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Aleafia Health Inc ALEAF

Aleafia Health Inc. is a federally licensed Canadian cannabis company offering cannabis products in Canadian adult-use and medical markets and in select international markets. The Company is engaged in the production, sale, and distribution of cannabis. It operates a virtual medical cannabis clinic staffed by physicians and nurse practitioners which provide health and wellness services across Canada. The Company operates two licensed cannabis production facilities and operates a strategically located distribution center all in the province of Ontario, including the largest, outdoor cannabis cultivation facility in Canada. The Company produces a diverse portfolio of cannabis and cannabis derivative products including dried flower, pre-roll, milled, vapes, oils, capsules, edibles, sublingual strips and topicals. It markets and sells cannabis products through regulated intermediaries into selected international markets, tactically sells cannabis products into Canadian wholesale markets.


GREY:ALEAF - Post by User

Comment by Toweringmarson Nov 30, 2021 8:59am
128 Views
Post# 34179283

RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Thoughts on the CC

RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Thoughts on the CCSomeone as seasoned as yourself should know better than to be 'relaxed' at any time. All of the greenhouse cannabis has not been valued in that. Dont forget their trade and receivables went up 3549. Once you add in the 4228 (which is the difference between inventory (as I said the provision was on the books in Q2, so to see the true difference of change as a whole it needs to be factored) you end up with 4228 + 3549 = 7777. And if you're truly trying to see 'if' they've warehoused what was coming off the greenhouse then you need to subtract what they sold in Q3, which was 2,709kg or $9,486. 

As you can tell, numbers can give you a ballpark approximation. But they dont tell the true story and cannot be used to fully narrarate the tale. There is a total of 17,263 in addressable change to inventory between the periods, and still this doesnt identify with any certainty what truly is the case.

You go on by saying that if this we're true its going to take them years to sell. How exactly do you know that? Because what they sold in Q3? You're basing your entire thesis off one quarter? And that leads you to being completely relaxed? You dont know whats going on there, nor would you even want to be there making decisions.

Q3 was another quarter of cleaning the books, why would you wait until a blockbuster quarter to complete all the write downs of intangibles and goodwill? I wouldnt be surprised to see a few more 'fine tuning' changes before the Q4's. But i'd be willing to bet you know that and will have flipped to a long position by then. Am I right?



KeyserShoze wrote: I am completely relaxed. lol. There is no way you are with this at $0.15 and out of cash. So I guess you are comfortable that all of their niagara flower in q3 has been valued in that $4 million increase to their "work in progress" inventory number after a $7.5 milion in q3 rec and medical sales? lol. You are in for a big surprise Jackie. If it is also your estimation that 3 months of niagara indoor grow is equal to $2.4 million, that's fine as well. Just a little off of Aleafias guidance. If calling holding on to thousands of kgs of indoor bulk when they only sold 1131 kgs between med and rec in q3 is strategic, then I don't know what else to tell you. We shall wait and see in their upcoming financials who is correct. 3 months is 6000 kgs if we use their numbers. It'll take them 2 years to sell that as rec and med with their market share. Even if they double their market share it'll take 1 year. Not including outdoor preroll flower.
Toweringmars wrote:

What do you mean nice try. Yes. It's deducted. Meaning they carried that on the Q2 books and having been deducted the difference in inventory value cannot just be 1.85. Its an add on when comparing total difference compared to Q2 (when it was on the books). 

And relax Giilligan, the only thing bleeding on you is yourself for a few days a month. Or are we too old for that? I suppose the fertility train passed by now. I keep forgetting your just a simple workin man father of five trying to put his kids through private school.

#MedSchoolBaby
 

 

KeyserShoze wrote: Nice try. The inventory provision of $2,382 ($2.4 million) is to be deducted not added to total inventory. Their value of inventory changed $1.85+ million not $4 or $6 million.  


 

 

Toweringmars wrote: Man, its hard not to get distracted by ol' pss lips himself. Sorry. Focus. Okay.

