Lowell Farms LOWLF Stock Forecast Forecast & Analysis

Lowell Farms LOWLF Stock is a stock that believe is one of the most undervalued cannabis stocks.  What was once a $10.00 stock is now a fraction of this price at a mere $0.30 per share.  But, I believe the intrinsic value hidden in this cannabis investment will eventually be there.  Putting together the LOWLF stock forecast has me looking in to the future for the stock and what is possible.  But, the biggest possibility is the Ascend Wellness AAWH stock licensing deal where Ascend will be producing & distributing Lowell Farms’ products throughout their dispensaries.  So, when you consider Lowell Farms as one of your cannabis investments, you also need to consider its partnerships.

Lowell Farms’ numbers missed again, however.  Revenues were expected to reach $16.5M but,  Lowell only printed about $15M.  For 2022, expectations are that more capacity will kick in and Lowell Farms will get closer to its potential.  In 2023, revenues are expected to move to above $25M per quarter on average.  However, with the Ascend Wellness deal, I am thinking there will be far greater upside with revenue potential.

In the meantime, Lowell Farms has greatly improved its financial position with shrinking its liabilities.  Because of that, equity has surged. This will be the future engine of revenue growth.

Lowell Farms Video Analysis From December 2021:

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Lowell Farms & Wholesale Cannabis in California

There has been a complete collapse of wholesale cannabis in California. That is good news if you are a company that buys wholesale and produces your product with that, then dispenses it across the state.  But, for the producers of wholesale flower and THC products, the impact is enormous and hits the bottom line across the state of many small players.

Wholesale prices range from state to state and generally range between $1,500 – $2,500 per pound. But, in California, there are some prices that are ranging between $200-$500; down from $800-$1,000 a year ago. Ouch. And with light-deprivation crops, prices are down to $600-$800 from about $1,500 the previous year.

Lowell Farms states they are approaching a cost price point of about $165-$200 from their greenhouse. So, that will keep them competitive. But, despite the ability to produce at such a great rate, there are likely double current supply levels than what the market can bear. So, this is likely going to be a long-term issue.

Premium Products & licensing

Lowell does not necessarily depend on wholesale product production. Lowell produces its own premium branding and that product development and revenue are continually improving. For the California market, Lowell will see continued increases in revenues and the shortfall from the wholesale drop will be made up from the higher margin-producing product of Lowell’s premium products

But, what I am also focusing on is the premium product licensing that has been going on over the past months. Lowell is licensing out its premium brand to Ascend who will grow, process, and distribute the Lowell brand throughout Mass & Illinois. To date, Ascend is having trouble producing enough products at optimal levels to keep up with demand. Good news, if you ask me.

Lowell will be working with Ascend in guiding them to produce at more optimal levels and with high volumes. The end result is that with almost no effort, Lowell Farms will be seeing increased revenues which will almost be entirely profits. From there, I expect more licensing in more states to capitalize across the nation on one of the best brands on the market with little up-front capital expenditures and almost pure cash flow thereafter.

Lowell Farms Financial Data

Lowell Farms Gross Profits

  • Lowell Farms Revenue
    Lowell Farms Revenue

Revenues will move higher as assets are increasing at a far bigger rate than liabilities, especially as Lowell has just paid down liabilities.  Plus, with Ascend deal, there will be increasing revenues from the licensing deal.  And, there will be minimal costs from sales & marketing.  This is what makes the deal such a winning deal as these licensing deals work themselves out.

Ascend will be able to produce more products in its production facilities optimizing its costs.  Then, these products are sold in Ascends’ dispensaries.  Lowell will benefit greatly from this; it is pure cash flow.  So, this should start to show up in revenues.

In the meantime, when Lowell can start create increasing revenues from sales inside California is going to be an important deal for them. Lowell Farm’s reliance on wholesale is going to have to move toward more of its premium production.

This is how cost of goods will drop along with the increase in revenues.

Lowell Farms Operating Profits

  • Lowell Farms Revenue
    Lowell Farms Revenue

Lowell has done a fairly solid job of maintaining its operating costs at lower levels. But, on a percentage basis, given the drop in revenue, obviously there was an increase in the operating efficiency metric as it is simple mathematics.

Had there been an increase of ~10% on revenue for the quarter and Lowell printed its $7M in operating costs this would have been 41% efficiency. This is elevated from where Lowell could be. But, with the increased costs revenues will increase from higher licensing sales and premium branding sales in California.

