Aleafia Health Inc ALEAF

Some questions about production.

[sincitywizard]

Let me start by saying that I am LONG this stock.  Those that have read my posts know that I'm a straight shooter and call things as I see them.  I'd like to echo somthing Francoic mentioned earlier.  Which is the question regarding production.  Where are the products? 

Now I'm pretty patient.  I'm willing to give management the benefit of the doubt  as long as I see progress. And we have seen some progress. But I'm starting to question management.  Granted Covid probably messed up a lot this year.  I believe I heard management blame Covid for delays in building out the irrigation on the new section of the outdoor grow, and thus delayed the earlier planting of the outdoor crop.  Which in turn produced smaller yields as plants had less time to grow. Not sure if that is to be blamed on Covid or management?

Benic has stated in recent conference calls that they were going to move away from wholesale (selling to other LP's) which was described in Q1 as a means to an end, and start concentrating on the more lucrative Medical and Adult Rec spaces.  The focus is supposedly to be on builiding their brands, and the delivery of 2.0 products.

They keep announcing new products, however, I check the Ontario Cannabis Store daily, and have yet to see Symbl vapes or Kin Slips available for purchase.  The SKU's are not even on the site saying that they are sold out.  I have searched One Plant Ontario and don't see many products for sale.  Anyone know if they are available elsewhere?  I beleive Emblem had a contract with Shoppers Drug Mart.

Now granted, I am not a medical patient in Canada, so I don't know the availability of Emblem products or have access to view the products in that space.  It would make sense that this is the priority as patients need their medicine and with all of our clinics - that has to be a primary focus.  Perhaps other Stockhouse members can shed some light on their availability.  Maybe that is where the products are? 

I question the choice to sell most of their product wholesale in Q1 & Q2, leaving them with nothing to sell in Q3. Summertime, when everyone wants to chill out at the cottage!  Seems like poor planning.  All anyone ever talks about is the huge over supply in the Canadian market so if they had nothing to sell, perhaps they should have purchased wholesale from other LP's to at least have retail product to sell under their brand name at provincial stores.  Probably would have lowered margins, but something is better than nothing.  I'm not an insider and privy to the everything, so perhaps they did what they had to do to survive financially, or perhaps they had agreements already in place that they had to fufill.  One would hope that they don't make that mistake ever again, and of course, now that everything is built, and up and running in all of their facilities, capex (fother than routine maintenance) should be done for now, and there should be no shortage of supply with perpetual daily harvests now online.

Supposedly they have enough cash on hand to pay back their debentures in February.  With historically low interest rates, they should take on new debt if needed from a bank, as opposed to diluting shareholders again. Here is a novel idea:  Have 2.0 products available in Ontario, Alberrta and the rest of the provinces now.  Sell more cannabis to pay off their debts. 

It always bothers me to see management getting paid handsomely, and doling out options while the rest of us long-term investors have not seen any great price appreciation over the past couple of years.  If you were an Emblem shareholder, you are still underwater since the takeover and have never seen price appreciation in your shares, unless of course, you dollar cost averaged down, and sold on spikes, which I imagine most people did. 

So the questions are:  Is Aleafia not able to produce enough product to meet both medical and recreational (both domestic & international) markets at this time?

Are they ramping up production to meet demand? 

Do we have the right management team in place here? 

Perhaps I'm just getting impatient, but in my opinion they should be running on all cylinders, cranking out product with three shifts going 24/7 if need be.  It's the holiday season.  People are quarantining, stuck at home with nothing to do but enjoy cannabis, stream Netflix and play video games. 

We just harvested a massive outdoor grow.  Supposedly they have a daily harvest in the new indoor greenhouse.   The machinery is all in place to produce vapes and Kin Slips.   So I ask again - Where are the products? 

People on this board always ask what will move the share price; we all know the answer - consistent earnings.  Profitability.  Which shouldn't be hard when you are one of the lowest cost producers in the country selling something that has huge demand - legal weed.

The Wiz

[RealityBitesHar]

Good Post Wiz. The Needle is moving the WRONG WAY!!!!

[GroceryGateway]

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