Inner Spirit Holdings Ltd. INSHF

Canabalizing themselves

[BUYING4ME]

Franchising was a mistake from a revenue perspective, but brilliant move to push SP well above what it's worth.

5% of revenue from franchises

1b in revenue from franchises = 50m in reveue for ISH

Canada is projected to do 5-6 billion a year, dispensaries get around 1/3 (the splits are shared between grower, province and sales point)

Let's just pretend (key word 'pretend') somehow ISH managed to do 5b in revenue, ie they capture the entire Canada market and create a monopoly

5b x 5% = 250m in revenue

Impossible for ISH to meet their marketcap

Nobody cares they're not spending money to make money, we don't invest in margins, we invest in revenue.  It's a fools game to concern yourself with how much they spend

Each franchise they get licensed it a death blow to the bottom line

20x franchises = 1 corporate license (5% x 20 = 100%)

so theoretically they'd make as much with 20 corporate stores as they would with 100 franchises, but that doesn't help push the SP up!

I they open 10 stores in city X, but only 1 or 2 are corporate, they're losing 95% of revenue each time customer X decided to visit the franchised location vs corporate