Schwazze SHWZ stock is a cannabis stock that will light up the board when cannabis stocks take off. And, SHWZ is on of the best cannabis stocks – My Top pIcks. I wanted to solidify the SHWZ stock forecast because the company has expanded so much, so rapidly over the past several months. Right now, Schwazze has some 29 dispensaries but, they should close on an additional 10 more this year. That being said, the SHWZ stock forecast will be obsolete immediately as more revenue potential shows up quickly.
I will continue to update SHWZ stock forecast as the quarters progress; something I have been getting far more efficient at over the past few weeks and months. That being said, I want to reiterate that these models are exactly that, models. Investing is also a popularity contest. And, just as equally that cannabis stocks can be unpopular and undervalued, very soon I expect that these same cannabis stocks will be over-popular and over valued. Do the math accordingly with the SHWZ stock forecast.
Now, let’s dig into even more big opportunities:
Another of my Top Picks is Lowell Farms LOWLF stock. Lowell finds themselves with a new strategic partnership where Shwazze will be selling Lowell Farms products in their dispensaries. Schwazze will grow, process, and sell Lowell Farms pre-rolls. This is big for both Schwazze and Lowell Farms as Lowell puts out an excellent product.
The thing with Lowell Farms is that it has such a huge social media presence. The way you get a big social media presence is that a lot of people talk about your products. I am not one who looks to product quality or my likes or dislikes because what I like may not be an effective product to sell. I let the dollar votes take care of that side of the business. If the masses like a product, that tells me that a lot of people have “voted” and the product will ultimately be a success versus other products.
That being said, Lowell will be big from this. Lowell Farms also has a deal whereupon Ascend Wellness AAWH stock, sells Lowell products in its dispensaries and, without lifting much of a finger, Lowell Farms continues to get a cut of the profits. Lowell will likely continue to do what it does exceptionally well… social media marketing, of course.
These types of deals benefit in many ways and the fact that branding and marketing are taken care of by Lowell. And, both Schwazze & Ascend Wellness get a top-quality brand that they can sell in their stores. And, production of this is done inside facilities that are already licensed. Capacity utilization increases for Schwazze & Ascend Wellness, and that means better margins for both of these companies.
And… that could lead into an interesting M&A deal into the future.
SHWZ Stock as an Acquisition Target
Shwazze has done an absolute bonanza of M&A activity the past year; 2021. I expect that pace will continue. Schwazze is now a regional MSO and one of the biggest if not the biggest in both Colorado & New Mexico. There are other deals that will follow through this year coming, and the pace looks dizzying.
I have said many times that there is going to be an absolute ton of M&A activity over the next several years in cannabis stocks. We continually see this. And, we also see strategic partnerships occur all of the time; Lowell Farms deal is one example.
That being said, I fully expect that Schwazze to continue with its M&A activity and I expect they will grow and develop along with that.
But, I also suspect that a far bigger player could easily step in and make them an offer they cannot refuse. What if, and this is purely hypothetical, what if Trulieve were to show up and decide they finally wanted to be in both Colorado & New Mexico? This is easy.
If not Trulieve, why not Ascend Wellness? Or, TerrAscend?
To give you an idea of how big I expect M&A activity to be in the next several years, I currently have 108 cannabis stocks that I follow on Cannabis Investing Newsletter. Within about 24-30 months, I can easily envision there being only about 75 left standing.
I can see M&A activity happening both ways with Schwazze. Investing in SHWZ stock should mean you both accept further growth and expansion with new acquisitions, as well as the possibility that someone very big steps in and acquires SHWZ stock.
Schwazze SHWZ Holdings Financial Data
Numbers were good for Schwazze and the company continues to grow. Expect that as the recent acquisitions and deals solidify you will see continued increases in revenues and big moves maybe up or down with margins and costs. But, ultimately, I think this is a company to be reckoned with.
Schwazze Gross Profits
While Schwazze printed record revenue for the quarter, the big gains lately were driven from M&A activity. We will see even more gains as the newly flipped to adult-use state of New Mexico will see increases in revenue at existing dispensaries. This is something I like to key in on because this is organic growth that existing dispensaries will receive without new input costs.
As for gross profits and gross margins, Schwazze needs to generate more profits from gross margins. But, if there is one thing I have learned after reviewing cannabis stocks for some time, growing excellent cannabis, inexpensively, and consistently is difficult. Still, other cannabis stocks have achieved this.
This becomes the slingshot that propels SHWZ stock. As Schwazze grows into its foundation, they will get better and better. If there is an increase in revenue of about 50% from organic growth at existing facilities, and Schwazze can improve gross margins at the same time by about 10%, this will drive profits. That, in turn, will drive SHWZ stock over the long term. So, look toward this metric as the rationale for what will help drive SHWZ stock. As gross margins increase, so will profits. That will attract more investors.
Schwazze Operating Profits
One of the things that I have been curious about is the State of Colorado. Colorado is one of the most mature, if not the most mature cannabis adult-use legal state there is. How much more growth will we see out of the state of Colorado? This is the one thing that I wonder because it really tells the story of what will happen in all of the other states over the next few years.
If there is enough continuous growth in Colorado, this will propel revenue higher for the cannabis companies in that state. That will enable the rationale for operating costs at the levels they are now. So, if companies can continue to grow in these more mature states, this will help push revenues. I am using this as a measuring stick for Schwazze; this is important.
It is important to note that there was a large surge in cannabis sales with COVID as bars were closed and people consumed cannabis at home. Bars are now reopening and we have seen revenue declines in cannabis sales across the board. Expect moderation and mellowing out of these numbers, but eventually, cannabis revenue sales will resume higher again, albeit at a slower pace.
Schwazze EBITDA & Net Profits
Profitability picture here for Schwazze will continually change as Schwazze evolves. There will be changes to the SHWZ share count with new acquisitions. I will be continually updating the SHWZ stock forecast as new developments move forward.
For now, the lower EBITDA/Revenue rate is likely to see moves back upward. I used. modest EBITDA/Revenue rate and increased this slightly every year with the SHWZ stock forecast below.
Schwazze Cash On Hand
One of the things I look toward with these growing and expanding companies is their capitalization and how well any one cannabis company is with cash on hand. Schwazze is expanding with new dispensaries being acquired. These M&A deals require cash to fund. Also, if Schwazze is taking on a cannabis company that is not profitable, cash will be needed to fund future operations. Schwazze has plenty of cash on hand, and they would have no problems accessing capital if there was a deal needed to be done which required more cash.
I look toward the new additions throughout this coming year to see what shape Schwazze will be in with margins and net earnings. The expansions are likely to add to the bottom line eventually. There are expansions where acquiring dispensaries throughout Colorado will enable exist labels to be sold in new dispensaries, expanding Schwazze’s foundation and driving SHWZ stock.
The long term buildup of what Schwazze is putting together will mean bigger revenue & profit potential down the road. An investor would need to look at Schwazze as a long term opportunity for a growth stock and value investment.
