There is an obsession with Sundial Growers (SNDL) among traders. The stock is 140% higher than the previous year, and I think the only reason is because it is a cheap marijuana name that can be traded in all brokers.
Traders consider it ‘cheap’ despite the market capitalization of billion dollars. This is the same company that was sued because it did not disclose that the product was returned to it because it contained mold and pieces of rubber gloves.
I teased Aurora Cannabis (ACB) regularly because she issued shares as if they were candy. Sundial Growers becomes the “keep my beer” reaction to Aurora. Drowning in debt, Sundial has used every doll in its stock to issue more and more shares. They broke the billion mark and I’m not sure there’s an end in sight.
The company is moving from wholesale to cannabis, but it is almost unique in the industry. In fact, Sundial is far behind the competitors in this regard. This hit them hard, as net sales have recently declined by 46%.
Maybe the Twitter guru leading you to this stock will not admit it, but in my opinion it’s a pump and dump. Ironically, it may ultimately save the company because they have a stronger balance sheet, but with a valuation of now more than $ 1 billion, there are much better places where an investor can place their hard-earned cash, or they may now have an aggressive or want moderate name.
Village Farms (VFF) should probably be the best name on everyone’s list if they swap something in Sundial’s place. The fact that these companies have the same market value is absolutely ridiculous. Village Farms offers the lowest production costs, owns 100% of Pure Sunfarms, owns a large greenhouse in Texas that is ready for downtown production if it is legal and has an international reach. They also sell Sundial sales three times, which is positive and profitable. Now tell me again why your guru buys you Sunday?
Buy a multistate operator. Which one? Almost everyone. Cresco Labs (CRLBF) in Illinois sits at the top of my list. At a market value of about $ 5 billion, you get the king of Illinois cannabis. Cresco, spread over nine states with 15 production facilities and 20 pharmacies, has one of the largest footprints in the US. They reported more than $ 150 million in revenue along with profitability in the last quarter.
Trulieve Cannabis (TCNNF) is another alternative. Revenue of $ 136 million in the third quarter came just below Cresco, but the Florida-concentrated marijuana company generated stronger EBITDA. And I would not blame anyone for going along with Green Thumb Industries (GTBIF) or Curaleaf Holdings (CURLF).
The easiest thing to do is to buy Advisorshares Pure US Cannabis ETF (MSOS), which will get you all of the above stocks plus another 25.
For those who want to stay in the aggressive lane, Juva Life (JUVAF) and Cybin (CLXPF) are two smaller considerations.
Juva
Juva is a vertically integrated marijuana business in California. His CEO actually received the very first license in the state. While the cultivation, processing and sale of cannabis to retailers and distributors will provide a good revenue stream, Juva is taking the road less traveled, which would have a large return for shareholders in the future.
Juva will combine IRB-approved patient examinations with testing and product integrity verification through a network of physicians and clinics, as well as its own $ 5 million Class 5 cleaning room.
This will not lead to Phase I trials with the FDA. Instead, Juva will collect a lot of data reported by patients. These patient-reported outcomes per Juva-formulated precision cannabis products will enable the company to demonstrate that X used by Y-patients produced Z-reactions / outcomes. The most common target for Z is a reduction in a symptom by a specific percentage.
Say, for example, that I reported a daily pain level of 7 on a scale of 1 to 10 before I started using a specific dose / precision Juva cannabis formulation. When I used the product for three weeks, I reported a new pain level of 2 on the same scale, something that was worth nothing. Now imagine that 10 people, 100 people, or 1,000 people reported similar results. No, Juva can not file a medical claim, but they can say something like: ‘Well, sir or me. Patient. 85% of people with similar symptoms since you reported a reduction in pain using this particular cannabis strain. “
The short-term results: Juva can steer customers towards tensions with doctors based on the results reported by the users. The long-term hope is that physicians are more likely to recommend cannabis based on actual patient data.
With each patient report, Juva’s dataset grows, and we know how valuable data is in today’s world. This will help set up a marketable and valuable medical database. It could appeal to others in the cannabis world to work with Juva and piggyback on the idea. Since large pharmacies will not venture studies or trials until a federal way is clear, the data they can get from Juva will give a huge edge over competitors if clear. The current study targets for Juva currently revolve around inflammation, oncology, neurology, pain management and opiate reduction. Any possible replacement for opioids is a major benefit to society and a major financial risk to major pharmaceuticals.
Cybin
If Juva is the less traveled road, Cybin is the new road being built. Cybin does not work in the cannabis space, but rather in the next evolution of drug treatment, psilocybin. But we are not talking about recreational use. Management considers itself a life science firm. The company’s current focus is on the development of treatment regimens consisting of its own psychedelic molecules and the development of the delivery mechanisms, such as the firm’s own sublingual film and inhalation delivery system.
The company recently announced that it will raise C $ 20 million. When the deal was closed, they brought in more than C $ 34 million, which strengthened an already strong balance sheet to one with more than US $ 40 million. And they’re going to put this cash to work.
According to Cybin, the intention is to sponsor a clinical trial for phase 2a and phase 2b in patients with major depression (MDD) later this year. The trial will be conducted by the University of the West Indies (UWI) and will comply with the International Conference on Harmonization (ICH) and Good Clinical Practice (GCP) guidelines. By doing so, Cybin can use the data collected as a bridging strategy to enter other jurisdictions such as the US, Canada and Europe.
If one of these cannabis companies were smart, they would snatch up Cybin before it gets too expensive. With a market capitalization of only $ 300 million, I expect it to reach $ 2 billion before Sundial does.
If Sundial were smart, they would share in that candy pot and now offer Cybin between $ 500 and $ 700 million and make themselves into something that could compete against all the names above. Until then, I would feel much more comfortable owning a mix of VFF, MSOS (or some individual MSO names) and JUVA or CLXPF, long before I own a SNDL share longer than a scalp trade.
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