RE:RE:ResultsI am honestly confused as to why you are calling me a liar. Simply stating things that you do not want to hear does not make me so.
I am fully aware of what was and was not included with the results. To sumarize:
- 2020 had 3 operating dispensaries, Port City, Sacramento and Redding, generating $22.4 million (that is $7.4 million per dispensary, which was amazing)
- 2021 had 5 operating dispensaries (as I said in my post), adding Palm Springs (for most of the year) and Portland, generating $27.6 (that is $5.5 million per dispensary), can you see how the new ones brought down the average? You are making the mistake that management is presenting, that having an increase yoy itself is good news. Please take the time to dig into the details.
- As I stated, as the company no longer itemizes the revenue streams of each dispensary, we have to guess ourselves. If we assume that the core sites generated approximately the same revenue as last year (you can discount some to account for the overall market slowdown, but they are entrenched locations), then we are left with about $5 million between the two new dispensaries, that's $2.5 million apiece for the year. I appreciate that Palm Springs was not running for the whole year, but bear with me. In 2020, our 3 core dispensaries averaged $7.4 million in revenue EACH. That means that Portland and Palm Springs are 1/3 the revenue generators as the others. If these were brand new sites that we'd opened, I could absolutely live with this (it would be great), but these were supposed to be established, producing sites that we paid for. In fact, Palm Springs cost us $2.2 million for an asset that generated just over that in revenues (and likely isn't nearly profitable - but again, how can we know if they don't tell us?). Even worse, I would have hoped that these locations would gain in revenues as time went on, gaining market share and using our model and cheap weed to increase sales. This apparently did not happen.
Here's a quote from the release that proves my point:
"Adjusted EBITDA in the three and twelve month periods ended December 31, 2021, totalled $73,125 and $2,308,864 (2020 - $842,364 and $2,965,075) respectively. Positive EBITDA contribution from the Port City, Sacramento and Redding dispensaries was partially impacted by a loss at the Palm Springs, Portland and the Distribution CGU’s along with head office and increased public company costs."
Translation: We made money from Port City, Sacramento and Redding and lost money on Palm Springs, Portland, distribution and corporate.
I'm not even very big into EBITDA as a measure, but I'll take what they give.
I disagree that cultivation expansion is needed to support current and future sales? Why? Why can't we ink long-term deals with suppliers and sell for a profit? Why do we need to add the risk of running a completely different business model (growing) parallel to what we are good at (retail)? I can see the benefits of this to increase margins as we go, but we jumped in with both feet and overextended ourselves. Maybe have retail locations that actually sell product well enough to earn money before thinking about making the stuff we sell. If we need to grow the stuff ourselves to make the business profitable, that's a problem.
So assume that cultivation is on schedule and under budget. Great. But what does that mean if our budget exceeds our current cash position. Does it? I don't know, do you? That's what I have issue with.
No, owning a property as part of the business is not old news. It is, in fact, very pertinent news. What is our obligation for that property? What have we spent? What is our timeline? What are we hoping to achieve? None of these questions have been answered. THAT's why I'm bothered.
Dude, the dispensaries do not have a 42% gross profit margin. For 2021, it was 35% About the same as last year. That's still an AMAZING margin. That's why sticking with dispensaries is so key for us.
You didn't answer my question. How long will our $9 million last us? To June? December?
With regard to US law changing, yes that would be fantastic for us. But betting the farm on the hope of a government behaving the way you want is a recipe for disaster.
I'm not saying that I'm selling here. I'm going to wait for Q1 to see what happens.
We should have followed the Trulieve model... expand via dispensaries (organic and acquired) and wait for cultivation later in the growth cycle. That's how a titan is created. All we had to do was copy them. We're trying for too much, too soon.