RE:RE:RE:RE:RE:RE:RE:Q3 The only real defence here is between April - June is when rollout was occuring for multiple provinces and products. So there were sales, inventory, and advertising expenses who's returns have yet to be realized, which would also explain why revenue was flat.
It would be really nice if Paul or their CFO did an actual long interview and updated their strategy for where things are going rather than brief 6min video clips about product launches that don't actually hit shelves until several months later, usually well after projection. Example: Softgels were announced in April as available this summer. The most current financials now say they'll hit shelves this fall. What happened between May-August that this product launch fell apart?
https://www.nextleafsolutions.com/press-releases/nextleaf-to-launch-glacial-gold-softgels-and-provides-corporate-update/
Clarification would be nice on:
- Yes you're in Ontario, but only 2 products. If our relationship with provincial distributors is so great why is this such a small product offering?
- Neat that they have 2 anchor products that are supposedly tax free. Do they actually sell this product? If so, who's buying it and when are those revenues expected to appear in financials? Has there been pushback from companies who aren't biting on the tax-free claim for fear they'll get a call from the CRA/HC on the backend?
- What is the plan going forward for CBD. 0 guidance on this is provided in the MD&A (other than they'll be selling through Mendo and GG) even though at the moment this product is their best investment case for international sales and non-regulated stores.
- They're not hemorrhaging money to the degree other cannabis companies are, however they also don't have the warchest those companies had. Nextleaf is playing with fire with their current cash on hand, they're unlikely to go under in the immediate term but they are dancing with blowing up their share structure on another poorly thoughtout financing.
- Give solid numbers of what sales revenue is through each distributor. Percentage is fine. Every product is announced as available nationally through Mendo. Okay, how much revenue is Mendo generating? I suspect this information is obfuscated because GG is almost entirely BC retail sales. There is no data on the size of Mendo's customer base.
What is being communicated through PR is not materializing in the real world. The vapes are never listed as the most affordable. Are they supplying someone who's undercutting their own products? That would be wild.
They announced a record bulk distillate sale 100kg in June 2022. Concentrate sales for the Q were ~$425k. If that one months sales doesn't happen bulk sales are effectively 0.
They have a lot of good things going for them if they can navigate the market well in the coming months, this is not a eulogy. They can run this thing into the ground though if they don't start making real headway and capitalizing on their opportunities and advantages.