There is an obsession with Sundial Growers (SNDL) among traders. Shares have increased 140% over the year and I think the only reason is that this is a low-priced cannabis name that can be traded in all brokerages.
Traders see it as “cheap” despite its $ 1 billion market capitalization. This is the same company that was sued because it did not reveal that the product had been returned to it because it contained mold and pieces of rubber gloves.
I often made fun of Aurora Cannabis (ACB) for issuing stocks as if they were candy. Sundial Growers is becoming the “keep my beer” response to Aurora. Drowning in debt, Sundial has used every stock of its shares to issue more and more shares. They’ve broken the billions and I’m not sure there’s an end in sight.
The company goes from wholesale cannabis to retail, but this is not unique to the industry. In fact, the sundial is far behind many competitors in this regard. It hit them hard, as net sales recently fell 46% year-over-year.
Maybe the Twitter guru who will take you to this stock won’t admit it, but in my opinion it’s a hype and a drain. Ironically, this can save the company as it has a stronger balance sheet, but with a valuation in excess of $ 1 billion, there are much better places for an investor to put their money earned, whether they want a aggressive as moderate name.
Village Farms (VFF) should be the first name on everyone’s list when changing something instead of a sundial. The fact that these companies have the same market cap is absolutely ridiculous. Village Farms offers the lowest production cost, owns 100% of Pure Sunfarms, owns a huge greenhouse in Texas ready for CBD production when it is legal and has an international reach. They also have a triple the sales of sundial, have a positive and profitable cash flow. Now tell me again why your guru makes you buy a sundial?
Buy a multi-state operator. Which one? Almost anyone. Illinois-based Cresco Labs (CRLBF) is at the top of the list. With a market cap of about $ 5 billion, you’ll get cannabis king of Illinois. Spread across nine states with 15 production facilities and 20 dispensaries, Cresco has one of the largest footprints in the United States. They reported more than $ 150 million in revenue in the last quarter alone along with profitability.
Trulieve Cannabis (TCNNF) is another alternative. Revenue of $ 136 million in the third quarter came just below Cresco, but the Florida-based cannabis company produced stronger EBITDA. And I wouldn’t blame anyone for going with Green Thumb Industries (GTBIF) or Curaleaf Holdings (CURLF).
The easiest thing to do would be to buy the Advisershares Pure US Cannabis ETF (MSOS), which will provide you with all of the above stocks and 25 more.
For those people who want to stay in the aggressive lane, two minor considerations are Juva Life (JUVAF) and Cybin (CLXPF).
Juva
Juva is a vertically integrated cannabis company in California. Its CEO received the first license granted to the state. While growing, processing and selling cannabis through distribution and retail will provide a good revenue stream, Juva is taking the less traveled path, which should lead to huge returns for shareholders in the future.
Juva will combine IRB-approved patient research with testing along with verifying the integrity of the product through a network of doctors and clinics along with its own $ 5 million Class 5 clean room.
This will not lead to phase I trials with the FDA. Instead, Juva will collect a lot of data reported by patients. These results reported by patients for precision cannabis products formulated by Juva will allow the company to demonstrate that the X produced by patient Y generated Z responses / results. The most common goal / objective of Z is the reduction of a symptom in a specific percentage.
For example, let’s say I reported a daily pain level of 7 on a scale of 1 to 10 before starting to use a specific dosage / formulation of Juva precision cannabis. Then, after using this product for three weeks, I reported a new pain level of 2 on this same scale, which is worthless. Now imagine whether 10 people or 100 people or 1,000 people reported similar results. No, Juva can’t make any medical claims, but she could say something like, “Well, Mr. or Mrs. Patient, 85% of people with similar symptoms reported a reduction in pain using this specific variety. of cannabis. “
The short-term result: by working with doctors, Juva can guide clients to the strains based on the results reported by users. The long-term hope is that doctors will be more likely to adopt cannabis recommendations based on actual patient data.
With each patient report, Juva’s data set grows and we know the value of data in today’s world. This will help you build a valuable and marketable medical database. It could entice other people in the cannabis world to associate with Juva and her idea. Since large pharmaceutical companies will not risk studies or testing until the federal road is clear, the data they can get from Juva would give them a huge advantage over competitors when the road is clear. Juva’s current study goals now revolve around inflammation, oncology, neurology, pain management, and opiate reduction. Any possible replacement of opioids would be of great benefit to society and a great financial risk to large pharmaceutical companies.
Cybin
If Juva is the least traveled road, Cybin is the new road that is being built. Cybin does not work in the cannabis space, but in the next evolution of pharmacological treatment, psilocybin. But let’s not talk about recreational use. Management sees itself as a life sciences company. The current goal of the company is the development of treatment regimens consisting of its own psychedelic molecules and the development of its administration mechanisms, such as the sublingual film supply system and inhalation.
The company recently announced that it would raise C $ 20 million. When the deal was closed, they raised more than C $ 34 million, which bolstered an already strong balance sheet with one of more than US $ 40 million. And they are going to put that money into operation.
According to Cybin, the company intends to sponsor a phase 2a and phase 2b clinical trial in patients with major depressive disorder (MDD) later this year. The trial will be conducted through the University of the West Indies (UWI) and will comply with the guidelines of the International Conference on Harmonization (ICH) and good clinical practice (GCP). In doing so, Cybin may use the data collected as a connection strategy to access other jurisdictions such as the United States, Canada and Europe.
If one of these cannabis companies were smart, I would take Cybin before it became too expensive. With a market cap of just $ 300 million, I expect it to reach 2 billion before the sundial does.
If the sundial were smart, they would go into that jar of candy and offer Cybin between $ 500 and $ 700 million right now and become something that can compete against all the previous names. Until then, I would feel much more comfortable owning a mix of VFF, MSOS (or some individual MSO names) and JUVA or CLXPF long before maintaining an SNDL quota for longer than a scalp operation.
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