For now, Schwazze has plenty of cash on hand.
Schwazze Total Equity
I always look toward total equity as that metric that tells me if management is creating value for me. From previous acquisitions, there have been increases in total equity. But, increases in total equity that come from acquisitions from all-stock deals come at the expense of more shares. What we would be looking for are organic increases in total equity and they continuously move higher and higher with static share count.
Nonetheless, Schwazze is increasing its foundation and this will be supportive of future revenue and profits. Equity is what drives a company’s ability to create revenue, and by extension, profits.
Still, with as many deals in the future as Schwazze has, and with the industry expanding as it does, Schwazze is going to continue to grow and SHWZ stock will push higher over a very long period of time.
Schwazze SHWZ Stock Forecast
Schwazze SHWZ Stock DCF
The first thing I did with the SHWZ stock forecast was put together the revenue run-rate. I looked at several different analyst projections and they all seemed to target a certain amount over the next two years. I used a progressive approach.
Then, I took current margins and gradually increased them over the course of the next five years. Then, I lowered them because I felt the number came in too high.
But… and I stress this: Everything is obsolete. This is not a bad thing. This is owed to the fact that Shwazze is expanding and the new numbers will come in and I will need to make adjustments to the SHWZ stock forecast. I will do so as these metrics come in over the next few quarters.
But, this working model gives a solid foundations to work with in understanding where SHWZ stock could be.
Is Schwazze SHWZ Stock A Good Investment?
First, I obviously like SHWZ stock because this is a company that has tremendous upside potential. And, with the fact that a lot of cannabis stocks are beaten down so heavily, this is an opportunity to really take advantage from a long term perspective, as value investors.
If a value investor were to look at this company as an undervalued cannabis stock, that is also simultaneously a growth stock, getting involved in SHWZ stock at this level makes a tremendous amount of logic.
At the same time, the days of hyper-stock spikes in cannabis stocks are behind us. Don’t expect that to occur any time soon… except, that probably is not true, either. Cannabis Federal Legalization is just around the corner as the Senate version of this bill is likely to hit sometime soon. So, very likely, cannabis stocks will see a continued move upward very shortly.
Then, my expectation is that as cannabis companies start drifting toward up-listing on Nasdaq, this will draw in more and more investors with far bigger dollars, continually driving up and supporting cannabis stocks.
I see an investment in SHWZ stock as a long term opportunity for value investors looking for high growth stocks that are significantly undervalued.
104 thoughts on “Schwazze SHWZ Stock Forecast & Analysis”
Mj Biz article Featuring SHWZ pg 38 – 40
RS: I think “Survive and Advance” is a nice kind of guide for any cannabis company, right? It’s like these, these years of pain and then hopefully we’ll get some advancement.JB: Yes, I think so. And I think, I think it’s a, now is the time when that could come and it’s probably better than the phrase that I used on our last podcast, which I actually think you guys used for a title that I’ve gotten some beef for, is I think, I said the earnings results shouldn’t matter. And I think that people kind of thought I was being too flippant or something of that nature.But yes, I do think we’re still in a, some of these markets that Survive and Advance kind of characteristics. And but, I guess you can prove that there are ways to Survive and Advance and actually thrive in some challenging markets. You look at, amongst the kind of names that I’m frequently pushing, Schwazze is one that’s proving out right now that you could say that make the same case that Colorado is so challenged and Colorado is a hard market, and here’s a company that just threw good old fashioned boots on the ground. Execution is carving out a nice profit for themselves, generating money and doing well.And, ultimately will either expand; they have expanded in New Mexico, but ultimately will expand further and scale up or will be a takeout. And either way that’s a, probably presents a really interesting and solid outcome for investors in it. So, there is even in a state that’s very challenging, there is a pathway to kind of differentiate itself and then the other option is kind of that Survive and Advance mentality.
I kind of agree with some of these things. I also agree that I think Schwazze gets acquired by someone very big who would want to dominate Colorado & New Mexico. None of the big MSOs are really in these areas on a large scale. This is easy to see why SHWZ is a M&A target. This goes along with my broader thesis that there will be lots and lots of M&A activity and that the eventuality is that there is a lot of carving and merging. Eventually, the biggest will be left standing.
Schwazze is proving right now it can be done without being a huge MSO in a limited Lic MRKT , Colorado has way to many Lic out there and is a hard market, Its old school with good old fashioned boots on the ground. they are executing and creating a profit , Lowell could learn from Schwazze techniques and perhaps thats the better merger than another boring/ price share killing Bloated MSO taking over
I think this is the better approach, being the best in one area versus expending a tremendous amount of energy opening up in new markets all over the place. It is expensive to get into a new state with licensing. I get that cannabis companies want to be everywhere. But, being the absolute best in one location versus middle-ground in multiple areas seems counter-intuitive.
In the meantime, Schwazze needs to improve on its metrics a bit. Gross margins need to inch higher. They are almost there with operating efficiencies (one of the benefits of only being in one area). Then, as they gain even more market share in these areas their fixed costs get paid for more and more with increasing units sold at new dispensaries. This improves gross margins. Then, SHWZ is poised to be a leader; albeit from a smaller base.
Nice pop up in the chart this morning!
We need is some positive press …..Shwz is doing their part
Q 2 Revenue Increases to $44.3 Million
Adjusted EBITDA of $15 Million
9 million dollars PROFIT on Operations , seems to me they are doing great but no one talks about them?
Like many other reports and mso’s
Revised Guidance Driven by Short-Term, Challenging Colorado Market Conditions
Q4 2022 Projected Revenue Annualized Run Rate: $175 Million – $200 Million
Q4 2022 Projected Adjusted EBITDA Annualized Run Rate: $60 Million – $72 Million
IMPORTANT TO NOTE: Nancy Huber “Despite difficult market conditions in Colorado, which we believe to be transitory and temporary. ”
Q4 2022 Projected Revenue Annualized Run Rate of Approximately $220 Million – $260 Million
Q4 2022 Projected Adjusted EBITDA Annualized Run Rate of Approximately $70 Million – $82 Million
Q2 2022 Financial Summary:
Revenues of $44.3 million increased 44% compared to $30.7 million in second quarter ended June 30, 2021 (“Q2 2021”)
Retail sales were $38.1 million up 77% when compared to Q2 2021
Gross Margin of $25.2 million was up 69% compared to $14.9 million in Q2 2021, this quarter was affected by $0.2M in purchase accounting
Net Income was $33.8 million compared to a Net Income of $4.4 million for the same period last year
Adjusted EBITDA of $15 million was 33.9% of revenue, compared to $10 million for the same period last year
Colorado two year stacked IDs for Q2 2022 compared to Q2 2021 and Q2 2020 for same store sales(1) were 1.8% and one year IDs(1) were (12.7%) comparing Q2 2022 to Q2 2021
Average basket size (1) for Q2 2022 was $59.98 down 4.1% compared to Q2 2021
Recorded customer visits (1) for Q2 2022 totaled 444,771 down 8.9%, compared to Q2 2021
New Mexico two year stacked IDs for Q2 2022 compared to Q2 2021 and Q2 2020 for same store sales(1) were 41.0% and one year IDs(1) were 30.4% comparing Q2 2022 to Q2 2021
Average basket size (1) for Q2 2022 was $54.56 down 12.7% compared to Q2 2021
Recorded customer visits (1) for Q2 2022 totaled 209,591 up 49.4%, compared to Q2 2021
Since December 2021, Schwazze has closed acquisitions adding 15 cannabis dispensaries, 10 in New Mexico and five in Colorado as well as four cultivation facilities in New Mexico and one in Colorado and one manufacturing asset in New Mexico.
