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Lowell announces second qrt results

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Q Canna
(@aconceptsketchgmail-com)
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Joined: 5 months ago
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09/26 Monday a discussion on interstate commerce , a boon for Lowell if it happens
https://twitter.com/HedgeyeCannabis/status/1572661342284435456


   
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D. H. Taylor
(@dhtaylor)
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@aconceptsketchgmail-com This could be interesting.  I've often wondered... and, been asked about, interstate commerce and how it will affect cannabis companies' costs.  Think about Lowell being able to ship across the country?  Outdoor grown California cannabis is supposed to be some of the most sought-after product there is.  But, what does that do to the New Jersey producers?  

Could be interesting.  


   
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Q Canna
(@aconceptsketchgmail-com)
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Joined: 5 months ago
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205
 

After hired engineers failed to produce a machine equal to the task, Allen learned about a Canadian cannabis company with a version very much like the one he imagined. So he did the sensible thing and bought the firm. In short order, the machine was producing as many as 150,000 joints daily (compared to 10,000 using the Knockbox). And there’s more capability on the horizon: “By the end of next year we will have eight machines doing 1.2 million sticks per day.”

Lets do the math 1.2 mil divided by 10 is 120,000 packs per day time aprox 10 to 11 bucks wholesale or 20 retail thats 1.2 mil revenue daily for Lowell of which 50 % is profit...Its staggering

 

   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205

   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205

   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205
 

Q 3 reports tonight @5:30 est

For Q3, the company three months ago had been expected to generate revenue of $17 million with adjusted EBITDA of $1 million. Now, analysts project revenue will increase 1% to $13 million. Adjusted EBITDA is projected to be -$1 million.

In Q2, the company had been expected to generate revenue of $15 million with adjusted EBITDA at breakeven. It reported revenue of $13.2 million, down 13% from a year ago and up 6% sequentially. Adjusted EBITDA was similar to Q1 at -$1.1 million. Cash flow from operations was -$2.5 million and has been -$3.4 million year-to-date.

CPG revenue was $7.4 million, down 23%, and bulk sales fell 37% to $3.4 million. Its new business, Lowell Farm Services, added $2.0 million, and relatively new licensing grew from just $14K a year ago to $274K.

During Q4, the analysts are looking for sales to increase 11% to $17 million. Adjusted EBITDA is projected to be -$1 million.

In 2022, two analysts project revenue will grow just 2% to $55 million with adjusted EBITDA of -$2 million. Three months ago, they were expecting revenue of $64 million and adjusted EBITDA of $5 million.

For 2023, they expect revenue to lift 25% to $68 million with adjusted EBITDA of $5 million. Three months ago, they projected $81 million in revenue and adjusted EBITDA of $16 million.

The stock is down 81% since two days before it reported its Q3 a year ago, I like their licensing strategy with Ascend and with Schwazze in a total of six states. The company has some convertible debt , but  it will be likely be converted .

At $0.18, the market cap is just $20 million. This is just below 1 times book value.

There is no outlook provided by analysts for beyond 2023, but lets  assume that revenue will increase 21% in 2024 to $82 million , an EBITDA of $12 million, a 14.6% margin. If its stays the same for year-end 2023 is 1X projected 2024 revenue. This is $0.58, of course there are additional shres due to warrants etc to look out for

 

   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
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This may be Lowell's only hope ,Interstate Commerce

Copied from Linked-in

The Dormant Commerce Clause

If you are in the cannabis industry and you have not tuned in to this turn of phrase, or its current rumblings underfoot, then now would be a good time to acquaint yourself.

In a nutshell: 1. The Commerce Clause is Article I, Section 8, Clause 3 of the Constitution, and it states in relevant part that the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes" is an enumerated power of the federal government (specifically Congress).

2. The second element of the Commerce Clause - "among the several States" - is referred to as the Interstate Commerce Clause, and it is from this enumerated power that the federal government derives much of its control over daily life in the country.

3. The Dormant Commerce Clause, boiled down to its essence, is a legal doctrine inferred from the Commerce Clause which bars state protectionism. In effect, the Commerce Clause is "dormant" until a state tries to do something to protect a state interest that impacts interstate commerce. See where we're going with this?

