Wildflower Marijuana (SUN.C) defies gravity again, up 49% on distro news

Excerpt from a conversation I had over text with Wildflower CEO William MacLean last October, after I dismissed the outfit as a non-player in a Medical Marijuana Update.

william maclean“Nice article and review. Should maybe perhaps check the social media feeds. We have been adding stores like mad over the last few weeks. The vapes are a massive hit. Reorders are coming in already and I’m now having to order massive inventory. High times, Dope and Leafly all went nuts for the technology. And our commercial kitchen is finished so now we have 6 more SKUs of products that will be hitting the stores in 6 weeks. Bro should have done a little due diligence or even picked up the phone. I’m not choked just trying to help you out. Either way it didn’t affect the stock. The sun is on the rise. Later buddy.”

“Hey man, I’m not going to call 42 CEOs every day to see if there’s any chris1news they haven’t told anyone. You’ve been on the vape kick for over a year now and there’s no sales figures out there, no indication except from your texts that any business is being done. If it is, great, but there’s a thousand vape plays out there and most don’t have your long financial road to phase I.”
“Vape plays don’t mean shit.  All those vapes are 15 yr old technology.  Ours is new technology and no one has anything close.”
“We had this conversation over a year ago though. What’s taken so long?”
“I’ll put out the press when we hit 30 + stores.  I don’t care about driving the price up.”
God damn it, I hate when a lippy CEO turns out to be right. The above conversation left me feeling pretty good about my call until about a week ago, when Wildflower Marijuana (SUN.C) suddenly took a right turn at the corner of ‘What The’ and ‘Fuck’, and went on the sort of stock price run that turns penny players into dollar movers.
Wildflower was a weed applicant back in 2015, and its share price was based almost entirely around a NIMBY-saddled LP application that never got off the ground on BC’s Vancouver Island.
But the company shifted focus to vapes when Health Canada gummed up the applicant works, a move the CEO said would be way better, and I clocked out because vapes can shampoo my crotch, as a general rule.
So when Wildflower moved from $0.15 to $0.30, I didn’t pay it much attention. I mean, everything in weed went from $0.15 to $0.30, right?
But then it went to $0.45. And $0.75. And, shut up – it passed a dollar just now?
I don’t understand this thing.
I called MacLean on Friday last and he gave me a line about it all being the perfect storm of events, rather than news, which I dismissed as pretty much bullshit.
Wildflower Marijuana Inc. (CSE: SUN) signs a wholesale brokerage agreement with one of the world’s largest retail brokers, making Wildflower the first cannabis company to transition from the specialized cannabis market to mainstream retail distribution.
Oh, I’ve heard this line before. Go on, tell me the details and let’s pick this shit apart.

Wildflower’s full line of hemp derived CBD+ products including CBD based topical, soaps, capsules and vaporizers will be distributed throughout the United States where CBD is legal in all 50 States.

Huh. Okay. Wildflower does have a bunch of products on its website, so that computes.

With 165 offices in the United States and Canada and employing 40,000 people, the wholesale broker provides Wildflower a large sales force to market and build out the retail distribution for its CBD+ products. As sales terms and conditions are set by Wildflower, including timing and pricing, and negotiated by the wholesaler with the retailer, it allows Wildflower to do a staged roll-out with an initial focus on health and wellness retailers to allow Wildflower to ramp up production and prepare for the larger national retailers.

Uh… That’s not terrible.

Wildflower is coordinating orders with its production capabilities. Production facilities are being expanded and streamlined in order to meet the expected demand. As the first cannabis company to make the transition from specialized medical and cannabis markets to mainstream retail distribution, Wildflower is preparing specialized marketing and educational tools for the sales force.

Okay, reality check time. Having a deal with an unnamed distributor doesn’t mean said distributor is going to make your products a priority, nor does it mean retail stores will order them. a distro that size will stock literally hundreds of thousands of products for sale, so Wildflower’s five are hardly the stuff of a $100 million market cap.
BUT:
With a stock price over a buck, if SUN can keep that price elevated for a while, it can justify a fat financing at a good $1+ level, and possibly raise enough cash to go on an acquisition spree. Even back in the dark days, I’ve always said Wildflower’s mania about creating a brand around their products was a smart one. They spent good money on their logo and website when others might have focused on product, and though it’s taken them a long time to get value out of that, they’re suddenly in a place where that branding can actually become something.
The financials are terrible, always have been. And the old LP grower application is long gone, which is a shame as now such things are worth a lot of money, if they’re advanced. And they won’t see any distributor coin for at least two quarters, so it’s tough to justify that current $63m market cap on reasonable financial assessments.
But if you’re a buyer of potential, regardless of how they got to this situation, SUN has some if they can avoid becoming a massive short seller target over the week to come.
I’ll be interviewing MacLean tomorrow on our podcast and will kick him around a bit, in between his “I told you so” bullshit.
— Chris Parry
FULL DISCLOSURE: Equity,Guru has no commercial relationship with Wildflower Marijuana
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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