Closed Acquisition of Urban Health & Wellness Assets
Listed Common Stock on the NEO Exchange
Closed Acquisition of Brow 2 LLC Assets
Closed Acquisition of Emerald Fields
Added President of New Mexico Division
Closed New Mexico Acquisition, Becoming a Regionally Focused MSO
Added to Key Senior Leadership Team
Closed Acquisition of Drift Assets
Justin Dye, Chairman and CEO of Schwazze stated, “Similar to the rest of the country, the cannabis industry in Colorado is also experiencing a slowdown in growth compared to the last couple of years. Schwazze, however, is demonstrating that our regional strategy, built on a customer first approach, developing significant scale, building brands and leveraging data analytics and technology is not only sound but gaining momentum as demonstrated by revenue and unit sales growth, customer loyalty and by once again outpacing the legacy market growth by approximately 12%. We believe this model will travel well to other states as we find attractive opportunities. Despite share price weakness driven by broader market influences, we remain bullish on our business and have conviction that as Schwazze continues to deliver superior operating results that our shareholders will be rewarded.”
Justin continued, “As we look to the future, we expect continued growth in Colorado and New Mexico through both organic and inorganic means. Our operations continue to mature and gain momentum, and we firmly believe that we are winning in our markets. Our team will continue to focus on growing profitably and generating cash flow from operations. When positive federal legislation is passed, Schwazze will be well-positioned as a market leader to take advantage of banking services and institutional investment.”
Q2 2022 Revenue
Revenues for the three months ended June 30, 2022, totaled $44.3 million, including (i) retail sales of $38.1 million (ii) wholesale sales of $6.1 million and (iii) other operating revenues of $43,750, compared to revenues of $30.7 million, including (i) retail sales of $21.5 million, (ii) wholesale of $9.2 million, and (iii) other operating revenues of $16,844 during the three months ended June 30, 2021, representing an increase of $13.5 million or 44%. This increase was due to increased sale of our products as well as execution of our growth through acquisition initiatives. In the second quarter of 2022, the Company acquired one additional retail dispensary, which generated additional retail revenue. Additionally, recreational marijuana sales became legal in New Mexico in April 2022, which increased sales volume and revenues in New Mexico. Wholesale revenues in Colorado decreased due to increased cultivation capacity in the state resulting in an over-supply of wholesale cannabis materials.
Cost of goods and services for the three months ended June 30, 2022, totaled $19.1 million compared to cost of services of $15.8 million during the three months ended June 30, 2021, representing an increase of $3.3 million or 21%. The increase in cost of goods is driven by the increase in revenue, however not at the same rate. In the quarter, the Company experienced a reduction in costs driven by vertical integration and third-party price negotiations.
Gross profit increased to $25.2 million for Q2 2022 compared to $14.9 million during the same period in 2021. Gross profit margin increased as a percentage of revenue from 48.5% to 56.8%, and net of purchase accounting, the gross margin increased to 57.4%. This positive result, net of purchase accounting continues to reflect our consolidated purchasing approach, the implementation of our retail playbook, and vertical product sales in New Mexico.
Operating expenses for the three months ended June 30, 2022, totaled $16.1 million, compared to operating expenses of $10.5 million during the three months ended June 30, 2021, representing an increase of $5.6 million or 54%. This increase is due to increased selling, general and administrative expenses, professional service fees, salaries, benefits, and related employment costs driven by growth from acquisitions.
Other income for the three months ended June 30, 2022, totaled $29.2 million compared to $0.2 million during the three months ended June 30, 2021, representing an increase in income of $29 million or 18,435%. The increase in other income is due to the revaluation of the derivative liability related to the Investor Notes, offset by higher interest payments.
The Company generated net income for the three months ended June 30, 2022, of $33.8 million, compared to net income of $4.4 million for the three months ended June 30, 2021.
Adjusted EBITDA for Q2 2022 was $15 million representing 33.9% of revenue, compared to $10 million and 32.6% of revenue for the same period last year. This is derived from Operating Income and adjusting one-time expenses, merger and acquisition and capital raising costs, non-cash related compensation costs, and depreciation and amortization. See the financial table for Adjusted EBITDA below adjustment for details.
For six months ending June 30, 2022, the Company used cash for operations of ($8.0) million compared to generating cash of $1.4 million for the same period in 2021. The Company has cash and cash equivalents of $33.9 million at the end of Q2 2022.
Nancy Huber, CFO for Schwazze commented, “During Q2 we focused on completing integration of our acquisitions and made sure that we used our resources effectively. We are focused on reducing operating and SG&A expenses and judiciously investing growth capital to ensure adequate liquidity and profitability despite difficult market conditions in Colorado, which we believe to be transitory and temporary. Our balance sheet remains strong, and we have ample liquidity. We are focused on delivering positive cash flow net of acquisition costs for the year while driving organic growth and making smart acquisitions.”
The Company has revised its guidance for a fourth-quarter 2022 (Q4 2022) annualized run rate, which excludes transactions that are announced but not closed. Q4 2022 revenue annualized run rate is projected to be $175 million to $200 million, and the Q4 2022 adjusted EBITDA annualized run rate is projected to be from $60 million to $72 million.
Lets take the reported 2nd quarter revenue and it stays the same Q3 and Q4. Shwz will be at the lower end of it’s year ending revised guidance of $175 to $200 million, This is with zero growth the rest of the year!If we are slightly optimistic and growth is a paltry 4% to 6% the rest of the year and add no stores , That would still increase the year’s sales enough to make $SHWZ land in the middle of the revised guidanceWe still have a couple New Mexico stores opening soon, & a few acquisitions in Colorado , We also have the new partnership with lowell farms of which i dont expect much as there are only carrying the 3 pre-rolls and nothing to do with the lowell 35’s. Plus who knows what other stores we buy in Colorado . Justin Dye said there are 600 stores and we are only 23 so there is plenty of room to grow there
In theory we wrap up 2022 closer to the upper end of guidance $175 to $200 million
new deck sheet
Short sellers sure had Moxy yesterday, shorting over 78% of SHWZ shares. I wonder if they are covering today, or buying even more(?)
