HEXO Facility Tour

by CytochromeP4 HEXO is Quebec’s largest licenced producer and the first Canadian licenced producer to offer active dried cannabis power and sublingual cannabis oil. Their Gatineau facility is projected to reach its full 108,000 kg of annual production, with a 1 million square foot greenhouse expansion by the end of 2018. The first crop expected to be harvested before Ontario brick & mortar opens their doors in the Spring of 2019. The current facility is comprised of the original greenhouse retrofitted for cannabis and new, purpose-built greenhouses divided into several sections. The sections are divided to allow for plants in one section to be…

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Cronos – Structure and Current State – 08/18

I've only had a cursory glance at Cronos in the past. It's not because I'm not interested, Mike Gorenstein has given an in depth tour of his facilities to /r/TheCannalysts. I've levered off of /u/GoBlueCdn's efforts so far, but it's time to have my own look at the financials, and see what stands out.Right to it.....$90MM in facilities/PP&E, $75MM of that in progress. Huge buildout under way....execution and project delivery critical.Intangibles/goodwill at $12MM, mostly HC licenses. Fashionable for earlier in-sector entrants, demonstrates how much resources were required in the early days. Minuscule compared to WEED, who I recall is around $480MM.G&A relatively steep, but…

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CannTrust – Structure & Current State – 08/18

Cash is deep and holding. Run rates consistent with build.Build assets accumulating. Straight line.Selling and shipping costs accelerating. Inelegant at this stage.Salaries & G&A & those pesky shipping costs above taking flight.Good positioning in net income. Despite the hiccup in costs, they appear to be tracking.Nothing too exciting in optionality struck.If I’m happy to see $300k of intangibles, it’s because future payments (offset) is linked to performance, and is entirely based upon genetics acquisition. Like walking out of a fresh shower compared to much of the sector (Note 9. Can be used as a benchmark against other in-sector intangible bookings).ST investments all in GIC’s.Mortgage…

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Decoupling

This seems as timely as 'it' can be. I’ve been watching for ‘it’, and even saw a few moments in early summer I thought 'it' was beginning. ‘It’ is ‘decoupling’. It means that correlations are breaking down. Some of our longer term followers might have noticed me moaning about unity in cannabis stocks over the past year here and there. And honestly, I expected 'it' to be happening a quarter or two back. 'It' really hasn’t started to firmly emerge until now. That the correlation in share price movements has been relatively the same - has been a low level frustration for me. Because…

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Supreme Cannabis – Structure & Current State – 09/18

Well, another day, another year end.Supreme's declaration of record sales caught my eye, because while top line handwaving like this typically is something positive, given they've had almost an entire year of quietly producing/refining, I'd expect exactly what they announced. And I'm far more curious about the optionality and SBC they've got tied to their ass.24% gross margin reported, inelegant. I'll leave the GoB unwinding to Blue, but.....I have a feeling what'll come out of it.$5.5MM in SBC (ka-ching baby), and another $10MM in G&A and wages.Wrote up an 'investment' in a software company by a million. Looks like they got a mark1 ,…

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