When a cannabis company loses a lot of money every quarter, and has to sell real estate, cancel acquisitions, lay off staff, renegotiate existing financing to higher interest rates and offer stock to new financiers at a discount to the market price, all to stay afloat, one might expect their newsflow to show bold new moves, innovation, maybe some hard austerity decisions.
Like the old Twilight Zone episode where helpful aliens leave behind a book called 'To Serve Man', only for us to find out later it's a cookbook, investors have been welcomed and fattened up nicely by alpha predators as they unwittingly await their slaughter, not realizing that, they're at the predator's table because they're the main course.
If you've been around this joint for a while, you'll have seen us arguing folks would be silly to invest in MedMen (MMEN.C) if hanging on to your money is a thing you aspire to do. That's not because we have a hate on for the dude-bros running the show, or because they're not a client, or because we're short sellers, or any of the other 50 or so reasons MedMen homers have thrown at us over the last few years as a rationale for us not seeing the company in the same rose-coloured way they do. It's because MedMen is, and has always been, shit.
Gaia Grow Holdings’ (GAIA.V) hemp clean bill of health provides optimism in an industry starving for good news
The cannabis markets are sorely in need of some good news and better business practices. But if there’s a silver lining to all of this graft and double-dealing, it’s that in a market full of liars, cheats and thieves, the good companies doing good business have the opportunity to stand out.
So the braintrusts over at MedMen (MMEN.C) have devised a new and novel way to staunch their company’s steady and consistent bleeding: they’re going to lay enough people off that they reduce their overhead to a sustainable rate.
Cresco Labs (CL.C) and Origin House (OH.C) have updated the terms of their $1.1B acquisition, repricing the all-stock transaction to match declining share prices since the deal’s announcement in April.
“Fiscal 2019 was a transformative year for Medmen, with over two million completed retail transactions to date and revenues increasing 227% year-over-year,” said Adam Bierman, Medmen co-founder and chief executive officer in a news release that should see the company gutted on the markets Tuesday.
Sometimes a deal broken is a good deal for shareholders, especially if you give a red rat’s behind about your favourite company having enough money to survive the year. Lately, we’re seeing a lot of deals that, at one time, were announced with much fanfare, being quietly dropkicked off the bridge as once high flying companies realize they need to make more than they spend.
In late August, Jim Cramer, host of CNBC’s Mad Money program, said he believes Cronos Group (CRON.C), and Aphria (APHA.T) are better investments than Canopy Growth (WEED.T).
The cannabis space in 2019 has proven to be a capricious landmine where greedheads and criminals shortchange long-term prosperity for short-term gains, and the loser in this gambit is invariably you, the investor.
Marijuana Update: Ravenquest (RQB.V), CROP (CROP.C), Lifestyle Delivery Systems (LDS.C), iAnthus (IAN.C), and trust
The ability to trust the people you put your money into is of utmost importance. ‘Management’ is oft cited as one of the pillars of a company’s success, but management in this instance could also be defined as ‘trust’.