% of Vol Shorted
Schwazze Q2 Revenue Grows 44% YoY, What About Profit? (msn.com)
price target $3.20
August 12, 2022: Schwazze reported Q2/22 revenues of $44M and $15M adjusted EBITDA. Revenues came in slightly below our $45M forecast while the adjusted EBITDA exceeded our $12M estimate on higher than anticipated gross margin particularly for the New Mexico business. The gross margin beat offset some higher OPEX spending in the quarter that appears to have been associated with acquisitions and will be non-recurring. We continue to anticipate declining OPEX spending for the remainder of the year as Schwazze management implements stringent discipline with acquired businesses in both Colorado and New Mexico. With the earnings report, management provided an update to the previously discussed Q4/22 annualized run rate guidance for revenues and adjusted EBITDA. The company lowered expectations to reflect a Q4/22 run rate of between $175M and $200M in revenues and adjusted EBITDA in the range of $60M to $72M. This is below prior forecasts of $220M and $260M in revenues and adjusted EBITDA in the range of $70M to $82M. The cut to guidance is primarily attributed to worse than expected wholesale pricing and some slower than expected growth in Colorado as well as the push off of some new retail contributions in New Mexico which now look more likely to come online with full contribution in early 2023. Importantly, within the guidance cut, Schwazze is actually picking up margins at the mid-point (anticipated adjusted EBITDA margin going from ~32% to 35%) despite a likely gross margin hit on the challenged pricing environment and the company remains on track to be cash flow positive for the year net of acquisitions. The scaling margins and continued cash generation with existing assets in the face of market pressure reflects the ability of management to still take costs out from acquired businesses without sacrificing growth. We continue to expect this ability will bear fruit as the company gains further share in Colorado and New Mexico and as Schwazze eventually expands into additional markets. We are confident that market expansion is coming soon and continue to expect the most likely states for expansion will be Arizona, California, Nevada or Texas. We update our model to reflect the guidance cut for Q4 while our 2023 forecast is largely unchanged. Our rating remains Buy and our price target $3.20 as we view Schwazze as one of the more underappreciated operators in the space and a worthy candidate for greater consideration.
Q2 EBITDA Beat.
Q4 Run Rate Guidance Down on CO market Headwinds but Reflects Improved Margins on Cost Cuts.
Schwazze remains one of fastest revenue growers in US cannabis. Expect growth to continue while margin upside will come with scale and vertical integration.
Capitalized for additional M&A in the near term. Believe company a likely partner of choice for sellers and expect a takeout is in play.
Largest operator in Colorado and Early leader in New Mexico following state’s April rec market opening..
Stock remains undervalued despite favorable fundamentals.
Unlike most other top growth stories in the space, growth for Schwazze is not dependent on the integration of any large assets or looming legislation catalyst that could ultimately be delayed through factors outside management’s control. Schwazze growth is about enhancing efficiencies in operation and gaining customers within existing markets.
Wow , i guess the market finally found SHWZ ,,,volumn only 100 k but now trading @1.38
This may be the reason for the price really moving,Expansion Underway. 4 more NEW MEXICO clinic locations have been found. 3 just recently announced , and a 4th was just found
I”m not sure what the driving factor was yesterday on this. Might have more to have done from the profits that were unexpected. New dispensaries themselves may not be a driver in the stock since many other companies open new dispensaries all of the time.
I am sure that it is in SHWZ shareholders best interest to grow organically or by picking up struggling dispensaries for a fair price in a saturated market. This is Unlike most other MSO stories in the space. Justin Dye just said in the earnings call that there are 600 dispensaries in CO alone of which are 23 , Plus he mentioned a wholesale distribution warehouse .This is alignment with there new relationship with Lowell. Growth for Schwazze is not dependent on the integration of any large other assets or looming legislation , that has and could ultimately be delayed through factors outside of any MSO management’s control. Schwazze growth is about using the skills brought to the table by Justin Dye and his team he brought over from Albertsons , they do this by enhancing efficiencies in operation , moving products ( shelf velocity) and gaining customers (boots on the ground) within existing markets.
Agreed. Schwazze is doing it right and they will grow appropriately versus acquiring growth. In fact, and I have said this many times about Schwazze, they get acquired because of their story and growth potential. Their numbers are close with 27.1% EBITDA/Revenue. That is better than the S&P500 by about 5%. If we get favorable conditions coming from Congress, an eventuality, profits will move considerably upward. SHWZ stock will follow.
I think there is a bit of a fist fight between the short sellers trying to control the share price down, and people that actually want to invest in this company. Very wierd. short selling volume over 50% by a long way and share price going way up. Not sure how that math works.
It’s almost like the short sellers want to give buyers cheap share prices, and the buyers are coming in faster than the short sellers can sell the shares, and prices keep going up. I have not seen this before, but I haven’t studied short selling and share price movement in a situation quite like this before.
This short selling seems to indicate to me that SHWZ might be set to go up a lot higher near term. JMHO, because it seems strange so high of sort selling yet share price is going way up.
I think I might start comparing that to other stocks going up fast, and see if this is a fluke or a trend, or whatever it may be.
% of Vol Shorted
It boils down to bid/offer spread and who hits what. If the last price of a stock traded was $1.00 and the new bid/offer is sitting at $1.10 & $0.99, and orders hit at the $0.99 and then the $1.10, this prints last at $1.10. Someone comes in and pushes up price by hitting the offers at levels very high, this will move the market. And, short sellers could very well be getting stopped out. They may simply be getting squeezed and someone is pushing up the stock. It becomes a feedback loop.
Im getting my Pelvis Chipped, SHWZ taking a beating out here this morning low of 1.28 ,,, Looks like a little improvement up to 1.40
I figured that the surge may be over – You saw my video from yesterday, correct? That being said, the Nasdaq-listed cannabis stocks are bid today. If that keeps up, people will start flowing into cannabis stocks. I’m largely ignoring August and waiting for September/October/November for legalization and all its chatter before, during, and after. But, August is starting to get interesting. Keep an eye on those Nasdaq stocks. That might be the key.
Thank you for the Video D.H.