If you look at note 9, the provision of (2,382) is already deducted. Therefor the true value of the inventory would have been 36,250 less supplies and consumables. Inventory at the end of Q2 was 32,022. A difference of 4228.
There it is. 

Inventory notes:
                                    Q3                   Q2                           Diff
Finished Goods:       3,009               3,714                        (705)
Work In Prog:           30,917             26,805                       4112
Supp and Cons:        2,324               1,503                         821
Add in's                     2,382                  Nil                          2,382
Total:                        38,632              32,022                      6,610

Its in the "fine print" as you would say.


KeyserShoze wrote: Toweringmars, don't get distracted by playing the Starfish game. Let's play find the amount and value of the mysterious inventory instead.
KeyserShoze wrote: Bio assets is the increase in value of growing plants not CBD distillate inventory. Inventory went up $1 million from q1 to q2 and another $1.8 or so q2 to q3 as well. So increase in inventory was $2.8 million plus over 2 quarters with lower sales in q3 and $5.7 million FV adjustment loss in Q3. lol. More creative accounting it seems. They haven't sold bulk for 3 months out of Niagara.. I thought they grow 2000kgs per month there? 6000 kgs $2.4 million = ?/gram. I'll let you answer that one and how much they're valuing their indoor dried flower at. Maybe a little prelude to what they'll expect to get from their outdoor. So they held indoor flower from bulk sales q3 so they could sell outdoor flower in bulk q4. Makes sense. lol. Hard earned dollars were unfortunately thrown away into the abyss after chasing the hypothetical posted optimism down the rabbit hole on this stock. My posts aren't to put down anyone who has lost hard earned dollars. They're to add context so others can read into things more closely instead of blindly following partially accurate PRs that Aleafia has released and empty optimism posted here. Anyone who read the Q3 PR thought they sold bulk at $1.26 until it was brought up here. Read the fine print in the financials people and don't listen to the posters who have been on the wrong side of history on this board for over 2 years. I hope you all catch a much needed bounce.
Toweringmars wrote: Oh heavens, you we're right about the CBD. Well... That changes everything.
Forget everything else in the post. Lol and posting less... From you? Thats funny.

I hear ya IMB, dont blame you for ignoring him, I can see most users have done the same condiering he gets next to no reads on any of his groundbreaking copy and paste discoveries.

Maybe he'd have more likes at the same time if he wasnt such a window licker. I mean, lets face it, the guys going to go far someday, and when he does lets hope he stays there. Lolol guys a grey sprinkle on a rainbow cupcake. Frankly, I dont know what his problem is, but I bet its hard to pronounce.

"My post was meant to challenge the previous post that bulk was becoming less of total sales as a pattern when q4s bulk will be the main revenue growth QoQ. Is that not the case and longer?"

No, where have you been the last year? We're moving away from the primary bulk model. As seen in the 2000% gain YoY in adult use.

Go back and re-read my post for the fifth time and realize that while bulk sales will be the icing on the cake, the outdoor is allowing them to break away from feeding greenhouse into some of these lower margin products and re-allocating the right product for the right place. 

QoQ the inventory was 32,022 and is now 33,868, a difference of 1,846. If they we're carrying the charge of 2.4m in inventory then that difference would be 4246 less whatever they we're able to get from the sale. Lets even say 50% (which its likely less) then 3046. Their biological assets from the previous Q we're 8,566 and now rose to 10,268, a difference of 1702. 3046 + 1702 = 4748. Seems about right considering we probably gave them more than what they recorded the sale of the aged CBD at.

And regarding your 'positivity", you even put a spin on that with the whole "That is if they arent going to write it down".

Its almost like its your job to stop people from discussing anything company related without trying to make it negative. You're so quick to assume people are paid shills, and that what you do is somehow entierly different. But take it from a Legend pal, people get tired of the chicken little act. Maybe try being a human for once and realize that people put their hard earned money into this thing and while being well aware of the risks associated, dont want to read some ape copy and paste the same loss statement over and over. If you're going to be a turd, go lay down in the yard with the rest of them.

