When cannabis companies first appeared on Canadian public markets, it was all about cultivation, the bigger the land package, the higher the market cap. Didn’t matter that the market hadn’t developed yet, it didn’t matter that most of the projections were off-your-rocker optimistic and it most definitely didn’t matter if you didn’t turn a profit. Shell companies that once lay dormant found purpose and promised the biggest and best crops money could buy when and if they got their license. Market caps climbed into the billions based on millions in revenue, but no one considered fundamentals in legal cannabis.
While the rest of the market loses steam and the overvaluing comes back into line with revenues, many retail investors are left holding the bag due to a laundry list of bad business decisions made by people who consistently see value where there isn’t. Brayden Sutton isn’t one of those people. Sutton made a name for himself with Supreme Cannabis before moving on to Nevada to found what would become 1933 Industries (TGIF.C). Instead of propelling the company forward with debt-fueled growth over top of a blood red bottom line like everybody else in the sector, 1933 focused on fundamentals in legal cannabis, building a business organically that is steadily heading toward profitability.
1933 Industries wasn’t celebrated for this dovish approach and in fact was punished on the boards for being responsible stewards of their shareholders money. Canopy Growth’s (WEED.T) and Aurora Cannabis’ (ACB.T) financials are embarrassing to say the least. They show little or none of the value promised in the heady days of 2017 and still company execs from companies like MedMen (MMEN.C) receive massive bonuses. 1933 was dissed for keeping its nose clean and pressed against the grindstone but now it seems to have the value the big guys missed striving for their billion-dollar market cap. Looks like fundamentals in legal cannabis aren’t to be ignored. Equity.Guru’s own Chris Parry spoke with 1933 Industries CEO, Chris Rebentisch, to get a good look at the company, its pursuits and what investors can expect in the new year. Listen in!
Here is 1933 Industries’ latest corporate video:
Full disclosure: 1933 Industries is an Equity.Guru marketing client