SCHWAZZE.Ive been reading the new investor deck and all the transcripts form the last week .If it wasn’t clear before it certainly is clear now that the number one goal is to become number one and a concentrated Market ,Going deep …. What is it and why it mattersThey are Creating Super Regional and Concentrated retail operations that will drive market share , The volume of this strategy will create Huge cost efficiencies , Pushing profits to the bottom lineWhy the goal is to stay geographically focused ,Ultimately this allows us to become Diversified through growing the asset portfolio in Colorado and New Mexico.The asset portfolio of course includes,. Multi branded dispensaries , Soon-to-be 37 with your 4 additional upcoming in New Mexico. Strong-house brands Resulting from our Super Regional structure ,. Strong wholesale distribution center , Not only driving our house Brands but being a trusted partner for licensing agreements like Lowell Farms , The increased sales volume from the wholesale portion allows us to increased buying the creates Leverage getting us power to negotiate cost reductions with all the key outside suppliers. 7 Growforth Gardens Facilities. 3 Purple B’s Manufacturing facilitiesAll this creates a strong retail experience coming from the Strong management team,That measure’s and manage’s the meticulously collected data , The resulting analysis allows them to continuously improve their operations , and brand management , Once again creating a huge push in sales volumeIn the end every one of these Processes are lowering the cost per unit in every element of the business. Once again this creates profit,The real secret is this is not sexy and romantic like the big multi-state operators that everybody’s been falling over themselves to buy. This is your down home meat and potatoes white picket fence stuff. It’s clean and simple, In fact so simple seems like no one thought of it, till now.I know how many others parrot this line ( Shwz a takeout target for the big bad MSO’S) . I say F that, I hope JD keeps up with his Strong Vision.Yes , yes there will be many ups and downs but in 1 to 3 years were talking 5x , 3 to 5 short years this stock is a 10x.
This is an A.I. price projection site
According to headset_io, cannabis sales growth declines are likely a sign of a correction rather than a cause for concern,Sales are returning to pre-pandemic levels. https://businessofcannabis.com/2022/08/15/headset-arent-concerned-by-apparent-sales-growth-declines/
After the last 2 weeks of Earnings the results for all the mso’s (not including shwz) are lower margins, lower revenue and more debt as well as lower market caps resulting in revised guidanceThe list is from some Analyst is Biased and as usual SHWZ wasnt on it2023 Projections from revised guidance LOWLF was the smallest operator on the list so we got snubbed
Note: Lowell really lowered the averages so Shwz would look even better if they were not included
Other CompaniesAvg EBITDA for 2023 is 26.9 %Avg projected Sales growth for 2023 30.9%Avg EV/SALES ratio 2023 1.6%Avg EV/EBITDA ration 2023 6.3%SHWZAvg EBITDA for 2023 is 33.1%Avg projected Sales growth for 2023 33.3%Avg EV/SALES ratio 2023 1.3%Avg EV/EBITDA ration 2023 4.8%
In the previous post SHWZ is literally are projected to be best in class
1 Ebitda margin 2023
2 EPS 2023
3 Cagr 2023
4 P to E 2023
5 E/V to sales 2023
Its hard to say how accurate the chart is but this guy revises this weekly, and he answers your questions on twatter
D.H. asked would i give a report from the investor meetup
What a very informative and crystalizing experience over at Boca Raton on Monday.
1. Justin Dye expects to get to 100 dispensaries in Colorado
2. There are 2 more Nm Dispos plus 4 previously reported total of 17
3. 80% of New Mexico population is on the South east corner of NM , JD said the down side of purchasing R Greenleaf , that none of the current Dispos are located there , All of the new 6 locations are located in that SE area
4 . Starbuds cost 4.1 x ebitda to purchase ,, current deals are going for lees then 2x , probably closer to1x in this distressed market
5.California is not an option , too much black market Comp and too many lawsuits
6.JD and his team probably have more experience then any other C suite in Cannabis ….. From Mergers to Deep market Penetration , Mechandising,
7.Due to SHWZ super regional penetration , We are probably the most Unique MSO , Future Locations and Mergers in Co are a priority if they add too concentration in Denver , being spread to thin are the mistakes made with Alberstons, AandP and Krogers.
I will add more later
The typical Mso companies advantages have always been “first mover ” The new advantage buzz word is Size/Scale.
Are they wining though ? I mean really winning ? , Actually no , why because there capex is outrageous , there margins are shrinking ,this is not the case with with all the Mso’s , but most .
Maybe they are not winning on margin because of there strategy, The big Mso strategy was initially getting into many states , this also required alot of skill/luck as many were lotteries , in time again the advantages went from a 1st mover to scale , Grow more weed and add more states or like Planet 13 , make Mega /Scale stores .
If we thing long and hard SHWZ isnt trying to mimic the Bigger MSO’s . WHY ? Because SHWZ strategy is different ,,,GO DEEP , Become super regional .
The thing is all of these concepts , 1st mover , size/scale, and strategy can be copied so eventually you loose that advantage.
For example these investments in scale and the sustainable competitive advantages for the Tier 1s will no longer help.
I don’t think it’s a coincidence that many of the top MSO’s run by finance guys’ are lagging.
It is very interesting scenario as skill improves, especially in competitive markets, Trick plays and luck becomes more important determining outcomes.
In very highly competitive, you really need to have a differential skill ,something completely different to win in retail distribution.
SHWZ strategy is add stores really close to others , JD said id rather poach 100 k a month from a 500 store if i add one in close geography doing 400 the net is 300 k and you push out the competition. GO DEEP
100 stores in Colorado? WOW!!! Their current store count is about 20 so, multiply revenue 4x – 5x. But, costs would stay contained because the SG&A won’t go up that relative to revenue. They would be printing about $500M – $600M annual revenue, if they could hit about 65% EBITDA/Revenue, that is over $300M – $350M in EBTIDA/Revenue right there (And, this is only the Colorado portion). On about 15% net earnings/revenue this is about $75M – $100M in net earnings. They have 53M shares outstanding so, you are looking at future EPS of about $1.50 – $2.00. That translates into about $45.00 – $60.00 stock price.
Very back-of-the-napkin look. But, this is wheelhouse if they can pull this off. And, this is only looking at the potential of 100 stores in JUST Colorado. There is NM and there will be other states.
@dhtaylor I added a screenshot of the total shares out with convertible debt and warrants , some warrants are so out of the money they wont be added
You tube video of SHWZ ceo Justin Dye
0:00 – Company Overview 1:12 – Highlights of the Q2 Report 5:41 | 13:42 – Explaining Schwazze’s Business Model and Strategies 9:18 – Overview of Schwazze’s Omnichannel Feature and E-Commerce Side 11:21 – Sustainability of the Business Mode 15:45 – Explaining the High-Low Promoter Model 18:24 – Risks Assessment in their Strategy that Focuses at Colorado 22:14 – Cannabis Industry as a “Recession Resilient” Investment 26:31 – Accommodating All Types of Cannabis Customers 29:37 – Possibility of Adopting another Business Model as a Hedging Strategy 35:06 – What’s Limiting the Company’s Growth? 36:53 – Conversations with Institutions 39:07 – Key Components in Building Company Value 42:53 – Outro
We have seen a lot of the same issues such as California & Oregon before (And, Canada). Too much supply from too many companies showing up all at the same time. The smallest will get weeded out. Then, supply will start to shrink as those that remain, the ones with access to capital and can manage through these tougher times. Then, price starts trending higher again.
Guess what, these higher margin East Coast stores? Same thing is going to happen. But, these companies don’t know who is going to be the last standing. However, the bigger companies that have gone through these waves of activity, are going to apply what they already know to these newly opened states; they will do well. But, margins will thin eventually.
