There is an obsession with Sundial Growers (SNDL) among traders. The stock is up 140% so far and I think the only reason is that it is a low-priced cannabis name that can be traded in all brokerages.
Traders consider it “cheap”, despite the billion-dollar market cap. This is the same company that was sued because it did not disclose that the product was returned to it because it contained mold and pieces of rubber gloves.
Many times I made fun of Aurora Cannabis (CBA) because it emits actions as if they were candy. Sundial Growers becomes the answer “keep my beer” at Aurora. Drowning in debt, Sundial used every pop of his actions to issue more and more shares. They have exceeded the number of billions and I am not sure there is an end in sight.
The company is making the transition from wholesale cannabis to retail, but this is hardly unique in the industry. In fact, the sundial is behind many competitors in this regard. It hit them hard, as net sales fell sharply by 46% year-on-year.
The Twitter guru leading you to this action may not recognize it, but in my opinion it is a pump and a discharge. Ironically, this can save the company, as it has a stronger balance sheet, but with a valuation of over $ 1 billion now, there are much better places where an investor can put their hard-earned money, whether they want a aggressive or moderate name.
Village Farms (VFF) should undoubtedly be the top name on everyone’s list when changing something in place of the sundial. The fact that these companies have the same market capacity is absolutely ridiculous. Village Farms offers the lowest production cost, owns 100% of Pure Sunfarms, owns a huge greenhouse in Texas, ready for CBD production when it is legal and has international coverage. They also have sales three times higher than the sundial, they are positive and profitable cash flows. Now tell me again why your guru bought you a sundial?
Buy a multi-state operator. Which? Almost anyone. Cresco Labs (CRLBF), based in Illinois, is at the top of my list. At a market cap of about $ 5 billion, you get King Illinois cannabis. Spread over nine states, with 15 production facilities and 20 dispensaries, Cresco has one of the largest footprints in the United States. They reported revenues of over $ 150 million in the last quarter alone, along with profitability.
Trulieve Cannabis (TCNNF) is another alternative. $ 136 million in third-quarter revenue came just below Cresco, but the Florida-based cannabis company produced stronger EBITDA. And I wouldn’t blame anyone for going with Green Thumb Industries (GTBIF) or Curaleaf Holdings (CURLF).
The easiest thing to do would be to buy Advisorshares Pure US Cannabis ETF (MSOS), which will provide you with all the above stocks plus another 25.
For those people who want to stay on the aggressive side, two smaller aspects are Juva Life (JUVAF) and Cybin (CLXPF).
Juva
Juva is a vertically integrated cannabis company in California. Its CEO actually received the first license granted in the state. While the cultivation, processing and sale of cannabis through retail and distribution will create a nice revenue stream, Juva takes less travel, which should lead to huge profits for shareholders in the future.
Juva will combine IRB-approved investigations with research-based patient research investigations, along with verifying the integrity of the product through a network of doctors and clinics, along with its own $ 5 million, $ 5 clean room.
This will not lead to phase I studies with the FDA. Instead, Juva will gather a lot of data reported by the patient. These results reported by patients on precision cannabis products formulated by Juva will allow the company to show that X product used by patients with Y generated Z responses / results. The most common goal / objective for Z is to reduce a symptom by a specific percentage.
For example, let’s say I reported a daily pain level of 7 on a scale of 1 to 10 before I started using a specific Juva cannabis dosage / accuracy formulation. Then, after using that product for three weeks, I reported a new pain level of 2 on the same scale, something that is not worth anything. Now imagine if 10 people or 100 people or 1,000 people reported similar results. No, Juva can’t make a medical claim, but she could say something like, “Well, Mr. or Mrs. Patient, 85% of people with similar symptoms have reported a reduction in pain using this specific cannabis strain. “
Short-term result: working with doctors, Juva can guide customers in the direction of the strains based on the results reported by the user. The long-term hope is that doctors will be more likely to adopt the cannabis recommendation based on real-world patient data.
With each patient report, the Juva dataset grows and we know how valuable data is in today’s world. This will help him build a commercial and valuable medical database. He could call on others in the cannabis world to partner with Juva and piggyback on this idea. Because large pharmacies will not risk studies or trials until a federal path is clear, the data they can get from Juva would give them a huge lead over competitors when the path is clear. The current study goals for Juva now revolve around inflammation, oncology, neurology, pain management and opiate reduction. Any possible opioid replacement would be a huge benefit to society and a huge financial risk to large pharmacies.
Cybin
If Juva is the less traveled road, Cybin is the new road under construction. Cybin does not work in the cannabis space, but rather in the next evolution of drug treatment, psilocybin. But we’re not talking about recreational use. Management is considered a life science firm. The company is currently focusing on the development of treatment regimens consisting of proprietary psychedelic molecules and the development of their delivery mechanisms, such as the company’s sublingual film and inhalation administration system.
Recently, the company announced that it will raise C $ 20 million. When the transaction ended, they brought in over C $ 34 million, consolidating an already strong balance sheet to one with over $ 40 million in books. And they will put this money at stake.
According to Cybin, the company plans to sponsor a phase 2a and phase 2b clinical trial in patients with major depressive disorder (MDD) later this year. The process will be conducted through the University of the West Indies (UWI) and will follow the guidelines of the International Conference on Harmonization (ICH) and Good Clinical Practice (GCP). By doing so, Cybin may use the data collected as a linking strategy to enter other jurisdictions, such as the United States, Canada and Europe.
If one of these cannabis companies were smart, they would catch Cybin before it became too expensive. With a market cap of just $ 300 million, I expect it to reach $ 2 billion before Sundial reaches it.
If the sundial were smart, it would end up in that jar of candy and offer Cybin between $ 500 and $ 700 million right now and turn into something that can compete against all of the above names. Until then, I would feel much more comfortable owning a mix of VFF, MSOS (or a few individual MSO names) and either JUVA or CLXPF long before holding a SNDL share more than a scalp transaction.
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