials for yourself to see if any warning signs are present. It is CRITICAL you are looking at a company's financials (sedar.com) 

- How we realized there was a "mass extinction" event coming

- Why we sounded the alarm bells 30 days ago

- Learning from the companies who went broke: DYME as a case study

Warning Signs:

1. Cash balance rapidly declining 

2. Large losses on income statement (and the importance of gross margins)

3. Cash Flow Statement vs Income Statement (why this matters)

4. "Circle The Drain" Financing - equity or debt raises at smaller amounts and worse terms

5. Lawsuits - Company gets into more lawsuits and disputes as they can't afford to pay their bills

Bonus - Importance of receivables and taxes payable

**Important - take a holistic view of the company. Having one of these items present is not nearly as having several red flags

In this episode we go over mistakes we made in our cannabis investing decisions and how we've improved our game since.

This is especially important as we are seeing investors repeating the same mistakes.

- Where did we go wrong? The importance of humility and continual learning

- Checking your ego at the door on the way up

- Investors are not learning - same mistakes are being repeated

- Deals "priced to perfection" - investors not getting paid appropriately for uncertainty

- Relying on headlines and "experts" for information (which is inherently biased)

- Getting information from online echo chambers of cheerleaders (weak surface level due diligence)

- Not actively seeking out negative or contrary opinions

- Investing on hype and potential rather than fundamental prospects

Forward Looking: What if Bernie Sanders wins the election? Discussing federal legality

Hello CIN listeners! In this episode we talk about Aurora and other companies who have cut jobs. How do we right the ship? How do we fix the existing mess that we are seeing?

Although we continue to warn investors for the fallout about to occur we also want to explain why we are still actively investing in the cannabis space. In this episode we discuss the major factors which will drive the sector longer-term:

1. Canada - 2.0 Product Ramp & Ontario Retail Stores (~500 expected by end of 2021)

2. New Markets - International (Mexico, Israel, EU) + US (New Jersey, New York, Arizona and more)

These two points alone will potentially bring billions of dollars of sales online in the next 2 years!

3. Rise of CBD and other Compounds (CBN, CBG, and more to come)

4. Potential for Bio Synthetic Cannabinoids 

It's important to keep a longer-term focus as it takes time to build real businesses and have new programs roll-out. 

In this fun episode we talk about what we've seen in Toronto for Cannabis 2.0 Products.

Some topics we cover:

- The Rollout of 2.0 Products

- Types of products we've seen

- Which products are selling the best

- Concerns for the future

- Some of the best products we've seen so far

In this week's episode we digest our warning from last week and discuss some issues which have come to the surface. Many of these are warning lights flashing for weed investors to exercise caution:

- How we got here: people are not paying attention

- BMO issues an optimistic Price Target on Canopy for $40 CAD. Why this matters (and why they're wrong)

- Discussing Medipharm's $9.8M CAD statement of claim against HEXO 

- Are we wrong? Is the negativity in the space already "priced in"?

- Where are we now: Hot Air Balloon Metaphor

- Should companies just stay private instead?

- Promo companies not promoting - what that means

- Long-term bullish: Why the winning companies will benefit from all this

In this episode we discuss several types of bias we see in ourselves and other cannabis investors. The ultimate goal is to understand patterns of thought and adjusting to make better investing decisions.

- Understanding your own bias from your investing background

- Dissociating your political opinions from business reality

- Avoiding group think and online echo chambers

- Be careful of confirmation bias and avoiding negative information

In this episode we lay out a serious warning to our network about the potential for an impending capital & liquidity crisis for the cannabis sector in 2020. 

Companies are rapidly burning cash and financing is very tough to secure. Many companies (especially smaller ones) are running out of runway faster than you might think. Why is no one talking about it?

- What is going on?

- Fundamentals vs Capital Markets

- How bad is it? (hint: pretty damn bad)

- Predicting what happens next

- How to protect yourself as an investor

- Survivors will be long term winners

- Medium-Long term very bullish on the cannabis space but have to pick your spots accordingly

- What to look for in all of your holdings to evaluate your own risk

- Are we wrong? Thoughts on things we may have missed

**Do you agree or disagree? We'd love to hear your thoughts - CINpodcast@gmail.com

In this episode we make some predictions for what is to come in 2020 for cannabis investing. In this episode:

1. "The Great Divide" - Winners & Losers Emerge

- Mentality will shift: sector will stop moving as one and winners will emerge

- Shifting from ETF mentality to stock picking (from passive to active)

- Example: Trulieve should separate from the pack given their isolation in Florida and strong financial performance

- Losers will lose HARD while winners will distinguish themselves

2. Predicting Sales for Canada in 2020

- The $3B sales bet...under or over?

