RE:RE:RE:RE:RE:RE:RE:financial reportI don't want to come down are on the new guy, he is still green, but he has all the markings of a basher at least from the 4 posts he has made since creating his account this month. Please do us all a favour, head over to SEDAR and read cover to cover the whole MD&A, it is all right there for you. But I like reading it again myself so here are some choice nuggets.
The integration of Alta Supply and RVR will give CannaRoyalty a cannabis distribution and logistics
network in the world’s largest regulated cannabis market. Together, these businesses generated revenue of US$31.9 million in 2017 Because closing of the Company’s acquisitions of Kaya and Alta took place in the final days of Q1 2018, the Company did not generate material direct revenues from the sale of CR Brands products. We expect the combined manufacturing revenue from Kaya will drive substantial quarter over quarter growth through the remainder of 2018, starting in Q2.
Combined, Kaya and the former manufacturer of Bhang® edibles produced approximately US$8.0 million in wholesale revenue in 2017.
From the Floracal news release
- FloraCal flower occupies an ultra-premium place in the California market, with THC numbers testing up to 33% and an average selling price of over US$17.00 per gram
- US$6.4 Million in Revenue in fiscal 2017 from 15,000 square feet1
- US$3.2 million in EBITDA in fiscal 2017 and US$2.6 million in net income in fiscal 20171
- FloraCal has market leading flower and pre-roll branded products (52%2 of California market comprised of flower and pre-roll)
- Substantial expansion potential, targeting 3,700 kg of annual craft cannabis flower capacity from build out to 42,200 square feet, growing to 5,500 kg once planned expansion to 64,200 square feet is complete
And how about this juicy piece of bud right here. One of the initial investments back from when CRZ knew exactly what the hell they were doing even before they took control of the California market.
As at March 31, 2018, CannaRoyalty held a 26.5% equity interest in Resolve which represents significant unrecognized pent-up value. Resolve closed on a private placement equity financing on March 2, 2018 for gross proceeds of $1.9 million from the issuance of 1,290,500 Class A common shares at $1.50 per share. CannaRoyalty owns nearly 14.2 million Class A common shares in Resolve representing an implied value of approximately $21.3 million in comparison to the carrying value of the investment of $3 million. The Company is considering the disposal of its equity stake in Resolve in keeping with its objective of liquidating non-core assets which could unlock significant value for CannaRoyalty shareholders. I read that and interpret it as being a $21.3 million holding which Mark will likely liquidate in order make acquisitions more in line with their current objectives. No need for any more capital raises.
Further down in the analysis it is mentioned in passing that the company may reduce the instance in which shares are used as equity for future deals. Mark is accutely aware of his shareholders interest and is running the company very well. All flows are explained in the MDA even making note that EBITDA loss only increased a half million dolars, which is exceptional considering the growth that has taken place in the past year.