No, not vapes. Vapours. As in, there’s nothing in this business but fresh air..
ICC.V pounded out of the gate a few days ago and has flown every day since. The story is simple: They have a recreational license to do business in Uruguay. So, free money, right?
Well, no. Detail matters. They have a license to grow but not sell. The company financials, released to Sedar recently, show a money losing operation as it went to market and make little mention of expectations going forward.
Perhaps that’s because it has none. Uruguay has yet to allow recreational marijuana sales, despite letting ICC grow product, and when the rules were written, they only allowed for 40 grams per month, per user, if said user submits to fingerprinting and registration by the government.
Their bonus for doing so is consumers will be paying $1 per gram for the product.
That’s $1 per gram retail. Which means pharmacies will be needing to buy it for $0.75 per gram wholesale, or less.
Meanwhile, ICC says its costs to grow are $0.60 per gram, which it boasts are amazingly low compared to Canada, but also amazingly high if you want to make a living in Uruguay with a price cap.
Good luck justifying that $132 million valuation, folks.
The ICC website is absent of any real information. And the outstanding shares top 112 million – so good luck raising any more money in the future.
Yes, the folks that bought into the listing financing have made bank – they’re up 3x on their money so far, with warrants out there too.
But, as a company, this deal is worthless. It’s run by a 29 yr old Uruguayan markets guy, it’s based in a country where the population is about equal to Surrey BC, and something not often talked about by them is that medical users can grow their own in Uruguay currently.
ICC intends to use the net proceeds from its C$13 million brokered private placement financing for the construction of facilities necessary for the production and processing of recreational cannabis, medicinal cannabis and industrial hemp pursuant to licences and authorizations issued by the Uruguayan government, and general corporate purposes.
In other words, thanks for the money, we’ll look after it for you.
If you feel like this is a big money making opportunity, by all means buy in. But also check in, to the nearest ‘over optimism therapy clinic’ you can find, because this deal is a bucket of horse pucky, financed by guys who knew the market would propel it without looking too hard at details, and who are now getting baked at the Pac Rim, discussing which hookers to book for tonight.
Sedar is your friend, folks.
— Chris Parry