- Major catalyst for 2020 sales with Cannabis 2.0 and Ontario store increases

- Will be a slow rollout for both, so the ramp will be gradual

- Many unknowns still to be seen (like how Beverages sell)

- Still a short list of winners in Canada who will be in a better position in 2021

3. The US & Canada - The Separation Begins

- US will begin to outperform Canada 

- Illinois and Michigan will prove to be very strong markets with a strong ramp in 2020 but will really shine in 2021

- Data and results will drive investors to invest in the US in 2020

- 280E Taxation remains the biggest issue US operators will face

- Big States which may go Rec: Pennsylvania, New York, New Jersey, Arizona (I mentioned Florida but their initiative is now dead)

- New Jersey seems the most likely and represents a very lucrative market ("Florida 2.0")

- Mexico story looks promising, Europe story is less attractive 

- CORRECTION: MediPharm did NOT get their EU GMP certification yet, they got their Australian GMP

4. Rough Patch Ahead - Be Careful!

- Capital crunch has turned into a capital crisis - very difficult to raise funds

- Very few companies have gone under despite being very close to it

- Circle the Drain Financing: Desperate companies will take crappy deals to try to save the ship

- Some companies will turn it around, others won't

- Bankruptcies will cause a domino effect and pull many others down with it

- Ramp up of sales in Canada will be slow and won't be fully realized until H2 2021

- The general cannabis market will get punished as this occurs

- There is no bottom for crappy companies! Some will go to zero! Especially those low on cash and burning fast

- The companies who survive will come out stronger and better positioned

5. M&A From Unlikely Sources

- Companies will look to merge to survive...but cash is king!

- Potential for non-cannabis companies with cash on balance sheet combining with struggling cannabis companies

6. Up & Downs Continue

- Things will not go straight up or down. Volatility will continue

- FOMO is dead. Be patient, be picky and take profits!

- No federal legalization in US in 2020 but 2-3 major states to go rec

QUESTION: What are your predictions? Email us!

If you are not changing the way you invest going into 2020 you are in trouble!

In this end of the year episode we recap the top 5 lessons learned for Cannabis Investing. 

#1 - No Excuses, Play Like A Champion

- Every investor is the CEO of their own account

- Take full responsibility for your own results and learn from your mistakes

- "It's not your fault but it is your problem"

#2 - LEARN LEARN LEARN & Pay Attention

- The importance of investing time and energy into learning this space

- Continually evolving your thinking in this fast moving environment

- Building a network of trustworthy investors to bounce ideas off of

#3 -  Investing vs Trading in Cannabis

- Shifting away from the negative stigma of Trading

- Learning what can affect short term movements of a stock

- Marrying the best of both worlds to find the strategy that works best for you

#4 - Read Data NOT Headlines

- Importance of reading past the headlines

- Acknowledge your weaknesses and improve upon them - especially if they are financial related

- Future will be financial and results based - make sure you are analyzing for yourself!

- Good data is like a crystal ball

- Beware paid and biased information sources (including investment banks)

#5 - Quality over Quantity

- Shifting from a broad portfolio of shiny companies to a consolidated list of winners

- Willing to make lower profits in favour of lower risk

- Getting paid for taking risk on earlier stage names

- Running sensitivity on valuations to see what the margin for error is

CLOSING - NOMO FOMO

- This business is extremely capital intensive, even the best companies will need to keep raising

- Investors will have chances to buy into these companies along the way as equity raises will be needed

- Keep evolving your mindset into 2020 and beyond!

Please note: This episode was recorded before the Trulieve short report came out. Our detailed breakdown of the Trulieve report here:  

https://www.reddit.com/r/weedstocks/comments/ebztnd/my_analysis_of_the_trul_trulieve_short_report/?utm_source=share&utm_medium=web2x 

Next Episode: Top Predictions for 2020

In this episode we talk about how we kick the tires on potential private investments.

- How we evaluate potential private deals

- Mentality behind venture investing

- Potential Red Flags & Deal Killers

- Personal Frameworks for Evaluating Private Deals

Next Week: Stay tuned for fresh episodes on 2020 predictions and top picks!

In this episode we explore 4 common overhangs which can weigh on Cannabis Stocks. Most of these things are unique to small cap and venture investing.

- Overhang: Factor which negatively impacts a stock (typically short to medium term)

- How this helps answer "Is This the Right Time to Buy"?

