Sunniva Inc SNNVF

Ted Ohashi interview with Sunniva

[Sunniva4Life]

Excerpt from today's Let's Toke Business Newsletter:

"

"On April 27, 2018, it was my good fortune to interview Dr. Anthony Holler, Chief Executive Officer, Chairman and Co-founder of Sunniva and David Negus, Chief Financial Officer of Sunniva.

Here are the highlights of what we learned:

(1) The California campus at Cathedral City is progressing well. Construction is virtually complete and work has commenced in the internal infrastructure. Propagation is expected in June/July with the first harvest in September/October.
(2) Recent receipt of California temporary licenses validates SNN’s business model and their expectation that the differences between this model and 100% ownership and operation in the first five years will be insignificant.
(3) Test production of oils has commenced and the early results are excellent. This has stimulated interest among third party growers who are considering using Sunniva to produce oils for them.
(4) Due to delays in processing paperwork in Oliver, SNN has been forced to consider alternative sites. A site at Okanagan Falls, B.C. is being considered. SNN is ready to break ground immediately.
(5) Natural Health Services continues to grow. Patient requests exceed NHS doctor’s ability to provide assessments. NHS has captured approximately 25% to 30% market share based on Health Canada
numbers for total patients.
(6) Recent political developments in the U.S. have made SNN even more optimistic and aggressive growth will be pursued including an acquisition strategy."

The full interview is really a great read. Tons of info.

[Sunniva4Life]

"...We have been and remain exceedingly optimistic about the prospects for Sunniva shareholders. We have indicated questions from Let’s Toke Business as LTB and answers from Holler and Negus as SNN. For a brief background: Dr. Anthony Holler is a co-founder, chief executive officer (CEO), chairman and director. Holler, who is leading the SNN team, is the former CEO and founder of ID

[JMark80]

Like I said, they own 30% of phase 1 production and are an intermediary on the other 70%. Wonder why that wasn't in their presentation.

[Sunniva4Life]

Because the difference between what they have and 100% ownership is negligible? Because it won't have a material effect on revenues?

[JMark80]

The 7 licensees aren't growing it for for free, so how could it be neglibile? Also don't forget effective tax rates can be nearly 90%.

[URLaughable3]

I would suspect that since SNN is supplying the tech, the building, the utilities, the infrastructure (fork lifts, warehouse, etc.), and all the moving parts from seed supplier to bud buyer (all of which would be there anywaus), they are goin to pay these “renters” a very small $ per gram rate...... and since these “renters” literally needed nothing to start their grow businesses, literally

[JMark80]

I appreciate your gracious response. You could be right, but growing high quality marijuana in large quantities is difficult so I don't think it will be that small, or is Sunniva running the production of the entire facility and circumventing the regulation by ostensibly "owning" the licensees in totality, i.e. licensees are licensees in name only? Dodgy, if true, but even with a

[URLaughable3]

I wasn’t trying to be a dic or overly optimistic. Im just very impressed with how they went outside the box on multiple fronts. The “dodgy” label may be used by competitors, but come on, its very smart. And yes, the way you described it, is how the interview came across. 1 location, 8 addresses, 8 LPs all in SNN control, leased to 7 comps and 1 for themselves. Same utility bill, financing fees

[Sunniva4Life]

I think that when the company states, very plainly and repeatedly, that the difference between their business model and 100% ownership is negligible and that it will have minimal impact on their bottom and top line, we have no choice but to take these statements at face value and basically assume their honesty and goodwill. We simply lack the information to support a contrarian point of view.

[JMark80]

If licensees need to profit, and their profit is currently taxed at a very high rate - as much as 70% (IRS code 280e) then the only way it can be considered negligible is if they are gaming the system. If the regulators don't have a problem with it, then so be it.

[Sunniva4Life]

That's a good observation... I guess that's why they put out that press release to celebrate being granted all the temporary licences in California - they could see the significance of that as being a validation of their business model, while many of us considered it more or less a non-event.

[URLaughable3]

You also have to look to the investor prez and news releases saying the target is sub $1 per gram in costs. Maybe canada side production drags that avg down because cali production has the “renter premium” added in. Im positive the numbers and projections are accurate as it is all part of the bus model and application requirements.