RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:News I tell ya, this smells severely fishy, you show up two days ago on a brand new account, directly come at only my posts. Maybe watch knows a thing or two.. All this is IMO, due your own dd! Smells like skunk in here though..
Hey Watch,
Thanks for the sincere rejection to my love letter wasn't a rejection, or i wouldn't of answered you. -- I was worried that my feelings wouldn't get through. Also, kudos on the solid performance. ty
My point is more that things are usually a bit more gray than we like to paint it. The affect of personal greed on operations is going to be proportional to how willing and comfortable employees / management are in pursuing that. This will come down to corporate culture, for one, but I have no evidence that it's as powerful a factor as many doomsayers make it sound.
It can be pervasive in a large company, with poor culture and limited accountability, but from the outside, Supreme seems to value their culture, brand and productivity. As a counter-point, the Omnibus Incentive Plan which will be voted on, is an indicator of a dissonance between how management sees their performance and how investors might see it. I'll hold on to my naive optimism with both hands for as long as I can stomach it.
"They should be and aren't.. make a hope and a dream Canada eventually will change laws, open stores and they can produce below black market, good question why they aren't downsizing and instead hiring people."
"these are long standing issues, most of them are impossible or nearly impossible to change, some with supreme only but numerous items are for LP's wide"
I have to break this down in parts so that I can hope to pick your brain a little bit about this. You've made a few statements/assumptions mixed up into there, so I'm just going to try and lay them all out:
1. There is no growth in the legal Cannabis market currently, or it's not enough to sustain current projections. Saturated, sizzling bacon grease before LP's showed up, stats and numbers are moving the fat over from the black market.
2. Regulators are not currently trying to figure out how to extract as much growth as possible out of this industry and eventually stamp-out a large portion of black market sales. Only stamping it out when prices not only go lower than black market, but also make the LP money too, with 1 distribution point recreationally and a plethora of middlemen and fees black market dont have (prov,munciple,fed,landlord,cannabis stamp,packaging,testing, income tax,cpp,ei,benefits,etc..) I am highly skeptical this will ever happen. This whole market existed prior to legalization with the promise from the feds black market was gonna get wiped out, from what you can see, only looks stronger than before legalization.
3. Canada is not already in the process of opening more stores. ? They definitely are trying, who knows when that will be done. Been hearing about this for months, wait a minute... years
4. LPs must produce and sell below black market prices. Definitely. The black market was stable and pre-existing. If you dont compete with competition weather you believe it is or isn't your competitor, you unforunately lose, let alone the other 200+ now current LP's.
5. There is limited upside from further developments in the legal cannabis industry. To each there own, could be, one day... i dont think anytime soon in canada at least. California has it figured out however health canada got involved in ours and will ever be jaded.
6. The black market is a problem. The black/grey market is.. grey being the medical licenses (acmpr pp license).
I actually added #6, to my surprise, while researching this post. I've gotten most of my numbers from https://www150.statcan.gc.ca/n1/pub/13-610-x/cannabis-eng.htm. All I've heard about is how the black market is proving persistant, but the numbers don't seem so glib. Were people expecting 100% conversion in only one year?
-In one year household expendetures for licensed non-medical cannabis has gone from $170mil/Q to $417mil/Q. That's an increase of ~145% in four quarters.
-Meanwhile, household expendetures for unlicensed product have gone from $1187mil to $860mil. That's a decrease of 28% in four quarters. I have no doubt that there will be people that try from the legal market, but it also acts as a catalyst that opens up those same consumers to purchase from the cheaper illict market. People are broke, it comes down to the black market being cheaper in the end of the day. The expenditures for unlicensed product is obivously done with a survey and that could widely vary and the household expenditure stat isn't a great gauge when the legalization only recently happened.
-The decrease in BM for the last quarter was ~6%, a slight decrease versus the yearly rate.
-Based on the last quarter's run-rate, non-medical licensed growth would still be 50% per annum, not accounting for the shifting trend.
