The Cannabis Bull Gets Back into Gear (PLNHF, SGMD, TCNNF, CRLBF)

One sure-shot bet on the future for investors appears to be in the cannabis space. No analyst out there seems to disagree with the long-run growth thesis driving the group. The only real issue seems to be about timing.

On that note, according to our analysis, the group reached a key “generational” low in March of this year when the coronavirus health crisis first began to pose a broad risk to the global economy – one that hasn’t been seen on this level for more than a hundred years, since the Spanish Flu sunk its claws into the economies around the world in 1918.

That catalyst appears to have capitulated a longstanding bear market in the cannabis space that got its start in 2018. The balance sheets have been tested at this point, and the steady legalization process appears to be still underway, suggesting that the double- and triple-digit percentage gain forecasts are still operative, which means right now may be an opportune time to get very interested in names in the cannabis marketplace – the herd has been thinned and what remains are the new leaders.

With that in mind, here are a few names to put on your list: Planet 13 Holdings Inc (OTCMKTS:PLNHF), Sugarmade Inc (OTCMKTS:SGMD), Trulieve Cannabis Corp (OTCMKTS:TCNNF), and Cresco Labs Inc (OTCMKTS:CRLBF).

Planet 13 Holdings Inc (OTCMKTS:PLNHF) just announced that it has entered into an asset purchase agreement pursuant to which it has acquired cannabis inventory, equipment and tenant improvements, and subject to regulatory approval will acquire the Nevada cannabis licenses at a 45,000 square foot indoor cultivation and production facility in Las Vegas, Nevada from West Coast Development Nevada, LLC.

According to the release, Planet 13 is paying $1.156 million for the cannabis inventory, and $3 million for the operating assets, licenses, equipment and tenant improvements which payment is comprised of $0.5 million in cash and $2.5 million of common shares in the capital of Planet 13, resulting in the issuance by the Company of 1,374,833 Consideration Shares based on a 10-day VWAP, all of which shares are being held in escrow until the Second Closing. The license transfer under the Asset Purchase Agreement is contingent on approval by the State of Nevada’s Cannabis Control Board, and upon receiving such approval the Consideration Shares will be released from escrow to WCDN.

Planet 13 Holdings Inc (OTCMKTS:PLNHF) promulgates itself as a cannabis company that cultivates, produces, and distributes medical and recreational cannabis in Nevada, the United States.

It also operates dispensaries that provide recreational cannabis, cannabis extracts, and infused products. In addition, the company sells its products online. It operates under the Medizin and Planet 13 brand names. The company is headquartered in Las Vegas, Nevada.

As a vertically integrated and established cannabis company in the Nevada market, Planet 13 Holdings, Inc. provides an array of cannabis products available through its licensed operations. Planet 13 Holdings, Inc. is focused on providing a dispensary experience and managing cultivation efficiencies through its technology. Planet 13 may be able to build on its position in the Nevada cannabis market as it seeks to expand its existing operations. In the Fall of 2018, the company was working to open a retail dispensary immediately adjacent to the Las Vegas strip.

The stock has been acting well over recent days, up something like 32% in that time.

Planet 13 Holdings Inc (OTCMKTS:PLNHF) managed to rope in revenues totaling $22.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 22.8%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($19.8M against $19.8M).

Sugarmade Inc (OTCMKTS:SGMD) is a cannabis player that operates now mostly through its controlling stake in BudCars, a leading California cannabis delivery company that operates on a traditional retail model with consistent 45-50% gross margins on cannabis inventory.

Sugarmade’s BudCars model has been feasting on increasing market share during the pandemic for obvious reasons: cannabis consumers can order their favorite products and have them delivered right to the door in touchless convenience. That dynamic has presented SGMD shareholders with a dramatic boom over recent months. Since Sugarmade took over control of BudCars in March, the outfit has posted 10% week-over-week sales growth basically at a minimum.

Sugarmade Inc (OTCMKTS:SGMD) just issued a mid-month performance update for the month of July, which is now on pace to set multiple new Company performance records for sales, gross profits, and total customer orders. As of July 14, the Company is now on pace to meet or exceed its target of $650,000 in total sales in July, with well over 5,000 individual customer orders likely this month, suggesting that sequential month-over-month topline growth will be at or above the Company’s target 30% level.

“Our BudCars Sacramento hub continues to demonstrate accelerating growth that suggests we still haven’t really found the ceiling here in terms of period-over-period upside potential,” commented Jimmy Chan, CEO of Sugarmade. “Ultimately, this is gratifying to see because we have taken a unique approach to retail cannabis product distribution.”

Sugarmade Inc (OTCMKTS:SGMD) has been posting major growth updates on a regular basis over the past couple months as its BudCars model takes apparent flight. The rate of sales growth expected from the company in 2020 has walked up a steep ladder, with the latest guidance suggesting we could see it north of $30 million in annualized sales by year-end.

Trulieve Cannabis Corp (OTCMKTS:TCNNF) promulgates itself as a company that, through its subsidiary, Trulieve, Inc., engages in the cultivation, possession, distribution, and sale of medical cannabis in the United States.

It offers a suite of Trulieve branded products with approximately 125 SKUs, including nasal sprays, capsules, concentrates, syringes, and cannabis flower in tamper-proof containers for vaporizers, topical creams, tinctures, and vape cartridges.

The company distributes its products to Trulieve branded stores (dispensaries) in Florida, as well as takes orders online and by phone for delivery. As of November 20, 2018, the company operated 21 dispensaries. Trulieve Cannabis Corp. is headquartered in Quincy, Florida.

Trulieve Cannabis Corp (OTCMKTS:TCNNF), which has been breaking out to fresh multi-year highs in recent action, just announced the opening of its latest storefront. Opening on Saturday, July 18th, the Port St. Lucie location will be the Company’s 52nd dispensary in its home state of Florida and 54th nationwide.

According to the release, located near the center of Port St. Lucie, the dispensary supports Trulieve’s goal of expanding and ensuring direct, reliable patient access to medical cannabis throughout the state. It also joins the Company’s 51 other Florida dispensaries, including those in nearby Fort Pierce and Stuart.

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Shares of the stock have powered higher over the past month, rallying roughly 15% in that time on strong overall action.

Trulieve Cannabis Corp (OTCMKTS:TCNNF) generated sales of $129.2M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 22.8% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($143.5M against $104.7M).

Cresco Labs Inc (OTCMKTS:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.

The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand.

In addition, it operators a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.

The company was formerly known as Cresco Labs, LLC and changed its name to Cresco Labs Inc. in November 2018. Cresco Labs Inc. is headquartered in Chicago, Illinois.

Cresco Labs Inc (OTCMKTS:CRLBF) just announced the opening of its eighth Illinois dispensary in the city of South Beloit, which is located near Highway 75 and visible from Interstate 90 by the Illinois-Wisconsin border.

According to the release, Sunnyside South Beloit is where cannabis meets wellness. The store aims to educate today’s diverse users on the many positive benefits of cannabis and provides one of the widest ranges of cannabis brands. A more sophisticated and familiar shopping destination that combines high-end design from healthcare, retail and hospitality, Sunnyside South Beloit elevates the value dispensaries can add to a community with a bright, welcoming aesthetic and convenient shopping whether in-store or online.

And the stock has been acting well over recent days, up something like 10% in that time. Shares of the stock have powered higher over the past month, rallying roughly 12% in that time on strong overall action.

Cresco Labs Inc (OTCMKTS:CRLBF) generated sales of $89.3M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 63.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($101.6M against $201M, respectively).

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Published at Mon, 20 Jul 2020 05:52:46 +0000

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