KeyserShoze wrote: The Legend continues

It's like you are paid to find the slight glimmer of hope in every post. Try reading more and posting less and you will find the information required to have an accurate constructive conversation.

Page 11 of the Q3 md&a states under

OPERATING EXPESNSES

"The net negative gross margin is attributable to the company recording an inventory reserve of $2.4 million, and the opportunistic sale of aged CBD distillate, which is no longer required due to greater focus on THC dominant vape SKUs." 

It states CBD right there. No hunch required.

My post was meant to challenge the previous post that bulk was becoming less of total sales as a pattern when q4s bulk will be the main revenue growth QoQ. Is that not the case and longer? 

As per the 5100 less kgs sold in q3. Why is that? If its true as you've claimed that they're concentrating on rec rather than bulk, why did their inventory value not increase accordingly if they're warehousing 5100 kgs of indoor dried flower? Show us where the increase in assets is for that inventory. Also, why did they not export any flower to Germany for much needed cash but instead dumped CBD distillate at a loss for sales? Your post did not address the question.

Furthermore, I mentioned their cost of goods sold is between $10 and $12 million. Therfore anything above that would be profitable if not for any unsuspected writedowns. The fact that you found that as a negative suggests you see everything I post through your confirmation biased eco chamber lense. Stick to to facts. Positive or not. 

I am a howl at parties.














 
 





Toweringmars wrote: Its like you just cant help but be
negative. 

The Distilate was aged. No clue if it was THC or CBD it was just a hunch. If its aged then its beyond its shelf life I would imagine which is probably over a year old. But again, just a hunch.

They addressed the decline in medical sales in the conference call. And sure it sounds like an excuse, if you go back and check the quarterlies it checks out. Q3 is seasonally a slow quarter for medical sales. That coupled with the fact that health Canada was extending scripts caused a major issue for any customer looking to migrate to a new LP. Medical sales were down 23% QoQ but up 31% YoY, so frankly they're still scaling that side. Meanwhile adult use is up 57% QoQ and 2044% YoY. The company is proving it can grow its operations. Now the gross margins we're down 19% in the adult use side (still up 8% YoY), which I spoke to in my last post. Pre-rolls have less margin than other 2.0 products and the company made a real push into that segment as the brand picked up traction. Using outdoor instead of greenhouse for the input material there will draaaaaaaastically change the margins on those. 

Medical margins were up 6% QoQ and 21% YoY, so they're honing in those sales regardless of the seasonal downturn. 

So to your "They sold 5100 kg less than last quarter" Yes, that is a good thing. They arent dumping bulk onto the market and did relatively the same revenue selling 65% less product.

So yes, the average sales per gram for medical decreased.... BUT THE MARGINS INCREASED.

It depends what mix of product is selling. 

You must be a real gem at parties.

KeyserShoze wrote: They sold 5100 kg less than last quarter. That isn't a good thing. Recreational sales increased while medical and bulk decreased. The average sale price per gram for medical decreased as well. Kind of wierd. Isn't Unifor supposed to increase medical sales? Bulk sales price per gram is also deceiving. The $1.26 price per gram was high due to old inventory of cbd distillate that they got rid of at a loss. Another wierd sale since CBD has been touted by bullish posters as a potential future revenue growth. Why was it sold at a loss if their is such demand in this category. A little bit of desperation maybe? Without that sale q3 would have been worse. It seems their overall costs are somewhere between $10 to $12 million per quarter. That is if they aren't writing down anything. But your post is kind of ironic since this upcoming q4s biggest revenue driver will be outdoor bulk sales.
IMB wrote:
finally something to read. Did you ever look at the ratio of kgs sold between their catagories? The wholesale has dropped every Q. this year, so with the right mix they don't have sell as many kgs to make a profit. This Q, in the past, has always been their biggest and they are saying that there is on going orders to Germany. So time will tell if they have gotten the mix right.

 

 

 

 

 

 

 

 

 




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