Aleafia Health Inc ALEAF

RE:Mr.Optimization predicts we will see a profit

[MrOptimization]

And this is why I'm disappointed. At their low cost of production, they should be making a profit!

But this assumed that the margin between sales price and cost of production remained at prior levels. Reducing the price per gram in half reduces the positive margin

Even at the current sales prices and cost of production, there should be positive margin. So the loss is amplified due to their operational expenses (customer acquisition costs - marketing, commissions, R&D for new product development, head office expenses, etc..). 

The movement in the market today was anticipated after seeing their quarterly results. It's not optimistic, because even if they get a large supply, they will likely reduce the price to ensure a sale before the product has to be discared.

Demand should be at a high now for recreational users, so kind of disappointed not to see people willing to pay for quality cannabis. But his could be the governments plan, to reduce the retail price of cannabis to stamp out the black market.

CaptainCandor wrote:

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MrOptimization (10)

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March 25, 2020 - 09:38 AM

96 Reads

Post# 30844918

RE:Finished

This company won't go bankrupt. Their revenues exceed the cost of production/operations, so they will always have a profit. Their profit will also grow as time goes on, so they just need to weather this storm. If they have capital concerns, they will just issue more stock.

This stock will accelerate in price at some point in time (when other competitors become insolvent, and as their margin between sales price and cost of production continues to grow). I predict that acceleration in stock price will happen in 2020Q4 or 2021.