Aleafia Health Inc ALEAF

RE:Aleafia Health Q2: An Overview.

[sincitywizard]

Excellent post.  I agree with you 100%.  Not sure what people were expecting, but everything looks really good from here on out.  I consider this another buying opportunity.  Let the weak impatient traders get shaken out.  Those of us who follow this company closely know the real score and can tune out the noise and shorters on this Board.

I listened to the conference call - (which I recommend that everyone should do) and Benic said the shift is to concentrate on higher margin Domestic Adult recreation and Medical, International Medical and a move AWAY from wholesale.  This is the shift we are seeing right now in these numbers. 

We don't  need to sell lower margin wholesale anymore.  We have all the cash we need. There will be no more dilution, as according to CFO, all major projects have been paid for.  We can cover any debt coming due in February - so no worries there at all.  Shorties are just trying to scare the weak hands that were looking for a "quick trade".  Thanks shorts, I'll be purchasing more at even better prices now :)


I see a lot of impatient people on this forum bashing their rollout of 2.0 products and Kinslips. Benic explained that with COVID-19 they had experienced delays in getting certian pieces of machinery in place which is completely understandable, under the circumstances of a global pandemic, especially if those manufacturers are based in the USA.  But everything is coming online now.  So many more SKU's are now in the OCS compared to even weeks ago; with even more higher margin Adult rec pre-rolls and vapes coming.  We should see that in September too.

In addition to the cannabis being grown for oil, distillates and edibles in the outdoor grow, AH  has also planted a section of high-grade THC cultivars that  will be sold to the Adult Recreational market in a Craft Cannabis high end way.  Which means higher margins. Yes, focus is moving to higher margins.  The drop in the announced quarter was because they did not sell as much wholesale.  I'm okay with that.  I'd rather have them focus on higher margin markets.

On the call, the company mentioned that NEW brands other than Symbl are possibly on the way as well.   Cannabis Connoisseurs will  always pay top dollar for premium craft cannabis that they cannot get anywhere else.  Two of the strains being grown, fit this profile. 

Also, cannabis can be stored for 6 months to a year without losing potency.  So let's not get to concerned about write-downs.  That biomass will be turned into 2.0 products.  It is not like they are throwing it in the garbage or incinerating it.  Again- vapes are coming - and we have a 2nd mover advantage on this will the lowest cost of production in the country.

I saw someone comparing Canadian companies to American MSO's.   Trulieve for example had a first mover advantage (even compared to other MSO's) in a completely different market.  You are comparing apples to oranges.  While I agree, that the situation (and investor sentiment) has changed for Canadian LP's, you have to look at companies on an individual basis, and examine the prospects for each one.  Curalef, Green Thumb, Trulieve and Cresco arfe the MSO's to be in.  But in Canada, I think that Alefia is going to be taking market share in the future.

AH is an under the radar sleeper that is moving towards outright (non-adjusted) profitability.  Let's see what our shares are worth after we sell this year's outdoor harvest and once are perpetual indoor harvests start happening next month.  

Q4 earnings results are what we are really waiting to see.