RE:My rough mathThanks for taking the time to post this Solarcradle - Great to have someone elses numbers and thought process to compare to my own. Here's the figures for trim and flower you're looking for, right from the earnings report.
Use of Estimates:
Determination of the fair values of the biological assets requires the Company to make various estimates and assumptions. The fair value of biological assets is considered a Level 3 categorization in the IFRS fair value hierarchy. The significant estimates and inputs used to assess the fair value of biological assets include the following assumptions as at December 31, 2018:
a) Selling prices – selling prices are based on the Company's actual historical average selling price per gram for the preceding nine months.
Selling prices average $6.43 for cannabis flower and $2.39 for cannabis trim. solarcradle wrote: Taking Q3 Financials into account using only 90,000 sqft as of Sept 5, 2018.
On Jan 15, 2019, I was told by IR that the licensed rooms totaling 90,000 sqft have been in operation since the fall and have each had at least one full harvest, and that it takes approximately 2-3 months then each flowering room will have had a minimum of one harvest. It seems that a lot of revenue from this increase of grow space will push into Q3 financials on May 13, 2019.
7Acres' annual run rate was approximately 1111 kg per month/13330 kg per year on 90,000 sqft of licensed space, upon licensing by Health Canada on Sept 5, 2018. 8 months have passed since they were licensed to grow approximately 1111 kg/month. Let's start with conservative math and guesstimate under the assumption that one full crop cycle under utilization of 90,000 sqft has existed at 7Acres for 5 months. Let's assume that they didn't experience one full cycle of 90,000 sqft until Dec or get to sell much of the newly licensed grow space product until after Dec 31 - Q2. To be even more conservative, we will also take all of Q2 revenue and subtract it from the Q3 estimate.
Numbers are based on reported approximations for only 90,000 sqft of grow space:
13330kg x $6000 per kg = $79,980,000 /yr
$79,980,000 / 12 months = $6,665,000 /mo
...another way to look at it...
13330kg / 12 months = 1,110.83333 kg /mo
1111kg x $6000 per kg = $6,666,000 /mo
$6,665,000 x 5 months = $33,325,000
$33,325,000 from 90k sqft (minus full Q2 Oct to Dec revenue) -$7,720,000 = $25,605,000
$6,665,000 x 4 months = $26,660,000
$26,660,000 from 90k sqft (minus full Q2 Oct to Dec revenue) -$7,720,000 = $18,940,000
Keep in mind that Supreme may have been on the ball and started growing in the full 90,000 sqft since say Sept 2018, and sold two full crop cycles up until March 31, 2019. I doubt this is the case. If we look at the higher end of approximations and take a ballpark from Sept 5 to March and assume that a very small amount of that was on Q2, Oct-Dec end, Supreme might end up with 5-6 months of revenue on the 90,000 sqft.
I wonder how much Supreme sells trim for? That revenue was not included in these estimates
Reminder: These numbers are rough and flawed in my estimations, and only account for 90,000 sqft of grow space licensed by Health Canada since Sept 5, 2018. Who knows what Q3 will bring!? It all depends on how fast 7Acres rolled out after receiving 90,000 sqft to grow on, if it was a 2 or 3 month strain and how long it takes for testing and whatever else before the product hits shelves.
Sureme went from approximately 10,000kg to 13330kg/yr, which is 833.33kg and 1111kg monthly. In Q2 Supreme reported $7.72m. $7,720,000 / 6000 per kg = 1286.67kg, and some of that may include trim sales. So, where's the bulk of the 90,000 sqft? :) I think it's coming in Q3 and onward.
Thoughts?