There's no doubt that many companies have been too aggressive in trying to capitalize on this growth, definitely. but that doesn't mean the industry is in a sorry state and that there are insurmountable sector-wide problems. i disagree i think it is and before it gets figured out from the feds we will all be 6' deep and lp's long expired too. If john conroy wins the medical dispencery ruling you might as well close the door the next day. The conroy case is big however even in its infancy as it puts alot of the industry on hold while they sort through that. That potentially will take years and if the LP's are currently not making money, just think what another even 1 year will do to them. Do you not agree that Supreme's goal has been to try and tread a different path than the others? I think theres a few LP's in the same situation as supreme, in terms of quality and company focus. I prefer the hexo model in current conditions, race to your bottom, actually make some money with low cost product, selling mass product at a cheaper cost. I said this before, but people are cheap, yes its nice to have the high end, but unlikely affordable to the masses, and expensive to produce. You're talking about lowering prices to meet the black market, and Supreme just raised the price on their herb! (Not that I think that was smart. Maybe you'd call it a, "hail mary," even.) I think the reddit articles going on about this for hours is enough of a reason why that was a bad idea. But when you have nowhere to go but pricing it up, i guess thats what you do.
Supreme has taken a path that, at least on the surface, is built to minimize the risk to all these factors:
1. The Cannabis industry doesn't necessarily need to continue growing for Supreme to grow sales of their lines/products. Theres 200+ LP's now in the game just on the legal side, it definitely has to grow otherwise everyone pie shrinks.
2. Regulations are still being sorted out, but Supreme has been strategically reinvesting in their business for quality, not just volume. Are you a supreme exec?
3. More stores are still opening, but more important for Supreme is their ability to establish the brands and grow in-store sales to regulars.No, seriously are you?
4. The licensed and unlicensed markets are certainly different. I've been through different parts of the black market, and I will confidently only buy from reputable sources. I've seen far too many insects, mold, seeds, pesticide use and what-have-you. Not that this doesn't happen in retail, but all the more reason why there will be demand and growth for premium suppliers/growers. Considering the recent, "vaping epidemic," I'd especially rather not be smoking fungicide-laden cartridges that release cyanide into my lungs. I swear you have to be.. anyone reading this?
5. I don't know much about, "Cannabis 2.0," but Supreme and most Canadian LPs are global anyway. It's not like there's a lack of upside, if you have something worth selling. The edibles market your referring to is going to post less than 10% revenue. Lets watch and see..
6. As far as I could tell from your response, the main thing I could pin is your concern for the black market. Way more. Legality, overproduction, over taxation, slow store openings, capital expenditures, health canada involvement, packaging requirements, black market, grey market(acmpr pp licenses), production to current sales ratio, the list is literally a mile long and not things your everyday company have to endure. It may be a bit excessive for me to say that the black market is a non-factor, but I don't think it should be worth serious consideration. There are a plethora of benefits to the licensed market that, at best, only trickle down to the black market. I think it's a bit of a misnomer to say that, to succeed, LPs must capture ALL THE CANNABIS SALES. It's not a race to the bottom until somebody makes it that way. Black market prices have declined >9% YoY and a properly operated and licensed business will never compete with the black market.
Hope to hear your side to this & best wishes, merry christmas. hope your not too tied up in all this you seem like a smart guy.
-Dubby
Read more at https://stockhouse.com/companies/bullboard?symbol=t.fire&postid=30410912#8OeqiA4s70c3c6MT.99 DubbyTGF wrote: Hey Watch,
Thanks for the sincere rejection to my love letter -- I was worried that my feelings wouldn't get through. Also, kudos on the solid performance.
My point is more that things are usually a bit more gray than we like to paint it. The affect of personal greed on operations is going to be proportional to how willing and comfortable employees / management are in pursuing that. This will come down to corporate culture, for one, but I have no evidence that it's as powerful a factor as many doomsayers make it sound.
