RE:RE:RE:RE:RE:RE:RE:RE:RE:Questions to askYou're referring to the recent 15% drop on 7Acres flower, yes? This only happened about a month ago, over halfway through Q1. The effect on Q4 shouldn't be too significant, at least in provinces such as Ontario whom were selling out frequently (thus most of the inventory was likely sold through prior to price drop). One more point to mention, typically retail has roughly 100% markup on wholesale in order to cover their costs and make money. So a 50/50 split on price to wholesaler and retailer. Therefore, theoretically shouldn't about half of the 15% price drop be ate up by OCS margins (or other provincial retailers). In any case, we'll see some inventory impairment this Q, something around 7.5-10% which I'm not overly concerned about.
Agreed that Q1 should be much more exciting, which is only 6-7 weeks away. I expect we'll get a lot more transparency on things moving forward from Beena during the conference call on Friday.
StayInvested wrote: You bring up valid points, however PI financial isn't exactly an institution that I would put much weight in.
Pre roll pricing was dropped for SugarLeaf. I can't remember the exact figures, but they were.
KKE remaining inventory was drastically reduced. Blissco I can't speak towards, they haven't had enough of an impact thus far so I think inclusion is neglible.
7acres makes up 85-90% of their revenues, so I think you are undercutting the effect of the reduction in pricing. That's the main reason I am aiming my Rev estimate in the 7-8mil range. I obviously am hoping for higher, because I want all of you guys to make money.
I am holding this long term, as I took a position between 0.135-0.15 (95000 shares). This is purely a SPECULATIVE buy for me, as there are a lot of moving parts in this sector currently. I like "Pure" plays generally, and this is pretty close to that in this segment.
Financing, debt, and share structure aside (most startups, whether tech, cannabis, or mining have poor structure, due to risk), at a 58-70mil market cap it's an easy buy for me. That being said, there could be near term headwinds for the next few months prior to Q1.