What in particular are you looking at when you’re determining whether or not you think a company is a good investment? What signs are there that there may be a deal to be had? What are red flags?
Matt, there is a good reason why our proprietary metrics are putting the recommendations of some of the others to shame, In this industry, we look to those companies with strong market presence and growth (or expected to be disruptive), uniqueness (how easily can it be replicated), excellent stewardship (invest in the team) and committed to efficiencies without compromise to effectiveness and of course with an eye on reducing costs. JVs and partnerships. There are some companies that for whatever reason cannot gain traction ... but I feel in time these companies will (or worst case become targets of M&A). I look at their strategies and business plan and compare that to their results. Many believe, the future of Canada resembles dry-flower being the domain of the micro or craft growers and for extractions being dominated by many of the current larger LPs. That framework plays a role in my modelling.
How does that transfer to an LP that is only in the medical stream OR to an Organic play where we know already from the food industry that consumers will pay a premium for certified organic products? I also like diversified and risk management approaches .... whether by business line, geography, etc. The latter may be a reason why we did a case study on Quinsam Capital over a year ago I think when it was trading around a dime and Quinsam pays a regular quarterly dividend. Investors that jumped on it made over 10x (>1000%) their money in just a few short months --- even today despite the overall 2018 bearish sentiment to date ... Quinsam remains up over 300% from that initial coverage.
others. Over valued? Imagine a true breakthrough in any of these. Over valued? Imagine if Canada experiences a 15% or greater decline in alcohol as has been the case in some other jurisdictions and that decline was in favour of cannabis. Over valued? Imagine if cannabis and hemp become a health and wellness staple? Imagine animal care ... Imagine if as a species we had it right for thousands of years with respect to cannabis and hemp (yes, i realize hemp is in fact a strain of sativa but its legal status differs hence my deliberate separation) ... and why and how global prohibition came into being is open to debate but what ever the reason it certainly was not based on science, medicine, patient relief and comfort ... in other words, not due to Service over Self-Interest.
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