I know that most of the value in Enzo comes from the balance sheet, but what about the value of the off the balance sheet assets? do you think there’s value in the NOLs if the company is sold?
Hi, thanks for sharing! I have some research to do haha.
The cannabis market is definitely interesting after the big bust as demand is obviously still there and very likely to increase globally. As you mention consolidation seems likely in this low-price market and I like the thesis on CRON emerging as one of the survivors due to their balance sheet and backing by Altria. Though I do wonder with Altria already owning such a huge stake how much value will be generated for miniority shareholders in the case of a take-over. But at a net-net price the risk is obviously low, though the opportunity cost could be there depending on how things work out.. especially with the regulation / tax hurdles. Thoughts?
Your post also made me revisit a VIC pitch on Glass House Brands (GLASF) which is California's largest cultivator. The story is somewhat similar: survive and consolidate in these tough market conditions. They can do this by relying on their huge advantage of scale. Gross margins of 50% and cash flow positive.
From their latest earnings call:
"So in some ways, long-term low pricing. We either live in a world where we get to make outsized margins because of our efficiency or we live in a world where not a lot of people can sustain and it clears the deck and creates the space and the vacuum for us to expand."
Rescheduling will really open up the market for them, but even without that they seem poised to start making good money once prices improve (Edit: though on closer look with current trough biomass market prices I think things could get worse first).
Im a simple man. I get a notification from Raging Bull and I click
I know that most of the value in Enzo comes from the balance sheet, but what about the value of the off the balance sheet assets? do you think there’s value in the NOLs if the company is sold?
There's probably a bit of value there but I am not giving those any credit. Good point though.
Cronos: No mention of Israel plan on import tax? Likely not a problem for the long-term but a likely source of some exciting price action near term.
Yeah, probably should have added something on that. It’s a near-term risk for sure, as you say. Tariff still needs final approve so we will see.
Hi, thanks for sharing! I have some research to do haha.
The cannabis market is definitely interesting after the big bust as demand is obviously still there and very likely to increase globally. As you mention consolidation seems likely in this low-price market and I like the thesis on CRON emerging as one of the survivors due to their balance sheet and backing by Altria. Though I do wonder with Altria already owning such a huge stake how much value will be generated for miniority shareholders in the case of a take-over. But at a net-net price the risk is obviously low, though the opportunity cost could be there depending on how things work out.. especially with the regulation / tax hurdles. Thoughts?
Your post also made me revisit a VIC pitch on Glass House Brands (GLASF) which is California's largest cultivator. The story is somewhat similar: survive and consolidate in these tough market conditions. They can do this by relying on their huge advantage of scale. Gross margins of 50% and cash flow positive.
From their latest earnings call:
"So in some ways, long-term low pricing. We either live in a world where we get to make outsized margins because of our efficiency or we live in a world where not a lot of people can sustain and it clears the deck and creates the space and the vacuum for us to expand."
Rescheduling will really open up the market for them, but even without that they seem poised to start making good money once prices improve (Edit: though on closer look with current trough biomass market prices I think things could get worse first).
For CRON, I was a bit confused by their reporting. Are edibles under their dried flower segment?
Extracts I believe
No update on $TDW? It has hit my portfolio pretty hard considering I’ve been holding since ~$5
I've never formerly pitched TDW (see table of contents for actual "pitches", but I am happy to try to answer any specific questions.