I like the idea of getting involved in a company that is mature enough to have gone through these cycles and understands. This allows for these companies to not be over zealous in expectations and soldier through methodically.
I’m still mulling over the 100 stores in Colorado for Schwazze. That would be huge!
informative chart, wish i could imbed it
You need a link to embed a file and it post inside the posting. Once you upload a file, it creates a link. Click that link, copy it, and go back into the original posting and edit it and paste the link. Done & dusted!!!
You can also upload the file, get the link to the file, and then delete the original post and post whatever you want with the link inside. If you delete a post, the content from the jpeg is still inside the system. The link would still work.
The other thing you can do is send me the file and I will upload it and get a link. Then, you can post something original and not have the “edited” info on the posting, if that is something you feel you want.
@dhtaylor Thanks , i also see u fixed it
The following is a post by me on another platform and a reply
True story about shelf competition, I have a friend that represents High Noon alcoholic seltzer. He is down here in Florida and services 10 Publix grocery stores. Just yesterday he was telling me the Budweiser guy that has 40 skus in the chilled drink section The competition has been stacking their new product right on top of his, These guys make a living on Commission so they have to try to visit the grocery stores every day to make sure their product is front and center. He’s got one product on the Shelf they’ve got 40 + but they constantly cheat and try to hide his product.
I could think of so many analogies about this story from how valuable the Shelf space will be in the dispensaries without the Shelf space you can’t push your brand , JD talked about that often. I remember JD saying that retail is a full-contact sport 24/7. His grocery store knowledge is probably the greatest asset because was dealing with low priced commodities and used to price compression . This is why branding and shelf velocity Is huge in getting the returns that are needed .
Another thing I want to mention about Publix in Florida I believe it’s most similar to what Schwazze is trying to do. They’re in every town and city in Florida many times over, I could literally walk from one to another location . Sure there’s competition But geographically speaking they can’t be beat. That’s sort of the main point that I got out of his JD’s last interview on YouTube
Astute observation and all true…i am a former “Bud Man” here.. Bud guys are trained to crush the competition…I literally super glued a 6 pack of Miller Lite cans to the shelf in a Winn Dixie in JAX once to let the Miller guy know, that I knew, he was stealing facings from me. Publix is the greatest grocer on the planet, bar none (Where Shopping is a Pleasure!)
JD’s comprehension of the competitive landscape that is grocery and brand building is the key to our success. He is playing the long game, but doing all the “right” things in the short term. Publix is a grocer, but also a brand. Their margins are nearly double the competition in the SE US, particularly in Florida because they back up the slogan regarding pleasurable shopping…they earn their margin through customer and brand build/satisfaction…
Fun fact, Publix actually “stole” the liquor store (fully owned and branded) attached to grocery anchor concept from Albertson’s (versus letting the local yokel independent liquor store owner have it)…just yet another reason to love JD and his Senior Advisor of Strategy…Mr. Todd Williams
Nice article on NM sales, Gov said “I think $400 million and even ultimately a $500 million industry is possible in the next three years,”
By tourism, in that article, they mean El Paso TX traveling about 20 minutes up the 10 Freeway to dispensaries in NM where individuals can purchase whatever they want that are unavailable in Texas.
There are 1M people in the El Paso region. 15% are going to want to partake in cannabis on some regularity. 20% of those are going to want to do that daily (As we have chatted about). That breaks down to about 30K people who are going to need a constant, daily supply. NM dispensaries will do very well from Texasns based upon these numbers.
Justin Dye said that all of there new R. Greenleaf dispensaries are in the south east corner of NM bordering texas and 80% of Nm Population is in that area
Not certain I can bite into the data on that 80% statistic. NM has 2.1M people. Bernalillo county, where ABQ is – where I am sitting as I type this – has 700K. Santa Fe County & Sandoval County each have about 150K. That is about 50% for the entire population in just the three biggest counties. This is the Rio Grande region and along the Rio Grande is the biggest populations of NM right down the center of the state.
There are no real cities to speak of out in the south east corner. Carlsbad is out there. And, the Permian Basin is in that area. But, the state itself is very sparsely populated. There is a river system through that area – The Pecos River. There are small towns all along that area. But, the real population potential is across the border in Texas. Just look at a satellite map. Texas has Lubbock. That whole area has some solid populations.
Maybe he said 80% of the sales , but he mentioned that number , but logically as I type that I agree it seems like not many folks over in that corner of NM.
Wish i would have recorded the event, I do have a call this afternoon 4 pm EST with Joe Gomez the Noble Capitol analyst that covers Schwazze , if you or anyone has any quesitions let me know
In the article it refers to 8 new locations in New Mexico ,,,,WOW
With the increase in sales, Schwazze plans to expand more locations throughout New Mexico. Those locations include 1. Albuquerque, 2. Los Lunas, 3. Sunland Park, 4, Alamogordo, 5. Ruidoso, 6. Clovis, 7. Carlsbad and 8. Hobbs.
This piece could belong in any forumn
From Eight Capital ( no target on SHWZ)” MSO target revisions: We have refreshed our target prices to reflect updated estimates coming out of Q2 reporting, along withmarket- and sector-wide multiple compression since our last revisions.Target-setting multiples range from 11.5x – 19x, compared to the previous range of 11.5x – 24x. Our target-setting multiples are supported by analogous peer groups (Beer, Alcohol, Tobacco, Retail, and CPG) which trade between 9x – 19x, and are informed by the group’s peak-to-trough range of ~8x – ~24x. Key risks to our target price include stalled efforts to pass federal cannabis reform this fall/winter, broad economic deterioration that impacts consumer spending, and general market volatility”
@aconceptsketchgmail-com This Bud Man piece is simultaneously awesome, entertaining, and invaluable to bear in mind for the future.
