SilverPanther wrote: Get popcorn and a drink because this will be a long one.
THC Sticks For those who are concerned about the sticks, let's review thid release. Both the sticks and the drink were approved for production at the same time by regulators, now if we read this sentence (and are able to read between the lines). You will notice that the sticks were not 100% ready:
"THC’s consulting engineers and Quality Assurance team are currently monitoring initial production of the Pure Cannabis Sticks and fine tuning the automated production machine for product quality." Read that again "INITIAL PRODUCTION" this was the release on March 10, 2020 and here is the link - https://webfiles.thecse.com/sedar_filings/00005612/2003100535166496.pdf
Now if their INITIAL PRODUCTION was being monitored, that could still mean that things may break, not work properly, need adjustments, etc. You think it's easy to create a new product? granted that the technology for the sticks may have been around thanks to the tobaco industry, marijuana is different and needs to be handled in a different manner which means that a new procedure needs to be created. The only way to make that happen, trial and error. If you think it's easy, then I welcome you to try and do it, I will be the first to admit that I do not have the first clue on how to move towards that goal.
THC KISS Some have asked, "Why has KISS come out before the sticks?" Let's take a look:
"THC Kiss, THC’s cannabis beverage, also has gone into production and will be distributed to medical patients first with the roll out extending to the provinces shortly thereafter.
THC expects to release THC Kiss for sale to medical patients within the next 30 days." Same release as above.
You can clearly read that THC KISS was in production prior to the sticks as it was already a finished product and was not in INITIAL PRODUCTION AND was ready to be released within 30 days. Do you think if the sticks were ready that it would take until now and still not released? Also, there may be other refulatory loops that THC needed to jump through.
THC Biomed Value Some people are upset that we are where we are price wise and some may be thinking of how are we going to increase in value. Short and simple answer is until there is enough buying pressure to move up higher, I have been watching "Anonymous" and other brokerages who are flipping $0.005 at a time and dropping HUGE lots at certain price points. Remeber how big $0.10 was at one point? Look at us now! Holding above $0.13! That's a 30% increase!
Let's look at this release:
https://ceo.ca/@newswire/thc-biomed-releases-second-quarter-profitable-results
"
Achieved revenues of over $1,000,000(1) in each of the first two quarters of the fiscal year with an average selling price of $4.20 per gram to medical patients and recreational buyers" $1 Mill in the FIRST two quarters of the fiscal year!!?? with an average of $4.20? I mean come on.
"Revenue for the quarter increased 163% compared to the same quarter last year"
Even if we divide this increase by four quarters, that brings us to an increase of 40.75% per quarter in revenues! WITHOUT THC KISS or Sticks!
Tell me, what goes through your head now that we had two thirds of a quarter WITH KISS to only medical patients alone? What kind of and increase do you think we will see (yes of course taking COVID into consideration)
"Acquired an additional strata lot at the production facility to continue to increase grow capacity"
"A new three-year lease began for a property adjacent to our production facility intended for administration, storage, and other activities not related to cannabis production in order to free up space at the production facility by constructing four new grow rooms with the space once it is renovated and approval received from Health Canada"
Simply put, they are expanding in order to provide the supply that some have been concerned about, this was released on April 8th, 2020. It will take time to get that set up on top of everything going on. Literally moving the administration to another location to free up space to grow more.
"Had our license amended to include the production and sale of cannabis edibles, topicals, and extracts" Edibles - We all understand why.
Extracts - We understand why.
Topicals - Hmm... What do they have planned coming up?? Some other medical product to be applied as a cream or patch for example for those who are extremely picky or uncomfortable ingesting weed? PURE SPECULATION on my part but gets the gears turning.
"Issued two convertible debentures for a total of $904,536"
"Announced the completion of a non-brokered private placement for total proceeds of $201,348 plus the repayment of bona fide debt of $800,000" Ok yes, debt is always a touchy subject however, you need money to make it and not all debt is bad debt if used correctly. On top of that, "
repayment of bona fide debt of $800,000" they have paid off $800K of debt with only two quarters of over $1 Mill revs and the private placement, that says something.
"Announced an offer to existing shareholders to complete a non-brokered private placement for a further 3,333,333 Units at a price of $0.15 per Unit for gross proceeds up to $500,000. Each Warrant entitles the holder to purchase one Common Share of the Company for a period of 24 months from closing at a price of $0.18 per share for the first six months, at $0.25 during the following six months, at $0.50 for the six months following that, and at $0.80 during the final fifteen months"
Look at the increases in the short timeframes, I've seen many other companies that would leave the purchase price at the one level for the 24 month period. This is a much better structure although yes, another 3.3 million shares is never fun.
BUT
"Announced a normal course issuer bid to purchase up to an aggregate of 7,977,152 common shares of the Company representing 5% of the issued and outstanding common shares as at that date of which 1,080,000 shares have been purchased to date" They are reducing the float without doing a rs, ssssoooo many companies resort to that first to boost the share price in order to attract more buyers. Here John has so much confidence in his company that they are buying back and cancelling the shares. This will also increase the share price as these are now dead shares and reduces the float.
If Canopy can be at $22.26 with 350 million share float and a $1.3 Billion loss this quarter, then why can't we get there with 158,326,056 Outstanding and 56,528,634 reserved? More than double the float and ya ok they had Constellation and Investors backing them hard. I feel they expanded way too fast and are now paying the price.
Source of shares: https://thecse.com/en/listings/life-sciences/thc-biomed-intl-ltd
With all of this said, what do you now think about the position that we are in? I am not looking to be labled a fanboy or anything like that, this is a discussion with a deeper look into the current events and hard facts. I feel that we are in a great position and we are in the bottom floor at the moment. Again we have to see what happens with the COVID situation however with that article about how the Industry is heading to the third wave, that's a positive.
I know this was a long read but I'm getting this information out there for a different view. If you think I'm an idiot and you disagree with any or all that I've said, please tell me and we will discuss. Only time will tell the future.