RE:RE:RE:RE:Eight Capital comments on Aleafia Health Inc.sotypical wrote: they claim they will be producing 138000KG of weed that would be around 800 million in revenue not 84 million but I dont like the fact they have given themsleves the freedom to issue as many 28 million stock options;;;;;
sotypical wrote: alef I thought would have much more revenue in 3 years than what 8cap says? also alef has 354 million shares issues and at 84 million rev x10 is only 2.30 per share
if you assume a selling price of 6.00 a gram then you'll get what you specified, yes. There are a lot of unknowns, the cost of production, whether they sell in bulk or not. They are selling to Canntrust about 17.5 Mg, I suspect the rest of it when it comes online will go towards about a 50/50 mix of derivatives and flower. I don't know how much of it exactly will be rejected due to quality standards either. Based on this
estimated cost of production cannibis you can expect around $238 dollars of costs for the initial harvest, which decreases to around $68 by the third harvest. Oils and derivatives sell for about $15 per gram equivalent, $5-$6 is a good estimate for flower. So by the end of the summer, since their actual licensed production capacity as of today is around 15,800 KG, you're looking at around 10 million in revenue for flower, 30 million for derivatives. If they only sell flower of course then it is around 20 million revenue for this quarter for flower. Cost-wise taking the greenhouse $0.90 average cost of greenhouse production (much lower for outdoor, but this is a number). around 3.5 million cost of production, so a net conservative estimate for this quarter is around 17 million of revenue - cost of production.
So if you mulitply the 20 million per quarter you get around 80 million, which seems to make sense in terms of the revenue projections of citadel. That means that they are assuming a 100% failure for aleafia to deliver anything new of substance, aside from growing what they are already licensed to grow, meaning the 2.30 price target is more like the fair value of today, if you are basing stock value based on actual earnings potential that is feasible as of today.