Alliance Global Institutional Research Is 30% the New 40%A Look At Evolving MSO Margin TrendsFollowing the 1st half of 2022 earnings season, we believe its appropriate to take a closer look at reasonable EBITDA margin profiles to expect of MSOs. While FY2 Street expectation have fallen nearly 10 pts over the last roughly year and a half, we believe current -30% margin expectations (average among large MSOs) remain healthy & that prior expectations near 40% in early 2020 had gotten ahead of their skis, partially attributable to the benefit of high margin newer adult use & medical states having a larger impact on margins, with margin enhancement opportunities pushed out by regulatory delays of sales in new adult use markets or sale opportunities (i.e., IL retail), pricing pressure in markets sooner than expected (MA & PA) & inflation driving lower avg. ticket & downtrading. That said, MSOs still deliver a more attractive margin & growth profile compared to mature consumer categories such as CPG & high-growth retail, but trade at a 50%+ EBITDA multiple discount. While improved fundamentals could help narrow the gap, we view uplisting & 280E alleviation as needed for a more notable multiple rerating-with uplisting potentially coming if the SAFE Act is passed later this year.Margin Expectations Coming DownExpectations for EBITDA margins by the Street reached a peak in March 2021, when consensus was estimating FY2 EBITDA margins near 40% among leading MSOs (above $900M EV today) who were public at the time. Since, we have seen margin expectations come down due to a number of factors, including pricing pressure in key markets (such as PA & MA), broader macro trends such as inflation straining the consumer wallet, & supply chain issues causing input costs to rise – with the Street estimating FY2 EBITDA margins of -30% today.EBITDA Margin Expectations Have Fallen From Nearly 40% to -30%Updated Margin Expectations May Be More of a Reset to RealityWhile FY2 EBITDA margin expectations have fallen nearly 10 points in the last roughly year & half, we would argue that Street expectations may have gotten ahead of their skis. We see this as predominately due a number of key markets being at the earlier stages of its maturity curve, resulting in high margin sales as operators benefitted from higher wholesale & retail prices. Indeed, Street FY2 margin expectations in early 2020 were -30%, roughly equal to today, which one could argue is favorable given macro conditions (when compared to other consumer sectors). Part of the reason for the rise in expectations to nearly -40% average is what we believe to be expectations of new markets margin profiles & prices remaining high in newer markets, with neither dynamic being sustainable & moreso a function of market timing of oscillating maturity curves, in our view. We would also note that the law of numbers, limits the impact of new adult-use state as operators become larger, with the margin lift from new adult use states such as IL (began Jan 2020) in the year 2020 setting higher margin lift expectations for upcoming adult use states such as AZ, NJ, NY & CT, which had begun or legalized in the 1H22 time frame when margins were at peak levels. All of this to say, that in a steady state of diversified markets & oscillating maturity curves, we believe 30% EBITDA margins should still be viewed favorably.Taking a Longer View, Margins Have More so Returned to Pre-COVID LevelsComparing to Mature Consumer Categories, MSOS Remain AttractiveIn fact, when comparing to mature consumer categories, MSOs EBITDA margin average of -30% still fares higher than that of large CPG companies at 25% as well as high-growth retail at -10%. Furthermore, we continue to note how MSO’s are still expected to see greater sales growth over the next two years, despite recently tempered MSO sales expectations recently, with MSOS expecting to grow sales -20% in 2023, compared to -4% for CGP & -8% for high-growth retail. Despite this, MSOs still trade at a more than 50% discount to these mature consumer categories, with MSOS -6.7x EV/EBITDA multiple well below that of CPGs ~15x & high-growth retail’s 13.6x. Even in scenarios of assuming incremental margin pressure, MSOS still trade at a meaningful discount, with an assumed 20% EBITDA margin (based off current sales expectations), still resulting in FY2 EV/EBITDA multiple of just 10.5x. While we believe improved fundamentals will help close the gap, we see the need for the ability to uplist to major exchanges and alleviate 280E tax hurdles (so that EBITDA is a better proxy for cash flow) as needed for MSOS to trade more at parity to these consumer categories (or even a premium given its higher growth outlook).MSOs Continue to Offer Greater Growth & Higher Margins Than Traditional CPG & RetailWhy MSO EBITDA Margins May Now Be BottomingThere are a number of signs that might indicate the margin outlook for MSOs will start to stabilize & has started to find a bottom, though there could be another quarter or two of near-term margin pressure. We see this as a function of a number of factors including: 1) New Adult-Use States: NJ sales ramping as well as the beginning of adult use sales in CT, NY & RI (along w VA in 2024) should provide high-margin sales to operators in initially supply constrained markets, 2) MSOs Increasing Vertical Integration: During 20 eaming season, a number of MSOS noted proactive steps to increase vertical integration in markets with pricing pressure to maintain margins, 3) Adjusting Spending to the Times: Managements teams spoke to a slowdown or tempered SG&A spending as operators adjust to the current environment, 4) Broader Capital Constraint Could Force Rationalization: As we have called out in the past, broader capital scarcity and difficulties for operators to operate profitably (& more specifically CF positive) could force rationalization of pricing, particularly in mature markets (such as CO), which should help stabilize margins, 5) Increased Cost Efficiencies: MSOs are focused on realizing additional cost efficiencies amid pricing pressure, which we believe could come via increased automation. That said, we remain cautious on prices continuing to decline in maturing adult-use states such as MA, along with broader macro trends pressuring the consumer wallet causing down trading. As such, while we believe there could be near-term margin pressure, we remain bullish on MSOs’ ability to generate healthy margins over time, with management teams largely reiterating their long-term EBITDA targets during the eamings season (though more lofty margin expectations may be more difficult to sustain).
I have been saying this across the board. SAFE+ Which, this should allow for up-listing, will allow the bigger players in to support these stocks. But, 280E is also a key factor in that it allows for writing off costs which other businesses can do right now. Given that, profits would fly through the roof if 280E were reconsidered. This is what we are really awaiting.
“Anybody can jump a motorcycle. The trouble begins when you try to land it.” – Evel KnievelTrying to land on the best cannabis stock to buy is almost damn near impossible ,it seems to me the best stocks are those where most people think the person or intial underlying idea is crazy…This is why the best stocks seem literally …insane to the late-commers .They say insanity’s twin sister is Passion ,,, Justin Dye has passion for Cannabis , he actually uses it in edible format.
Passion is the fuel the helps implement the Vision and he has a strong Vision and Passion for Cannabis . Not every body can land a jump across the Grand canyon , But my bet is Justin Dye will be the one to do it , sure there are a few others that will land the jump but i would rather watch someone who has style and grace while he is landing it and he doesnt care what people say about him while he is doing it . This is why no ones really talks about Schwazze .
ShwzBest in class management team with a contrarian MSO strategy focusing on scale with a super regional footprint.
Beacon Securities analyst Russell Stanley launched coverage on Tuesday on US cannabis company Schwazze , saying that with a proven management team and a stock that’s trading at a discount to its peers, Schwazze is deserving of a “Buy” rating.
With operations in Colorado and New Mexico, Schwazze (formerly Medicine Man Technologies) has been an active M&A player recently, having closed on acquisitions since December 2021 that have added 15 cannabis dispensaries to its stable, along with four cultivation facilities in New Mexico and one in Colorado as well as a manufacturing asset in New Mexico. Schwazze is currently the second-largest player by retail footprint in the well-developed cannabis economy of Colorado, and the company had its first recreational cannabis sales in New Mexico in April of this year.
On its financials, Schwazze reported $44.3 million in revenue for its latest quarter, the company’s Q2, delivered last month, up from $30.7 million a year earlier. Adjusted EBITDA for the quarter was $15 million compared to $10 million a year earlier. (All figures in US dollars except where noted otherwise.)
“Schwazze, however, is demonstrating that our regional strategy, built on a customer first approach, developing significant scale, building brands and leveraging data analytics and technology is not only sound but gaining momentum as demonstrated by revenue and unit sales growth, customer loyalty and by once again outpacing the legacy market growth by approximately 12 per cent,” he said.