1. Cap Table / Share Structure

- Understanding the importance of the cap table

- Why previous rounds of financing matter and the "Game Theory" involved

- How warrants and cheap paper can drag on a stock

2. Share Unlocks

- Unlocks can create a huge overhang, real or perceived

- How Mergers & Acquisitions create large unlocks

- Resource for US MSO unlocks: https://www.statesidecannabisinvestors.com/calendar

3. Timing

- Examining two low volume seasons: Summer & Tax-Loss Period

- Debating if timing matters for fundamental investors

4. Capital Raises 

- Why capital raises drop the share price

- Why capital raising is actually not a bad thing in the long-run

- What to look out for (straight equity vs debt vs warrant coverage)

- How to Predict a Future Capital Raise

**Note: Episode was recorded prior to MedMen/Pharmacann being called off (but the concept still applies)

In this episode we examine an article titled "The Cannabis Bubble has Burst". Were we in a bubble? What is a bubble? What does this mean for cannabis investors?

- The definition of an investment bubble (valuations vs fundamentals)

- Why it's so difficult to identify a bubble

- The 5 Stages of a Bubble: Displacement, Boom, Euphoria, Selling & Panic

1. Displacement: How it starts

2. Boom: Quick money being made and momentum builds

3. Euphoria: FOMO is king and the investment goes mainstream

4. Selling: Sophisticated Capital exits 

5. Panic: The Sell-Off deepends and the bubble bursts

- Mistaking luck and risk-taking behaviour for genius

- Is Cannabis A Bubble? Why or Why Not?

- How US Operators will drive fundamental value over time

- How strong operators will dominate the market in a capital crunch

In this episode we dive into the world of Sale Leaseback transactions. We are seeing this pop up more and more as the capital crunch gets worse.

- What are Sale Leasebacks?

- How do they work?

- What's special about Cannabis related Leasebacks?

- Why are we hearing so much about these kind of deals?

- Who is Innovative Industrial REIT (IIPR) and how important are they to the industry?

- Would Manish buy IIPR or another Cannabis REIT today? Why or Why Not?

What happens next for Cannabis stocks? Will the market bounce back to new highs or is there more pain in sight?

- Short Term Trading vs Long Term Investing

- Yes and No: Why some companies will surge and some will fail

- Sector wide sell-off hurts everyone

- Winners starting to bounce back and differentiate themselves

- Why many companies will fail going forward

- How did we get here? Pre Legalization hype based investing

- Old Method: Using "Funded Capacity" and Lofty Projections

- Today: Matured to Show Me instead of Tell 

- Examining Revenue vs Margins vs Earnings vs Cashflow

- Using Origin House as an example - selling off companies that don't smell like Winners

- Balancing Revenue Growth with Burning Cash

- How do we find winners? What to look for (cash, margins, earning potential, market, business type)

- Cash and Cashflow and Capital Markets are KING

- How to Play the Volatility in the Sector (trading vs investing)

- Future Catalysts and Landmines

In this episode we explore the pains and issues Canada is having.

What are the core problems? What are the solutions? Will these problems be solved? When?

- Forecasting the Canadian Weed Stocks going forward (how to play the volatility)

- The Good News: Many of the problems are fixable and will eventually be solved

- The Bad News: We are 12-24 months away from any earnings relief. Many companies won't survive

- Explaining today's issues in terms of Supply & Demand

- Companies are missing revenue guidance (HEXO, OGI, Canopy, etc)

- Large build-up of inventory in the system (exploring the numbers)

- 3 Core Problems: Retail, Marketing and Distribution

Retail: Ontario is far lagging behind and needs 20x the retail stores

- Why this problem might get solved and how long it will take

- Why private owned retail is SO important 

Marketing: Why the strict rules are hurting the system

- Why retail can help solve this problem

Distribution: Government playing middle-man causing huge issues

- This may change in Ontario but unlikely to in Quebec

Picking Winners: What to look for in companies that can weather the storm

Conclusion: How investors should act going forward knowing what is coming next

In this episode we explore Maneesh's thesis that Florida is the best cannabis market we've seen so far. Here's why:

- The 3 levels of cannabis legality - which is the best for investors?

- Why is every big company focusing on Florida? Profitability

- Trulieve leads the industry in EBITDA margins and Earnings

- What makes Florida such a profitable market?

- Overview of Florida's rules and set-up

- Vertical Integration: Forcing full Seed to Sale

- Cultivation > Extraction > Processing > Distribution > Retail

- Barriers to Entry - the impact of strict Vertical Integration

- Why it is harder than people think to scale in Florida

- Capturing high profit margins: what makes a business attractive

- Transparency: OMMU data lets us see weekly sales

- Rapid Growth: 170K to 300K patients in a single year

- Doubling of product sold + flower introduced in 2019

- Full Rec: Legalize It Florida vs Regulate Florida

- Will Michigan or Illinois surpass Florida in 2020?