It can be pervasive in a large company, with poor culture and limited accountability, but from the outside, Supreme seems to value their culture, brand and productivity. As a counter-point, the Omnibus Incentive Plan which will be voted on, is an indicator of a dissonance between how management sees their performance and how investors might see it. I'll hold on to my naive optimism with both hands for as long as I can stomach it.
"They should be and aren't.. make a hope and a dream Canada eventually will change laws, open stores and they can produce below black market, good question why they aren't downsizing and instead hiring people."
"these are long standing issues, most of them are impossible or nearly impossible to change, some with supreme only but numerous items are for LP's wide"
I have to break this down in parts so that I can hope to pick your brain a little bit about this. You've made a few statements/assumptions mixed up into there, so I'm just going to try and lay them all out:
1. There is no growth in the legal Cannabis market currently, or it's not enough to sustain current projections.
2. Regulators are not currently trying to figure out how to extract as much growth as possible out of this industry and eventually stamp-out a large portion of black market sales.
3. Canada is not already in the process of opening more stores.
4. LPs must produce and sell below black market prices.
5. There is limited upside from further developments in the legal cannabis industry.
6. The black market is a problem.
I actually added #6, to my surprise, while researching this post. I've gotten most of my numbers from https://www150.statcan.gc.ca/n1/pub/13-610-x/cannabis-eng.htm. All I've heard about is how the black market is proving persistant, but the numbers don't seem so glib. Were people expecting 100% conversion in only one year?
-In one year household expendetures for licensed non-medical cannabis has gone from $170mil/Q to $417mil/Q. That's an increase of ~145% in four quarters.
-Meanwhile, household expendetures for unlicensed product have gone from $1187mil to $860mil. That's a decrease of 28% in four quarters.
-The decrease in BM for the last quarter was ~6%, a slight decrease versus the yearly rate.
-Based on the last quarter's run-rate, non-medical licensed growth would still be 50% per annum, not accounting for the shifting trend.
There's no doubt that many companies have been too aggressive in trying to capitalize on this growth, but that doesn't mean the industry is in a sorry state and that there are insurmountable sector-wide problems. Do you not agree that Supreme's goal has been to try and tread a different path than the others? You're talking about lowering prices to meet the black market, and Supreme just raised the price on their herb! (Not that I think that was smart. Maybe you'd call it a, "hail mary," even.)
Supreme has taken a path that, at least on the surface, is built to minimize the risk to all these factors:
1. The Cannabis industry doesn't necessarily need to continue growing for Supreme to grow sales of their lines/products.
2. Regulations are still being sorted out, but Supreme has been strategically reinvesting in their business for quality, not just volume.
3. More stores are still opening, but more important for Supreme is their ability to establish the brands and grow in-store sales to regulars.
4. The licensed and unlicensed markets are certainly different. I've been through different parts of the black market, and I will confidently only buy from reputable sources. I've seen far too many insects, mold, seeds, pesticide use and what-have-you. Not that this doesn't happen in retail, but all the more reason why there will be demand and growth for premium suppliers/growers. Considering the recent, "vaping epidemic," I'd especially rather not be smoking fungicide-laden cartridges that release cyanide into my lungs.
5. I don't know much about, "Cannabis 2.0," but Supreme and most Canadian LPs are global anyway. It's not like there's a lack of upside, if you have something worth selling.
6. As far as I could tell from your response, the main thing I could pin is your concern for the black market. It may be a bit excessive for me to say that the black market is a non-factor, but I don't think it should be worth serious consideration. There are a plethora of benefits to the licensed market that, at best, only trickle down to the black market. I think it's a bit of a misnomer to say that, to succeed, LPs must capture ALL THE CANNABIS SALES. It's not a race to the bottom until somebody makes it that way. Black market prices have declined >9% YoY and a properly operated and licensed business will never compete with the black market.
Hope to hear your side to this & best wishes,
-Dubby