“I think these companies are insulated from the threats of the trade war, as far as revenue goes. Sure, the stocks prices could drop with fear in the market but these are domestic operations and in the long term, they’ll thrive. I like these vertically integrated, multi-state footprints. Since it’s federally illegal, each state is operating in an oligopoly. So in the near-term it’s costly that they have to build out (green field) or acquire an existing producer in each new state they enter. However, in the long term these companies are building up for strong regional production and distribution networks. I expect states to still be restrictive to keep the tax revenue in-state when the U.S. goes legal at a federal level. However, should some states be lax in their laws or there are shortages, these companies that have the regional distribution could benefit. Still a few years away but when the U.S. flips the switch (legalize or at least decriminalized/re-schedule), these companies go from individual state oligopolies to regional to super-regional distribution networks.
I think a combination of these three gives good exposure to the U.S. market:
- Exposure to three of the top four states by population (California, Florida, and New York)
- Have to discount some of the states on the map (New Mexico isn’t 100% ownership for iAnthus, California is CannaRoyalty’s primary focus, iAnthus still has to build out it’s East coast footprint)
- Vertically integrated in large addressable markets and multi-state footprints.
- Dispensaries and distribution networks
- Large brand portfolio
- Longer term outlook (2-3 years before fully built out and steady state)
- In terms of near-term revenue, I’d rank 1) MPX 2) CannaRoyalty 3) iAnthus. MPX has their Arizona market while they build out their other operations. CannaRoyalty closed on the acquisitions of their distribution network but still need to integrate those operations but they should be up there with California ramping up. iAnthus still needs to build in NY, FL, and MA.
- Other users on this sub can probably speak to their financials and share structure but from what I can tell CRZ and IAN look good from a fully diluted standpoint.
- Competitors: California (lots), New York (MedMen, Columbia Care), Florida (Liberty Health), Nevada (TGIF, lots). Someone had that spreadsheet of the companies in each state.
- Current Operations: California, Washington, Arizona, Florida, Nevada, Puerto Rico
- I like CannaRoyalty’s approach to the California with manufacturing brands and distribution to dispensaries.
- Distribution network through River Distribution and Alta Supply Inc.
- Leveraging IP and brands from U.S. into Canada
- CannaRoyalty – Investor Deck – Corporation Presentation – March 2018
- April 4, 2018 – CannaRoyalty Announces its Fourth Quarter 2017 Financial Results
- March 13, 2018 – CannaRoyalty Corp. – 30th Annual ROTH Conference – Dana Point, CA – March 13, 2018
- March 29, 2018 – CannaRoyalty higher on California partnership deal
- Current Operations: Arizona, Nevada, Maryland, Massachusetts
- Future Targets: New Jersey, Ohio, Michigan
- Strong footprint in Arizona
- Ties to New Jersey with CFO Beth Stavola
- Even if they don’t get licensed to be fully integrated in some states, they have a brand they can still potentially license.
- East and west coast exposure.
- Own dispensaries as well as selling MPX-branded products through their competitors dispensaries
- I think news one the Owen Sound, ON facility is supposed to come out some time this summer. Honestly, I think their U.S. exposure alone justifies the ‘hype’.
- MPX Investor Presentation
- February 27, 2018 – Midas Letter – MPX Bioceutical Updates their Aggressive USA Expansion Activities
- January 31, 2018 – Beth Stavola MPX Bioceuticals Interview with New Cannabis Ventures
- Current Operations: New York, Massachusetts, Florida, Vermont, New Mexico, Colorado
- Active Discussions: Oregon, Nevada, Arizona, Illinois, Ohio, Maryland, New Jersey
- Using dispensaries as hubs and vehicles for delivery in hub-and-spoke distribution plan
- Vertically integrated operations
- Large addressable east coast footprint
- Strong management team
- Still a few quarters out from ramping up
- I think the CEO Hadley Ford’s family ties/history with cannabis show that these aren’t just suits with zero know-how trying to capitalize on the new market.
- iAnthus Capital – April Presentation
- March 13, 2018 – iAnthus Capital Holdings, Inc. – 30th Annual ROTH Conference – Dana Point, CA – March 13, 2018
- March 14, 2018 – Midas Letter – iAnthus Capital Holdings Inc. is Facing Little Competition as they Ramp Up their USA Operations
- February 8, 2018 – BNN – iAnthus CEO: Disruptions in Canadian pot market could be good news for iAnthus
- The Green Rush Podcast – Episode 20 – Making Cannabis the Next Great American Industry