4. There has been a significant, on-point case related to the Dormant Commerce Clause in the cannabis industry in the United States Court of Appeals for the First Circuit (Maine, Massachusetts, New Hampshire, Rhode Island, Puerto Rico). Maine had a residency requirement to get a medical cannabis license. The state was sued over this requirement, and as of August 2022, both the District Court and First Circuit found the requirement to be unconstitutional. https://lnkd.in/e8UsjtWY

5. With the first blow against state protectionism in cannabis regulations in the books, the big kahuna is coming down the pipe. On October 11, 2022, oral arguments were heard at the Supreme Court in the case National Pork v Ross. In 2018, California voters passed Proposition 12 which prohibits the sale of pork in the state from pigs not raised in compliance with California's standards, and the pork industry sued citing the Dormant Commerce Clause. The judicial history of the case is worth reviewing - the District Court dismissed the lawsuit as not plausibly alleging any constitutional violation, and the Ninth Circuit affirmed that decision. The fact that the Supreme Court agreed to take the case, and the current propensity of the Court's six member majority, makes it reasonably unlikely that they are just going to agree with the lower courts. https://lnkd.in/eXvJW8uR

6. So if the Court rules that the Dormant Commerce Clause continues to reign over the land, look for a lot of turbulence in any state's cannabis regulatory scheme that is unduly protectionist. It is actually such protectionist legislation in each cannabis-legal state which currently prevents cannabis from coming into that state's regulated cannabis market from out of state, so this could be one of many changes that come about after the Supremes rule.


   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205
 

Q3'22 EC
• GA: we've seen a continuing decay in retail demand, coupled with a general lack of health among retailers. In May of last year, sales across state according to headset are down 16%, led by a 19% decline in flower sales, the largest sales category. What's more surprising is that unit volume over this period is down 2%, meaning that the decline in prices has not created any demand response from the consumer. There's two possible explanations for this, either we're seeing a decline in cannabis consumption or there is a secular shift into an alternative purchase channel, namely the legacy or illicit market. We suspect the latter
o retailers are struggling to pay their bills
o we see a concerted effort from retailers to raise their markups in an attempt to make up for decline in traffic. And while we cannot be sure, we fear that this is further driving consumers into alternative channels
o we continue our efforts to raise capital and we are in discussions with several interest parties. We have also decided to commission a strategic alternatives committee at the Board to initiate a review in light of acquisition interest in the business [...] given the current market environment and our liquidity
o In general, we have fought very, very hard not to follow the market downward on price as we have found that the detrimental impact to margin is generally not recoverable with increases in volume. We have also learned that price decreases are never a two-way street.
o The bulk market continues to show weakness heading into the final quarter as pricing pressures accelerated relative to the trends we witnessed between Q1 and Q2
o we witnessed a 20% decline in our realized price per pound quarter-on-quarter
。 I think the supply side is it's pretty darn obvious that there's too many suppliers on product, over-capacity. The cultivation on its very basic level, it's oversubscribed in the state. And what you think we've always seen in cannabis is a very slow response cycle. I mean good oil well, people turn off the oil well, if it's below the marginal cost of production, cannabis is different because there's a lot of people who make up the cannabis industry who aren't necessarily well positioned to reenter the job market elsewhere, so -- or well inclined. So, I think there's a delay factor there that happens. And so, I think the only possible answer is we're going to have to see supply fall away. I do think there's some demand drivers that I think most of the demand increases we'll see come from the fact that product is more -- moving more and more across the country with relative fluidity in California continuously. I can't substantiate at all, but I'm quite certain that some of the sales softness we've seen across the country in cannabis operations is due to the fact that there's just -- there's just a massive amount of inexpensive cannabis coming out of California that's running us out of market. So, I think on that side, it's pretty obvious we need a supply some sort of supply correction. On the retail side, I also think you've got some challenges there. And to be honest with you, the biggest problem we have in last mile fulfillment is around 280 because 280E forces all the operators to mark the product up so excessively high, that it leaves a huge amount of opportunity for retailers, or for the illicit market, to come in underneath


   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205
 

Life saver for Lowell , this is a 1st to my knowledge many more to come then interstate commerce
https://www.marijuanamoment.net/oregon-marijuana-company-files-federal-lawsuit-against-state-over-unconstitutional-cannabis-export-ban/


   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205

   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205

   
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Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205

   
ReplyQuote
Q Canna
(@aconceptsketchgmail-com)
Estimable Member
Joined: 5 months ago
Posts: 205

   
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