Lowell Farms EBITDA & Net Profits

  • Lowell Farms EBTIDA
    Lowell Farms EBTIDA

Because of the drop in wholesale prices, and the subsequent drop in revenue to Lowell, EBITDA took a hit dropping from mere break-even to -53% of revenue.

I will continually iterate that the premium branding will continually provide the revenue and bottom line the company is seeking. The augmentation of wholesale as a revenue generator will be an added plus. And, with the licensing agreements for the premium branding, the continual building up of the branding will get Lowell to increase revenues on a consistent basis. And, with that, margins will improve.

Lowell Farms Cash On Hand

  • Lowell Farms Cash on Hand
    Lowell Farms Cash on Hand

On a debt ratio basis, Lowell is sitting far better than it was just last quarter as they have paid down debt.  This has driven the cash debt ratio upwards one of the more solid levels in the sector.  This foundation puts Lowell Farms in a far more strategic position moving forward and this will give them a much better opportunity to build its position in the industry.

Lowell Farms Total Equity

  • Lowell Farms Total Assets
    Lowell Farms Total Assets

With the debt paid down, total equity has doubled moving from approximately $61M to $112M.   With increasing assets, this will allow Lowell to push forward with increasing revenue.  Equity is the difference between assets & liabilities.  If a company can drive its assets. up higher, while simultaneously keeping a lid on liabilities, the added assets, or equity, is what gives a company the ability to create revenue and push profits upward.

The big jump in assets is something I am keying in on.  This is important and will drive the future of the company.

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Lowell Farms LOWLF Stock Forecast

Lowell Farms LOWLF Stock Forecast DCF

LOWLF stock was once a $10.00 stock and I believe in the future the stock will get back above that price and far beyond.  With licensing deals, Lowell does none of the work but, Ascend will distribute the product after production.  So, this is pure cash flow to Lowell.  And, once Lowell gets its metrics lined up with its own product base in California, there is an even bigger potential drive for LOWLF stock.

Is Lowell Farms LOWLF Stock a Good Investment?

Lowell Farms LOWLF stock Forum & Discussion Message Board: Image showing LOWLF stock before financial release

Look towards the future.  Then, when you look at LOWLF stock and the current price you see a solid opportunity.  The longterm prospects of the cash flow from Ascend Wellness deal as well as ramping up the quality product in California.

The shakeout in California cannabis of wholesale prices will eventually benefit Lowell Farms.  Given the potential of licensing one of the top-rated cannabis products will spread throughout the US and continue to add in income for Lowell with little input costs.  So, the eventuality is that Lowell’s premium brand will contribute to bottom line in California.  And, with time, the wholesale prices will shift.

Even still, Lowell is already producing its wholesale products at profitable levels.  And, this will beat out the competition and the shakeout will inevitably lead to more California firms tapping out.  Lowell has access to financial markets in ways that other smaller competitors do not have.  Plus, the licensing of premium products will be a main driving factor for profits in the future.

When you look at Lowell Farms you need to look at the bigger picture.  Once you do that, looking at the recent sell off, you see a solid opportunity to grab a longterm holding at very low ratios to future earnings.  And, his will be a stock that eventually eclipses $4.00 giving n investor a 10x return.  Plus, given enough time, LOWELF stock will push beyond $40.00 making this a 100x stock to hold for longterm investment.

Lowell Farms Financial Data

Lowell Farms LOWLF Stock Financial Statements

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28 thoughts on “Lowell Farms LOWLF Stock Forecast Forecast & Analysis

  1. As i watched the stock drop a little again today, ugh, i went back and replayed the video,  such good information.  Hanging on to this stock.  Again,  Thanks for the work put into your videos.

  2. @cannabis-investing Agreed.  Bringing that one person on board was a telling sign of a potential future.  If nothing more, that individual will want to drive management to “clean up the books”.  So, expect big things with that.  

    I do not see Lowell being in a position to actually go out and acquire others.  So, logically, they are looking to get acquired.  There’s usually premium there.

  3. Lowell farms popped up over 21% today.
    The way its going up would normally think something is going on just like RWBYF did, then pharmco deal closed. But I am seeing a lot of tight strings so to speak, and twaaang, share prices pop up quickly on some of these massively undervalued cannabis penny stocks.
    FFNTF has been doing huge pops, and huge pull backs, so have many others.
    I think Lowell farms is one to watch! It could easily jump up over $1 in minutes. The fact they have a M&A expert IMHO makes it very interesting. Of course it could always go down just as quickly.

