I’ve long known about Golden Leaf Holdings ($GLH), having been through their financials a couple of times in our Dive Bar Xmas Series.
It’s been years since then, and to my surprise, they’re still kicking. I usually don’t revisit something that was in the state I saw $GLH in (last I looked). I got a surprise when the company reached out to me and mentioned changes in management….. and stating they’ve been strengthening the balance sheet.
I had made reference to them in a recent post……that offered some related Cannalyst backstory.
In fairness, it doesn’t seem right to leave a 2+ year old (and rather savage) analysis laying around without a refresh. I’m not going to go deep right now (share price has been a flatline over 2020), and given 880MM shares in the float, I’m not sure how far they can move. But, any interest that may be in play in the wider MSO/US legal cannabis market has passed them by:
They’re small (annual run rate of $24MM). They’re in a market that hunts sales transactions like a starving man using a snare for the first time to catch a rabbit. SG&A exceeds gross margin. Still. Relative to others in the market (seriously, look at the pricing of $TRTC or $JUSH or $MRMD or $SLNG or $PLTH or $FFNT)….. does this make them worth 3 or 4 cents a share? I haven’t priced the assets, but by some simple measures, they aren’t expensive – relatively speaking.
If we’re going hunting…they look like game. I’m gonna run a Structure, but wanted to disclose position before I do. After seeing some of the claims I have from companies….the tone and tenor and admissions by $GLH of their past is seriously refreshing (there’s a mea culpa in their promo material that’s an exercise in self-flagellation). I am drawn to companies that communicate openly, that address issues directly, and are willing to speak about them in good faith.
Whether $GLH can ever become profitable is a different thing. For now, their market cap changes by $32MM $9MM for every penny change in stock price (yeah). But, they aren’t priced relative to sector. I opened a position on them after taking a quick pass through the last couple of financial statements. Really.
These kinds of positions aren’t for the faint of heart….and extremely speculative. Look at the Level 2 bid/ask….you’ll see for yourself:
Just full disclosure.
The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds position in $GLH.
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