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:

I began writing this on January 20th. $GLH has since released news about a private placement, a re-price of debentures, on the back of a declaration of being cashflow positive. Even if not positive in adjusted EBITDA after years of operation. Last fall….they had begun some of the heavy lifting that was required of them to remain viable.

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.