GREY:CHALF - Post by User
Post by
PortlandBlazeron Feb 25, 2022 6:25am
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Post# 34460626
Q4 exceeded my expectations
Q4 exceeded my expectationsFrom the Shareholder Letter a week ago, we know the September acquisition of Cannabliss is generating management fees only for CHAL while regulatory approval is pending.
That acquisition is expected to bring incremental revenues of more than $8 MM per year, based on acquisition cost of $6.5 MM and Price / revenues multiple announced at the time of 0.8x. (6.5 / 0.8 = $8.13 MM per year)
When that closes, and the approval by OLCC is not under the control of management, revenues should bump $2 MM per quarter.
From the Shareholder Letter, we already know that sales at Cannabliss of CHAL products have already gone from 5% to 30%, though we don't know if that is additive to Cannabliss revenue, or if it has displaced revenue from other suppliers' products.
Bottom line, when Cannabliss is fully integrated, revenues per quarter may jump up to $2 MM and gross margins will likely improve with the significant sales of CHAL's own brands.
I am excited to see how 2022 unfolds, with strong annual revenue growth, solid gross margins, integration of Cannabliss and the opening of the superstore scheduled for early in the second half.