  4. I think I like a lot better the ticker LVCNF – Leviathan Natural Products Inc instead.. 
    I think this company will grow a lot faster than Lowell Farms.

    1. @FLSharkvictim

      LVCNF stock is up nearly 100% since January.  But, Leviathan Natural Products still needs to improve some metrics with margins & profits.  Still, they are leading the way.

  5. On Friday the 13th the California Governor unveiled a budget proposal to eliminate the cannabis cultivation tax and revamp cannabis revenues to fight the black market. That explains why Lowell farms and Glass house were up over 20% that day.

  6. POLITICSCalifornia Governor Proposes Marijuana Tax Cuts To Combat Illicit MarketPublished 23 hours ago on May 13, 2022 By Kyle Jaeger
    The governor of California unveiled an updated budget proposal on Friday that calls for the elimination of the state’s marijuana cultivation tax and revised cannabis tax revenue allocations.
    Gov. Gavin Newsom’s (D) May revised budget would take steps intended to combat the illicit market and make the legal industry more competitive, in large part by zeroing out the cultivation tax that marijuana businesses currently incur.
    It’s a move that stakeholders have been pushing for, especially as businesses have struggled to keep up with rising inflation and reduced demand compared to peak coronavirus pandemic levels. The governor emphasized on Friday that he was specifically committed to exploring ways to minimize the influence of illicit growers and sellers on undercutting legal, licensed businesses.
    And while one might assume that removing the cultivation tax would hamper revenue streams for the state, a recent analysis from the Reason Foundation actually found that monthly tax revenue would increase by 123 percent by 2024 if the policy change was enacted.
    The report said that ending the cultivation tax would mean lower costs for consumers and, therefore, increased legal purchases that would more than offset any revenue losses over time.
    Newsom’s proposal on its own isn’t binding, however. It would need to pass the legislature with at least a two-thirds majority in order to be implemented.
    “We’ve been working very closely with legislative leaders, and we’ve made tremendous progress,” the governor said at a briefing on Friday. “We haven’t finalized any of that, so I want to be careful not to disrupt that progress.”
    Sam Rodriguez, policy director for the cannabis farmers advocacy group Good Farmers Great Neighbors, praised Newsom’s move in a statement to Marijuana Moment.
    “California farmers are pleased that the governor has taken a leadership role in addressing the ills of the illicit market with a starting point on tax relief,” he said. “We look forward in working the legislative budgetary process to obtain more tax relief necessary to stabilize the supply chain. The legal market in our state needs a real bootstrap approach from our state. Anything less will potentially devastate the newly created cannabis economy. And that would be a travesty.”
    The governor’s revised budget proposal also includes updated estimates on tax revenue allocations for the 2022-23 fiscal year.
    The state is expecting to distribute $401.8 million for education, youth substance misuse treatment and school retention; $133.9 million for environmental clean-up and remediation related to illicit cannabis manufacturing and $133.9 million for law enforcement purposes.
    “These figures reflect a total increase of $74.7 million compared to the Governor’s Budget estimate,” the revised budget summary says. “These estimates also reflect the proposed statutory changes to restructure the cannabis tax framework and maintain a baseline level of funding for this allocation.”
    Separately, the governor’s plan would involve shifting “the point of collection and remittance for excise tax from distribution to retail on January 1, 2023,” while maintaining the 15 percent excise tax rate on marijuana sales.
    The budget further calls for the creation of a one-time “cannabis local jurisdiction retail access grant program” to support the development and implementation of local retail licensing efforts. The $20.5 million for that program would come out of the state general fund. Localities that license equity applicants could receive additional funding.
    Newsom said the goal of the initiative is “addressing the persistent issue that is exactly what we anticipated would be a persistent issue—and that’s dealing with the black market, going after the illegal growers and the illegal operators.”
     
