Leviathan Natural Products LVCNF Stock Forecast & Analysis

Leviathan Natural Products LVCNF stock has operations in Ontario Canada, the United States, & most recently Colombia.  Still, cannabis federal legalization will have an effect on LVCNF stock and I wanted to provide input on that.  They are in the process of finishing the acquisition of 10 dispensaries in the Ontario area, with 5 more dispensaries in the works.  They will then look to open a total of 75 dispensaries in Ontario Province.  The acquisition of 10 dispensaries is one of the main reasons I wanted to look at Leviathan.  When you look at the current financial data, Leviathan Natural Products is just getting started.  When the acquisition is complete, Leviathan Natural Products will see significant increases to its financial data.

Two things about this are the reason I wanted to cover this stock:

• Quebec
• 10 new dispensaries

Quebec is a bit of an anomaly with Canadian cannabis.  They require that 100% of the cannabis sold in Quebec be grown and processed in Quebec.  While that would be unconstitutional in the United States, Canadians seem to let Quebec do its thing. This could be a bonus because any company wanting to have operations completely throughout Canada could consider Leviathan Natural Products an opportunity.  With what will be 15 dispensaries fairly soon, and an increase to 75, this would be a significantly-sized dispensary system.  And, while the Leviathan focuses CBD products, Tirthankar Entities, which has its dispensaries as T Cannabis, they sell TCH products also.

Please Note: No video analysis at this time

Leviathan Natural Products Company Comparison

Normally, I would put together comparisons for Leviathan versus other companies in the Complete List of Top 100 Cannabis Companies.  However, there is going to be significant changes to the financials as soon as the latest acquisition deal is set to go.

Leviathan Natural Products Financial Data

Here is a breakdown of Leviathan Natural Products Q3 financial data.  For a full breakdown of Leviathan Natural Products LVCNF stock numbers.

Leviathan Natural Products Gross Profits

Here’s my best guess with revenue first: These dispensaries are likely generating revenue of approximately $100K each per month which, with 10 dispensaries, that equates to $1M monthly; $3M per quarter.  Honestly, I believe this number is very low.  Still, that is a starting point.  If gross margins can hit about 50% off of the 10 dispensaries, that is ~$500K in gross profits.  That is about $2M in gross profits annually.  Again, I believe my numbers are very low, however.

Leviathan Natural Products Operating Profits

Operating profits are another thing that would be difficult to measure without enough information.  If, again, there is an approximation of 50% in operating costs relative to revenue, that eats up 100% of the revenue between cost of goods & operating costs.

Given this, the combined companies may start out near break-even with EBTIDA; a good starting point.

Moving forward, however, there are likely to be efficiencies between the two merged companies and cost savings will start to show up as soon as 6-12 months.  These savings for Leviathan Natural Products will trickle down to the bottom line.

Leviathan Natural Products EBTIDA & Net Profits

I imagine that the combined companies are likely to start at EBTIDA break-even to start.  But, I have no real information on this.  This analysis is merely the beginning of my looking at Leviathan.

Leviathan Natural Products Cash On Hand

There is a new deal in place to bring in more cash for Leviathan.  They are using both cash & stock for this acquisition.  This will be needed and there is plenty of room for an increase in cash on hand.

Leviathan Natural Products Total Equity

Interestingly, Leviathan is upside down with equity; they have more debts than assets.  But, that is about to change with the acquisition and infusion of cash.  And, with 10 dispensaries, there is likely to be a big increase in assets over debts.

Leviathan Natural Products LVCNF Stock Forecast

Normally, I do a Discounted Cash Flow Statement when I do a projection.  This is difficult with Leviathan simply because they are not EBITDA profitable and, they will be bringing on 10 new dispensaries which will likely add some $1M per month, at a minimum, of revenue.  We do not have the data on Tirthankar yet.

Is Leviathan Natural Products LVCNF Stock A Good Investment?

A couple of things stand out to me.  First, there is some cash in the deal, cash infusion, and stock swap for the deal.  Stock swaps are non-dilutional because you are renaming one share to another name.  And, there are 10 dispensaries (Soon to be 15) as assets for the company.

Any moves adversely from the deal will have already been made in the market.  I believe that you are probably seeing the bottom of the stock with a lot of upside momentum being driven by cannabis stocks being energized from Federal Legalization in the United States as well as Cannabis Cures Covid.

The plan for Leviathan is to increase their dispensaries to 75 in a major province in Canada.  The expected costs to open the dispensaries will come in around $200K.  But, with that many dispensaries, and with the company producing its own products, processing, and selling, they will be able to have full control over costs and margins.  With that many dispensaries, this could become a cash-cow opportunity.

Leviathan Natural Products Financial Data

Here are the latest financial documents for Leviathan Natural Products.

Leviathan Natural Products LVCNF Stock Financial Data