Planet 13 Holdings acquires Next Green Wave and, I think this is a great move for both companies. Both PLNHF stock and NXGWF stock are in my top picks of best marijuana stocks to buy now so, this adds to a track record of mine of about 5 of my Top Picks being acquired by other companies. The deal has NXGWF stock being swapped for PLNHF stock at ~1;1/10th meaning, for every one share of NXGWF stock share you hold you get ~1/10th of a PLNHF stock share. Initially, I looked at this as being undervalued relative to what NXGWF could be valued at. After all, in the past few months the selling of a board director's shares, a director that promptly left the company, pushed NXGWF share price down significantly. My question due to this was: If that selling did not happen, would NXGWF shareholders gotten a price relative to the $0.50 per share price NXGWF was trading at before the selling? Nonetheless, both stocks are significantly undervalued relative to where they should be when compared to the broader market.
MariMed MRMD Stock printed its Q3 financial numbers to very little fanfare; MRMD stock initially sold off. But, on a comparative basis, when you look at the valuation model for the broader stock market, there is a tremendous amount of value packed into MRMD stock. And, while currently cannabis stocks are being pressured by short sellers, for some of these stocks, this may not be the wisest strategies. The value packed into some of these stocks is enough that with any positive news release for cannabis stocks, these stocks could go nuclear. Nonetheless, I do not dwell on stock prices, per se. But, these are undervalued marijuana stocks and, MRMD stock is very undervalued when you look at MariMed’s current and future profitability. Current prices have MRMD stock increasing over 200% at the current valuation. Until the bigger name cannabis stocks start printing new all-time highs, the stocks that many retail investors rushed in to buy upon cannabis legalization, these retail investors are loath to add in new positions. Because of that, there is no perpetuation of upward movement; short sellers step in.
Lowell Farms LOWLF stock is selling off. As it is one of my top picks I wanted to chime in on the latest financial release. Revenues were off and margins dissipated along with that. The stock selling like it has is bringing in a lot of consternation and stress among investors. But, this is a Top Pick and I wanted to assure everyone that if you look at LOWLF stock from the right angle you see what you need to see and can be reassured. As I have mentioned in the past few videos and emails, I am putting together Discounted Cash Flow statements on the various companies that I cover. With Lowell Farms, all one needs to do is look at the direction and results. From that, the shortfall in revenue dissipates as a concern. Let's break down some key components of Lowell Farms so that an investor can see what I am looking at. At the bottom of this analysis, you can find my call on where I expect LOWLF stock to come in at.
Germany has legalized cannabis. Sort of... it's more of a promise at this point, but the plan is already being considered. Germany has 84M people; Germany just became the world’s largest cannabis market. This is big news for IM Cannabis Company IMCC stock as they are an international company poised for significant growth in Germany with the recent cannabis legalization. IM Cannabis Company is still in its growing stage; they are in Germany, Israel, and Canada. Financial numbers are not stellar at this point for IM Cannabis Company but that has more to do with the fact that they have been merging several companies recently. There was solid revenue growth for the latest Q3 quarter. But, other metrics are still lagging; IM Cannabis will need to significantly increase its revenue base in order to see improved costs and margins. Still, despite the lack of revenue at this time, the fact that Germany has legalized cannabis is huge. With Germany legalizing cannabis, it may very well be that other countries in the EU could do the same enabling the bigger US MSOs the opportunity to expand into the second biggest economy in the world. Keep in mind how important Germany is: California has only 39M people in the state. Germany easily eclipses California as the biggest sovereignty in the world. Any US MSO wanting to be a world dominant player will be gearing up to get in to Germany. It may very well be that IMCC gets acquired simply because this would be an easy route into this country, and simultaneously give the acquiring company access to Israel and Canada.
Planet 13 Holdings PLNHF stock is one of my Top Picks - Best Marijuana Stocks To Buy Now. There is a lot I like about this company and, I see continued capabilities with increases in this company’s revenue. For now, they are really starting spend money on SG&A, Sales, General & Administrative. That “Sales” part is what the focus is. Nevada operations are effectively running at 100% with the dispensary. You have to understand the concept to appreciate the capabilities of Planet 13 Holdings. The dispensaries are mega-stores. These are destination-style dispensaries. When you consider that, having a mega dispensary, destination style store in Las Vegas makes a ton of sense. But, Planet 13 needs to solidify their presence. During COVID 19 lockdowns, the state of Nevada was crimped to some of the harshest capacities possible. During that time, Planet 13 improvised the game plan and extended offers to the local population in order to grow a foundation of business. This sustained Planet 13 through the dreary times. Now, management is focusing on drawing in the Las Vegas tourists. This will take time, effort, and money. You can see this play out in the operating costs. But, you can also see the efforts gain results with the increase in revenues. Two things to look for with Planet 13 that I want to mention: The Chicago, Illinois store should open on time over the course of its build-out, adding to greater potential longterm for Planet 13; and, Future guidance from analysts have next year’s revenues at $0.12 EPS.
Hollister Biosciences HSTRF stock is a stock that could easily be in my Top Picks of Best Marijuana Stocks to Buy Now. This is a stock that could easily be much higher in price. But, this is just the beginning. I got a question posed to me in the newly launched forum regarding the fact that Hollister Biosciences is in the process of insourcing all of its production. By doing this, Hollister Biosciences has the potential to increase its gross margins since they will not be producing its own products. This will be far more cost-effective and profitable. Already, Hollister Biosciences holds the distinction of being the most efficient of all of the cannabis stocks I monitor from an operating cost perspective with 8.1%. The very best companies usually print at roughly 30% - 35%. Being in the single digits is beyond remarkable with this metric and, Hollister Biosciences has been in this neighborhood for several quarters. A subscriber to this sight, William, asked if there would be any changes to this specific metric should Hollister Biosciences start insourcing production. The short answer to that is no. Production fo product usually falls in the gross revenue & profits section of the revenue statement, so therefore, operating costs would not necessarily decline.
MariMed MRMD Stock is poised to continuously increase in value. MariMed has the #1 selling edible product - Betty's Eddies - in several states and they are expanding in even more states. MariMed's Q2 numbers were extraordinary; yet, they are not necessarily the best performing. They are in Illinois and one of the things that MariMed is working towards is going fully vertical. Their current strategy of licensing their products prior to entering a new state and then building into that state is solidly increasing their revenues - thanks in part to their excellent product line. Going fully vertical will enable MariMed to take complete control of its direction. I am very bullish on MariMed; MRMD is one of my Top Picks - One of the Best Marijuana Stocks to buy now. If they continue to move into new markets and expand in their existing markets then, this is a company that will continue to grow and move higher. For now, the stock appears to be immune to the selling we have seen in pot stocks.