Schwazze began trading on the Toronto-based NEO Exchange in March of this year and has lost about 17 per cent of its value in the time since.
But Stanley likes the look of Schwazze, especially management, which he called shareholder aligned and bringing with it strong depth in the retail sector. Stanley cited that Schwazze officers and directors own over 77 million common share equivalents, representing 55 per cent of the basic shares outstanding, with CEO Dye owning 41 million common share equivalents and two million options. Moreover, pointing to the pedigrees of both Dye and Chief Strategy Officer Todd Williams, Stanley said Schwazze management is punching well above its weight given its market cap of C$281 million.
“Mr. Dye previously served in several C-Suite roles with Albertsons Companies, where he was instrumental in making it one of the largest food and drug retailers in the United States. During Mr. Dye’s tenure, Albertsons expanded annual sales from $10 billion to $60 billion, expanding to 2,300+ stores with 285,000 employees,” Stanley wrote.
Looking at Schwazze’s focus in Colorado, Stanley said the market remains competitive but it’s ripe for consolidation. With a population of 5.7 million, Colorado has the second largest legal cannabis market in the world at 2021 sales of $2.2 billion. The analyst noted that sales are down 21 per cent year-to-date, however, as access to capital in the tighter market remains difficult. But that should only make it more likely that additional vendors will come forward as ripe for the picking, Stanley said.
“Given management wants to develop a 100+ store footprint in CO versus its current network of 23, M&A will likely play a significant role in the required quadrupling of the store count,” he said.
Also, Stanley likes Schwazze’s performance so far in terms of profit, where the company’s recent Q2 margins were at 34 per cent, putting it in good company with many of the US’s largest multi-state operators.
“We believe this demonstrates the company’s operational skill, particularly given these margins were produced during a tough operating climate in CO, and we note that management’s guidance implies further improvement in H2,” Stanley wrote.
Looking ahead, Stanley is expecting Schwazze’s revenue to go from $108 million in 2021 to $165 in 2022 to $189 million in 2023. On adjusted EBITDA he is calling for a move from $32 million in 2021 to $52 million in 2022 to $61 million in 2023.
On valuation, Stanley sees Schwazze’s EV/Revenue going from 3.3x in 2021 to 2.1x in 2022 to 1.9x in 2023 and for its EV/adjusted EBITDA multiple going from 11.0x in 2021 to 6.8x in 2022 to 5.8x in 2023. Stanley has started Schwazze off with a 12-month price target of C$3.00 per share, which at the time of publication represented a projected return of 71 per cent. Stanley has SHWZ currently trading at 5.8x his 2023 EBITDA forecast which represents a 21 per cent discount to the 7.3x average among CSE-listed US cannabis operators.
@aconceptsketchgmail-com Who is the official largest player in Colorado? I actually worked under the assumption that it was Schwazze with approximately 20 dispensaries. But, according to this article, there must be a company that has more dispensaries.
SHWZ is , but Crescolabs/Columbia Care has the most dispensaries 30 but Schwazze has 23 and does more revenue . There are very stark differences in how they run there business Cresco / Columbia run it like a limited market with mostly ony there products whereas SHWZ runs it like a Convienece store/supermarket with lots of choices from a variety of competitors creating a much much bigger menu.
D.H. on that note do you have access to Beacon i had to just post a link to an artcile writing about the Beacon website, i just signed up so will see if i can get access
So, I wasn’t losing my mind. Completely, at least.
This brings up an interesting thought sequence I have had about some things. If there are two stores right across the street from each other, both 1,000 sq ft, and one only sells its products but the other sells a convenience store of products, the first sells lower amounts of product versus the latter, the obvious investment is in the second store. They are able to convert investments at a better rate. I have often wondered on this. Despite Cresco/Columbia having more stores, they are selling less per store. And, when you look at their margins, you can see it play out in profitability metrics.
Here is another line of thinking: Walmart is taking on Amazon with online sales. Amazon lists about 7 million products. The 80/20 rule states that 80% of your results come from 20% of your efforts. In this case, of Amazon’s 7M products, 1M make 80% of the sales. Walmart is only adding in that 1M onto their online store despite the fact they could easily add in all 7M at no real cost to them since these are things that outside players add into the Walmart stores.
Given that line of thinking, Schwazze will add in the best selling products they can get and draw in more foot traffic because of the variety and ability to add quality (Lowell? Ummm… yeah!!!)
Shwz“Best in class management team with a contrarian MSO strategy focusing on scale with a super regional footprint”.
All one has to do is take a look at the StarBuds menu vs the other MSO’s .The winning strategy was already know by Team SHWZ by having the widest selection, competitive pricing, outstanding customer service and branding with the desired shelf space control plus with constant measured metrics that came from the Grocery store mentality . These attributs set SHWZ apart . The grocer’s supermarket model works, SHWZ executes faster, agility, in the shelf space , co-op marketing. This is why SHWZ is outperforming their sector comps and will likely continue into the NM.
Cannabis remains a compelling secular growth story, macro headwinds and legislative delays are a near-term issue: We remain bullish on the cannabis investment opportunity in the U.S., viewing the $65B+ U.S. illicit market as a material market conversion opportunity. We believe as the industry matures, pricing will compress naturally as access improves, bringing new consumers into the legal channels while cultivation scale offsets margin pressure. We still expect the U.S. to reach over ~$100B in sales at maturity and believe these stocks will trade in-line with CPG peers at ~4.0x NTM EV/sales, with MSOS currently trading at a 50% discount at 2.0x. Cannabis legalization on both a state and federal level should accelerate as more U.S. states legalize (19 adult-use), forcing the eventual federal movement to open up U.S. operators to U.S. exchanges uplistings. We believe the best path forward for cannabis reform is an incremental approach, and we are warming up on the signaling political willingness in the positioning for a potential SAFE+ passage.
@aconceptsketchgmail-com This is basically my entire thesis as well. Let’s see if they can get it done in the next four months.
Cant find the PDF , just a picture for Beacon on SHWZ
Sales continue to climb month by month in NM
JESSE HUNT IS THE SPOKESPERSON FOR SHWZ THE COMPANY THAT OWNS OUR R.GREENLEAF.
SHE SAYS BUSINESS IS BOOMING AFTER TWO RECORD BREAKING MONTHS OF SALES IN OUR STATE.
THE NUMBERS SPEAK FOR THEMSELVES AND ANYONE WHO WANTS TO HAVE ANY QUESTIONS ABOUT IT.
I THINK WE JUST CONTINUE TO SHOW THAT THE NUMBERS CONTINUE TO GO UP
SHE SAYS SHE DOESN’T EXPECT TO SEE THIS SPIKE IN SALES SLOWING DOWN ANY TIME SOON.
IN TERMS OF A CEILING, I DON’T FEEL LIKE WE’VE IDENTIFIED THAT YET.
I THINK THERE’S A LOT OF OPPORTUNITY FOR US TO CONTINUE TO EXPLORE NEW MARKETS