LDS: Next Two Days are KeyWe all know the story now, thanks to Chris Parry's piece yesterday.
Canaccord told us they have their portion of the financing in place, they are spending Tuesday and Wednesday in California at the site, meeting with all of the execs there, for a physical inspection
I can only assume that the next 30 hours are critical for getting Canaccord over the line. As final due diligence is completed today and tomorrow, and progress in this regard starts to leak out, we should start to see a reaction in the market. Keep in mind the 3 hour time zone difference relative to those on Eastern Standard time. Market close is only 1 pm local time in Adelanto.
The bids are well supported at ~C$0.50/sh now and assuming word starts to leak that the due diligence is going well I would expect the price will start to move up into the close. If, however, word leaks that Canaccord lawyers are struggling to get there, we may see another bout of weakness and a drop to the 40's due to uncertainty until another financing can be pulled off.
Unless anyone here is very well connected, I would expect the market to be the one that tells us how this goes.
We went back and retrofitted our building for the green building code, title 24, to do with insulation, power, type of lighting in the building, etc. We went back and handled that, and it’s now all completed, and we’re looking at this month for our final inspection for the manufacturing side.
So they basically retrofitted the building to the strictest code around to ensure they were in compliance starting 2018. If you combine the above statement with Danny's quote (below), I can only assume that extraction and production of CannaStrips is starting by end of April or early May at the latest.
Aspects of the building that will produce CannaStrips and Extraction / Manufacturing work will be ready to go this month. Other aspects of the business associated with growing, cultivation, etc. are likely two to three months away
I personally found the quote below to be the most compelling in the article for anyone who has at least a medium-term time horizon (6-12 months).
90% of the companies in California’s market would not pass this due diligence, because most of them are not operating under the laws as they exist now. We’ve gone way overboard as far as the regulatory side, in anticipation of what’s coming, because if you’re not compliant now, you won’t get a license next year. Our competition is going to disappear, to a great extent, when the new rules emerge.
Assuming this is true, LDS will be perfectly positioned to serve the large California market (both medical and recreational) starting 2018 while 90% of their competition will be in the process of being shut down by state authorities for non-compliance. Even if half of existing competition becomes compliant by end-2017, this is still a very compelling growth story.
~S