    “This is beginning of a process,” he said. “From my humble perspective, in terms of my thinking, this will be a multi-year process to get that black market, get it on the retreat—not the ascendancy—and to get the retail and responsible adult-use market on steady ground.”
    Nicole Elliott, director of the Department of Cannabis Control, said that the budget’s cannabis provisions would “remove unnecessary administrative burdens and costs.”
    “We have heard from many of you who have said that the current cannabis tax framework is overly complex,” she wrote in an email to industry stakeholders. “We know that current tax policies disproportionately burden cannabis farmers and small businesses and create instability throughout the supply chain, ultimately undermining the societal benefits of a taxed and regulated market.”
    Meanwhile, California officials announced in January that the state had awarded $100 million in funding to help develop local marijuana markets, in part by getting cannabis businesses fully licensed.
    The state Department of Cannabis Control (DCC) distributed the funds to 17 cities and counties where there are a disproportionate number of provisional marijuana licenses, rather than full-year licenses. The department first announced that applications for the Local Jurisdiction Assistance Grant Program had opened in October.
    Also last year, the state said it was awarding about $29 million in grants to 58 nonprofit organizations, with the intent of righting the wrongs of the war on drugs. The funding is being provided through the California Community Reinvestment Grants (CalCRG) program.
    Grants are being awarded to qualifying nonprofits to support programs aimed at providing job placement, mental health treatment, substance misuse treatment and legal services for disproportionately impacted communities. The program was first announced in April 2020, and applications for those grants were initially opened in September 2020.
    Officials with the California Department of Fish and Wildlife also said last year that they were soliciting concept proposals for a cannabis tax-funded program aimed at helping small marijuana cultivators with environmental clean-up and restoration efforts.
    here 
     

  7. @mattpaul02yahoo-com

    I wonder how far this could go to drive down cost of goods with this manufacturing products?  And, I wonder if they, Lowell, will be doing white label for other companies in house?

  8. @dhtaylor – After doing a lot of research from your videos and reading through Simple Wall Street that I also belong to as well. I have dumped my entire position last night and Green Organic Dutchman Holdings and Clever Leaves Holdings Inc… My plan is to diversify it into LOWLF & SHWZ…
     
     

  9. @mattpaul02yahoo-com

    Hey Matt… so, I really think that Green Organic Dutchman will get there.  They are on a steady-as-you-go pace.  However, Lowell looks like it could really take off. The fact that the stock is so beaten down, and with so many other factors that may propel cannabis stocks, I think this is one that will really take off.  And, Schwazze?  That is a stock that will get acquired by another at some point.  No idea who.  Maybe Trulieve or TerrAscend?  We’ll see.  

  10. There is an eye opening presentation by George Allen from Lowell farms at the virtual investors conference where he talks about their recent pre roll automation and upcoming strategies including the rollout of their new product line, Lowell 35’s. He calls them transformative for not only the company but the industry. I tried to put up the link but could not get it to work. can probably get there by googling virtual investors conference. It’s a half hour long but certainly worth it.As well on the Q1 conference call they were saying that many Cannabis growers in California have only temporary processing licences and that on April 1 2023 temporary licenses will be suspended and companies will be required to have permanent licenses which could require expensive upgrades to bring the facilities up to code. Those companies that are unable to do that will need to use a third party processor like Lowell farm services and Lowell anticipates this to be a significant catalyst for LFS. They said they are already signing up customers.This event entered into their decision to invest in their processing facility and by being proactive they have created another revenue stream and along with their upcoming licensing deal with Schwazze, the possibility of tax breaks at the state level and their new product rollout there are a number of things coming that could trigger an increase in the stock aside from legalization. These guys are so innovative they make their own catalysts.There’s some pretty smart farmers down at Lowell IMHO
     
     

  11. I wonder if they are automated like Lowell will be.A according to Lowell their automation system is the first in the U.S. I think they said they got the Idea from a Canadian company called Redecan which is now owned by Hexo.

    1. For me, the stand out is all of the licensing deals with other companies that Lowell has. This will really accelerate earnings with little input from Lowell except per unit costs that Lowell will be able to buy bigger bulk on packaging materials

  12. I’ve heard that too everyone seems to love the packaging. It is very eye-catching. Their new product Lowell 35’s comes in six different colours of packaging and they were talking on one of the conferences about how they can design new packaging in house and have it ready very quickly for special occasion or limited edition events.

  13. Pi Financial just came out with this , it wouldnt let me attach the pdf
    Lowell Farms Inc. (CSE-LOWL)Price (last): C$0.29      Price Target: C$1.10Rating: Buy52-week High/Low: C$1.72/C$0.25Shares Out. (basic): 100.5MShares Out. (fd): 280.8MMarket Cap: C$28MRisk: SPECULATIVEReturn: 286.0%   Shazam Cash: C$5.9MDebt: C$47.6M

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