TREND Analysis – Hexo: “Gas in the Tank”

Hexo, like Aphria, does not break Inventory into Work in Progress or Finished Goods in their notes or MDA. Hexo always had minor Medical sales and was looking to adult recreational to be their core business. Bio Assets has been growing the last two Q's, and Inventory has certainly also shown growth. Inventory, like Aphria, is very linear but it is tough to tell if they will be able to keep up the sales pace without knowing the FG available for sale.. The Sales delta is exceeding the Inventory Delta in the last Q.

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TREND Analysis: Cronos “Gas in the Tank”

Nice to see the other analysts are catching on to the Finished Goods and throughput issues we have been talking about since mid-February. Cronos started the present Q with far lesser Finished Goods Inventory than the preceding Q. Last Q (Q0-1) they entered the Q0 with Finished Goods Inventory greatly surpassing their Sales for Q0. We noted that their decrease in FG Inventory of $10.1 million far outstripped their sales for the Q of $5.6 million, likely meaning a writedown in inventory. I would cation readers that if there was a writedown the previous figures Qs of inventory and bio assets are likely overstated.…

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TREND Analysis – CannTrust: “Gas in the Tank”

I thought it would be good, given TRST gave Q3F19 guidance yesterday, to put up the Trend Analysis for TRST to see how much "gas they had in the tank". TRST gave guidance that they harvested a good amount of product in Q3 [not graphed above], their GM % will rebounding to a figure higher than the previous 3 Q's and negative EBITDA was sliced in half. (These positives went to battle with the equity raise bouncing the stock price around considerably yesterday.) Yet TRST share a similar deficiency to a number of the other LP's... being their FG Inventory is considerably below sales…

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TREND Analysis Tilray – “Gas in the Tank”

From their Notes to Financial Statements: Inventory is comprised of raw materials, finished goods and work-in-progress such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis including but not limited to labor, utilities, nutrition and irrigation, are capitalized into inventory until the time of harvest. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Cost includes expenditures directly related to manufacturing and distribution of the products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead…

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Organigram Q2 F2019 Rundown – Feb 28, 2019

Just thought I’d give a shout out to Paolo Deluca OGI CFO on the great disclosure in the Fins and MDA.  Other LP’s should take notice. Open up the fins and MDA and follow along. Sales: What do you do if you start the Q with the highest Finished Goods Inventory in the industry, and the retailers are screaming for product??  You sell through!! And that is what OGI did in spades, increasing sales QoQ by 115% fully powered by Rec as Medical took a small step backwards with a 9% and 24% drop on Medical Oil and Flower, respectively.  This was overpowered by…

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