Testimonials

1933 INDUSTRIES – TGIF on the TSX-V

www.1933industries.com

1933 is a vertically integrated Marijuana company, serving the United States, and is poised to become one of the most recognized branding companies, after licensing agreements with some of America’s most influential names, such as: Tony Hawk, Jack Herer-(tm), Blonde Cannabis, AMA, CannaHemp, Grizzly Grip Tape, and more.

AMA is the leading brand in the State of Nevada, and #1 in Las Vegas.  Now after moving into California, our thesis is they will continue to scale up the branding business through licence agreements, partnerships, and non-dilutive management agreements, designed to increase shareholder value.

CannaHemp is a manufacturer of high margin CBD products, currently being sold in over 800 locations throughout the United States.  We believe CannaHemp has the potential as a stand alone company, and with its high margins to date, is generating the majority of income for 1933.  Led by industry experts, partnerships in the x-sports industry, and upcoming agreements with Birdhouse, we believe CannaHemp will truly be exposed in 2020, during the summer Olympics, when skateboarding makes it’s long awaited debut.

1933 completed a 67,000 sq ft cultivation facility in las Vegas, which they subsequently flipped into a sale-leaseback, to raise an additional 10-Million dollars, and now have a 10 year lease agreement.  This facility is fully automated, and is purposely designed to compliment the premium products grown there, through their deal with DNA Genetics.  www.dnagenetics.com

This facility will increase the capacity 1933 can produce by 5-X it’s current production abilities.  This 5-x revenue is yet to be realized on a financial statement, and is currently not factored into it’s value.  We believe there is potential revenue of over $90,000,000 in 2020, which puts them in a negative price to sales ratio currently.  This presents substantial value compared to it’s peers trading at 10x sales ratios.

 

 

DELTA 9 CANNABIS – DN on the TSX main board

www.delta9.ca

Delta 9 is the largest producer, manufacturer, and retailer of Marijuana in the province of Manitoba.  Enjoying lower utilities than it’s peers, and through a proprietary method of growing Marijuana, Delta 9 is able to produce it’s product at one of the lowest CTP’s in Canada.  Currently at $1.05 per gram.  Delta 9 has opened retail fronts throughout the province, and is expanding through Saskatchewan, Alberta, and British Columbia.  Delta 9 is also in negotiations with the province of Ontario, to bring it’s products, and methods to Canada’s largest market.

Our main attraction to this company, is its management.  Laser focused on producing a premium product, at a low cost, while increasing shareholder value by a clean balance sheet, insider ownership, and low overhead.  We believe DN will be EBITDA positive by either Q4 2019, or Q1 2020, which puts them in a handful of marijuana companies in Canada.

Delta 9 currently trades at a Price/sales ratio of 1, while it’s peers trade at multiples of 10-15 and up.  TD Canada Trust Analysts have issued a STRONG BUY consensus, and a price target of $3.00, which represents a 500% increase from Oct 2019 share price.  Delta 9 also has a price to earnings estimate from TD of .05 P/E, which has them standing alone in this category, as no other mmj company in Canada, has actual positive price to earnings estimates.

Delta 9 also pioneered its grow pod method, which offers assurance, and insurance to producing marijuana.  In agriculture, it is wise to accrue for loss of crop through disease, infestation, poor weather, and less than ideal growing conditions.  Delta 9’s pod method mitigates the risk, as the pods are isolated, and offer protection in the event any of the aforementioned scenarios.  These pods are also stackable, and can double or triple the growing sq ft of the conventional facility.  Delta 9 also sells these proprietary pods to companies throughout North America.

Delta 9 projects to commission 600 pods by end of 2019.  Each pod can produce up to 2000kg per year of Cannabis, and with by using a wholesale avg of $7.00cdn per gram, we can give a rough estimate of $115,000,000 revenue from Wholesale alone, which values the company at half its wholesale income.  No retail sales, assets, cash on hand, or B2B income has been estimated.  This puts DN as a buy in our view with substantial upside.

 

 

WESTLEAF

www.westleaf.com

Westleaf is positioned to become a brand leader in Marijuana, and has already begun its domination in western Canada.  Westleaf is a fully integrated Marijuana company with a massive production facility coming online in Battleford, Saskatchewan.  A high tech extraction facility in Calgary “the plant”, which has already secured a 4 Million dollar extraction contract. Retail fronts in Saskatchewan, and Alberta (Prairie Records) www.prairierecords.ca

Our thesis on Westleaf, has us recognizing a company creating a brand in a Country which is not allowing MMJ companies to brand.  Prairie Records retail fronts, introduce the client to music/marijuana, in a truly unique experience.  We flew to Saskatchewan ourselves to see 1st hand what they offered the client, and we were happy we did.  Not only is the foot traffic coming through the doors, but their e-commerce website, allows the client to shop from home.  Westleaf has positioned these retail fronts in major cities in Canada (Saskatoon, Calgary, Banff), and are expanding its portfolio throughout western Canada.

Westleaf is fully funded through buildout of it’s facilities, and having partnerships with the Thunderchild 1st nation (their largest investment ever), a management team of industry experts & professionals, and an outside the box approach to the industry, we are excited to be a part of a new era, and evolution of the industry.

Prairie Records launched three stores in the Saskatoon region; The two most recent Saskatoon stores recorded net revenue of approximately $491,000 for the last 30 days of operations and approximately $188,000 of gross profits equating to a top tier gross margin of 38%, according to their last financials.  We have yet to see a full Quarter of retail revenue, as the stores have recently come online.  Assuming you have each store with a $250,000 monthly revenue estimate, and 4 stores online, we can safely assume each store can produce $750,000 per Quarter, or $3,000,000 – putting their run rate at about $12 Million without any revenue realized from extraction, or wholesale in Battleford.  Westleaf currently trades at a $41 Million cap, including assets,  and is substantially undervalued, and in our opinion, has no future earnings priced into the stock price.

Westleaf projects Thunderchild can produce 65,000kg from their phase 1 buildout, which equates to about $400,000,000.  If Westleaf can walk the walk, we believe it could be one of the best returns for us, and a company we can hold for a very long time.

Recent Posts