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March 13, 2024

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Why I don’t like THC BioMed (THC.C), AKA The Clone Wars

A few weeks back, when any company with a green colour scheme in the lobby was experiencing massive valuations multiplied every few days, THC BioMed (THC.C) came out of the gates like a bucking bronco.

It’s rise was short lived, as more and more people began looking deeper at their plan, and though it has had a few moments where it looked like things might take off, those moments have been followed by sell-offs. Right now, in my opinion, THC is a daytrader plaything.

Also, it’s not my favourite deal. Yes, they have a license to grow, a license to make oils, and now they’re saying they have their own lab. These are all fine things.

But the focus of the company appears to be a plan to sell clones.

For $20 each.

Umm..

Look, there’s probably a nice business there, and maybe it’ll sustain for many years. But that business reminds me heavily of the companies that sell ‘brew your own beer’ packages. Yeah, you might move some boxes, but is that really going to compare to the guys who make the finished product?

THC BioMed has engaged Affinor Growers (AFI.C), which is not my favourite company and which I haven’t kept secret about, to supply vertical farming equipment to the firm. The dirty secret about vertical farming in weed is, really, you can only use it to grow clones, because the plants grow vertically. Even if you used the tomato pyramid style of vert farming, once the plants start touching, your yield lowers. The news that THC was going there made it clear just how much they’re pushing for the clone market rather than the full flower space.

Let’s look at the clone plan deeper. If they’re selling plants for $20 per, and the turnaround time on getting those clones out the door is obviously quicker than a full grow and harvest season for a mature plant, maybe THC can sell $100 worth of plants. Let’s be generous and say $200 worth, since they’re smaller and can fit more into the same square footage as a mature plant. Hell, let’s say $500, just to be good people your mom would invite over for dinner.

Now, you’ve got to ship those plants, handle those plants, and while THC bought a clone-shipping company to get use of their novel packaging, it’s a lot more hand holding per mailout. On that $20 plants, maybe there’s $10 in packaging, growing, processing, cloning…

A traditional plant grown under lights will vary wildly in terms of yield and quality, depending on what’s going into it, where it is, whether it’s touching other plants, whether your grower is a maroon, etc. But it’s a safe bet that each plant can produce $2500 of product, based on the $8 a gram that Aphria sells for, and the $2 per gram they’re spending to grow it.

All of these numbers are, for the record, bullshit numbers. It’s just not possible to get an ‘average’ yield, price, plants per square foot, costings and the like with companies varying so wildly on all of the above numbers, bullshitting wildly when talking about them, or hiding them to cover copetitive disadvantages. But even if you swing my numbers 25% in any given direction, you still have way more revenue coming into an LP that is growing full mature plants and selling the flower etc, than you will in selling clones to Mom and Pop Stonerhead.

And cloning isn’t the best plan for building a future empire to begin with. Each clone loses a little as they go and the plants themselves are inferior to tissue cultured or traditionally propagated plants. The DNA is consistent, but that’s the case with commercial bananas, and that’s left that industry very susceptible to disease and plague.

So I don’t like THC BioMed. Not at a $100 million market cap, anyway. At $30 million, sure. $40 million? Maybe. But $100 million worth of $20 clones is 5 million plants, grown, wrapped, shipped, and that’s before we even talk about growing costs. It’s going to take a long time for that business to do that sort of business, and the moment someone comes along with a big, legal seed mail order business, the whole thing is fakakta..

Next.

— Chris Parry

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5 thoughts on “Why I don’t like THC BioMed (THC.C), AKA The Clone Wars”

  1. Looks like you are biased and won’t allow relevant content to be posted in the reply / discussion either. I had respect for your commentary until now. Do you need to be paid to post the truth or facts?

    1. Not at all. I think you’ll find that we moderate comments from people who have never commented before, so you may on occasion need to wait an hour to get yours seen. Tough life.

  2. Let’s not forget this isn’t there only operation. They have 29 strains of flower.

    I have no proof but, with their breakup with Supra and the fact that they’re only one of three LPs selling clones, they’re setting themselves up to be bought out by a bigger player.

  3. The shipping , packaging , handling , are not included in the 20$ sale price… I ordered two days ago and it cost and average of 43$ per clones with shipping and packaging

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