Enjoyed the writeup. I did work on the company earlier in the year and really wanted to buy, but couldn’t get over one thing - cannabis is a commodity (in my opinion). Even brands that have positioned themselves as premium (Stiizy, Cookies, etc) have seen prices come down over time. Though some brands do carry a little bit of weight, pricing is both decreasing and becoming increasingly homogeneous. As much as I like management and am impressed by the positive cash flow I couldn’t get over this. Obviously you disagree - would love to hear why
I agree that cannabis flower is a commodity in the current environment. However, this is the key input in the wax/vape/concentrate inputs and this product in particular faces competition from the illegal market. Therefore, the flower will compress faster than the concentrates from a pricing standpoint.
I think that CANB is well positioned as long as they don't go outside of these highly regulated areas, which Travis definitely seemed to realize this key advantage to maintain the company's margins
I should mention this includes in concentrates. Two different operators in my area have recently dropped prices by ~10% on concentrate products within the last month
I can see that there is still competition in this area. However, I would imagine if you check the inputs for the COGS then those would have decreased much more than 10% over the corresponding timeframe.
That delta is what interests me. You are right thought that there are still tons of players, shown by the market share chart showing the Dab-Bod position in BC and Alberta
My concern isn’t necessarily the competition but the lack of differentiation. Quite frankly brand loyalty is (or at least seems) minimal at best and switching costs are nothing. Really interested to see if anyone can actually develop brand loyalty and how the space develops in general. A company and space definitely worth tracking in my opinion (for whatever that’s worth). Again, great writeup!
Thank you Vinh! Definitely excited about my additions to this stock today. Think they will do well in the future and offer very little in the ways of downside. Size appropriately.
Yeah, you had me guessing yesterday, looking at Kyle Grieve portfolio and I guessed wrong and ended up waking up early and doing research and invested a very small amount on Thermal Energy International instead lol. Will do my due diligence on CANB now.
From the DD I've seen on Twitter, Thermal seems like they'll do well. It's just not my cup of tea that I prefer with mine.
This one won't be a Celsius with it's growth or anything but buying so incredibly cheap with as little Capital Expenditures as this one needs, you're buying a mid-teens trailing FCF business that is still pretty early in their growth curve and nothings priced in.
Could double in next 2-3 months. Could take 2-3 years. Travis gave a presentation recently saying he has 9 M&A targets on his desk, 3 serious options. So I'd expect a big 2024 from an Operations perspective. Since you commented, you get that information for free ;)
Solid write up. Being from the US Grown Rogue (GRUSF) is on my radar. Paul also mentioned this one on his The Investors Network Podcast. Seems like an unloved category that has some hidden gems.
Enjoyed the writeup. I did work on the company earlier in the year and really wanted to buy, but couldn’t get over one thing - cannabis is a commodity (in my opinion). Even brands that have positioned themselves as premium (Stiizy, Cookies, etc) have seen prices come down over time. Though some brands do carry a little bit of weight, pricing is both decreasing and becoming increasingly homogeneous. As much as I like management and am impressed by the positive cash flow I couldn’t get over this. Obviously you disagree - would love to hear why
I agree that cannabis flower is a commodity in the current environment. However, this is the key input in the wax/vape/concentrate inputs and this product in particular faces competition from the illegal market. Therefore, the flower will compress faster than the concentrates from a pricing standpoint.
I think that CANB is well positioned as long as they don't go outside of these highly regulated areas, which Travis definitely seemed to realize this key advantage to maintain the company's margins
I should mention this includes in concentrates. Two different operators in my area have recently dropped prices by ~10% on concentrate products within the last month
I can see that there is still competition in this area. However, I would imagine if you check the inputs for the COGS then those would have decreased much more than 10% over the corresponding timeframe.
That delta is what interests me. You are right thought that there are still tons of players, shown by the market share chart showing the Dab-Bod position in BC and Alberta
My concern isn’t necessarily the competition but the lack of differentiation. Quite frankly brand loyalty is (or at least seems) minimal at best and switching costs are nothing. Really interested to see if anyone can actually develop brand loyalty and how the space develops in general. A company and space definitely worth tracking in my opinion (for whatever that’s worth). Again, great writeup!
Great writeup as usual!. Thank you
Thank you Vinh! Definitely excited about my additions to this stock today. Think they will do well in the future and offer very little in the ways of downside. Size appropriately.
Yeah, you had me guessing yesterday, looking at Kyle Grieve portfolio and I guessed wrong and ended up waking up early and doing research and invested a very small amount on Thermal Energy International instead lol. Will do my due diligence on CANB now.
From the DD I've seen on Twitter, Thermal seems like they'll do well. It's just not my cup of tea that I prefer with mine.
This one won't be a Celsius with it's growth or anything but buying so incredibly cheap with as little Capital Expenditures as this one needs, you're buying a mid-teens trailing FCF business that is still pretty early in their growth curve and nothings priced in.
Could double in next 2-3 months. Could take 2-3 years. Travis gave a presentation recently saying he has 9 M&A targets on his desk, 3 serious options. So I'd expect a big 2024 from an Operations perspective. Since you commented, you get that information for free ;)
I appreciate it man!
Solid write up. Being from the US Grown Rogue (GRUSF) is on my radar. Paul also mentioned this one on his The Investors Network Podcast. Seems like an unloved category that has some hidden gems.
I’d definitely agree! Need to follow up and research Grown Rogue. Appreciate the reminder on that one🙏