Hey Nerds: Blockchain

[Preston]

I bought some GTII today. Thanks Preston, for putting it back on my radar.

Been following them closely since last August; have executed every step of the way with seemingly zero red flags (which is rare in this sector). They've been money during the downtrend and seemingly holding the mid-10's like a boss. They have propelled themselves as a clear top pick and I'm not sure even the irrational market can justify a more substantial haircut than they've already gotten. I'm extremely overweight on them and don't mind it at all really.

But hey, if things get silly and they drop to the single digits, it could be the buying opportunity of a lifetime. I'm prepared for that and recognize it's entirely possible.

 

[Habsy]

What’s GTII?

on the TSE?

 

[Preston]

What are the red flags on HARV?

Vanishing Vultures: Are iAnthus, Harvest and TILT's Debt Deals A Predatory Trap Or A False Bottom?

It can be difficult to get a proper loan for growth-stage cannabis businesses that are still scaling and, for a

thedeepdive.ca

 

[Preston]

What’s GTII?

on the TSE?

GTBIF on the OTC

 

[Habsy]

Huh. Looks pretty consistent in the low double digits. Where’s your profit coming from? Large volume moves?

 

[Habsy]

Is that the right one?

 

[CH1]

Vanishing Vultures: Are iAnthus, Harvest and TILT's Debt Deals A Predatory Trap Or A False Bottom?

It can be difficult to get a proper loan for growth-stage cannabis businesses that are still scaling and, for a

thedeepdive.ca

Thanks. I can live with that red flag. They flat out need money and didn't want dilution. If they execute, both sides win.

Venture debt seems scary (because the interest rates are high), but when I worked with a venture debt firm (as a branding consultant) I saw a lot of winners on both sides of the deal.

Sure, paying 8% interest isn't ideal, but if you're a fast growing company, it's better than diluting your company.

 

[Preston]

View attachment 5031Huh. Looks pretty consistent in the low double digits. Where’s your profit coming from? Large volume moves?

Oh I wouldn't look at any MJ chart and expecting it to look any good...

So last year I ran them from ~$9 to ~$23, rebought in december with a ~$12 average and sold at $20. I started scaling in again this summer. Despite the sector absolute death, they have held on relatively well. I had a $11.50 average, sold half in the $14's last month. And then I re-bought half of that at around $10.90.

The chart is shit. All MJ charts are. But relatively speaking, it has held on quite well. And fundamentally speaking, they are a very strong company so I'd imagine it has something to do with it.

 

[Preston]

Thanks. I can live with that red flag. They flat out need money and didn't want dilution. If they execute, both sides win.

Venture debt seems scary (because the interest rates are high), but when I worked with a venture debt firm (as a branding consultant) I saw a lot of winners on both sides of the deal.

Sure, paying 8% interest isn't ideal, but if you're a fast growing company, it's better than diluting your company.

Yup, if all goes well they could be one of the biggest gainers when all is said and done. But the overhang has been pretty evident on the SP. They've been crucified and where is the bottom? Last two days have been insane.. Huge bounce yesterday and today it continues. Maybe they've hit that bottom.

 

[Habsy]

So I’m assuming you guys are expecting an upward turn? My account is in US $ so this is basically in the upper $8 range for me.
How much did you just buy CH1? 1000 shares? I’m thinking about it now.

 

[Preston]

Another significant factor on GTII is that they have a pretty significant headstart on their share unlocks compared to some other names. They have unlocked over half of their shares. There's a lot of cheap paper on all of these MSOs in particular. They have done it differently than most; incremental unlocks in order to not destroy the SP like we saw with TRUL earlier in the summer (They had an insanely huge unlock and the selling pressure was fucking insane). By this time next year, they should be pretty much done with their unlocks.

 

[Preston]

So I’m assuming you guys are expecting an upward turn? My account is in US $ so this is basically in the upper $8 range for me.
How much did you just buy CH1? 1000 shares? I’m thinking about it now.

It's a scary time to buy any MJ stock. If you're prepared to see your investment potentially cut in half and not have a meltdown over it, then go right ahead. It's not for everyone. But they have a fairly established, successful operation in a market that may see some legit legislative progress within the next year. Oh and they have a huge presence in Illinois, where weed is legal Jan. 1st.

But they're not immune to irrational (or rational) dumps. A controversy, a scandal, shitty news can plague them at any fucking time. So now that you know the risks.. Decide as you will.

 

[Habsy]

Another jump to $25 would be sweet.

 

[CH1]

I like to scale in my positions into 3 tranches, so if the price moves against me, I can consider buying more. And If it goes up, I may also buy more.

So today, I bought 300 shares of GTII

 

[Habsy]

It's a scary time to buy any MJ stock. If you're prepared to see your investment potentially cut in half and not have a meltdown over it, then go right ahead. It's not for everyone. But they have a fairly established, successful operation in a market that may see some legit legislative progress within the next year. Oh and they have a huge presence in Illinois, where weed is legal Jan. 1st.

But they're not immune to irrational (or rational) dumps. A controversy, a scandal, shitty news can plague them at any fucking time. So now that you know the risks.. Decide as you will.

i won’t freak if it falls to $5 as long as the company is solvent and won’t be going out of business.

then again, at 1000 shares the risk is minimal and would offset some other gains so yeah, I don’t mind a little volatility.

 

[Preston]

Another jump to $25 would be sweet.

Nowhere near a guarantee but there is upside for a lot more than $25 to be honest. Thems the appeals of pot stocks. But you can't ignore the risks or it's a tough one to deal with mentally when things don't go your way.

 

[Preston]

I like to scale in my positions into 3 tranches, so if the price moves against me, I can consider buying more. And If it goes up, I may also buy more.

So today, I bought 300 shares of GTII

That's how I do it. Slowly scale in and that way if it goes down, great, I get my average down by buying more giving me more potential upside. If it goes up on my first scale in, great. I jsut made money.

 

[Habsy]

I like to scale in my positions into 3 tranches, so if the price moves against me, I can consider buying more. And If it goes up, I may also buy more.

So today, I bought 300 shares of GTII

not a bad idea.

most of my retirement stuff is with a big brokerage firm but I have my personal play account and cash has been sitting there for months. Been too busy to play. I’d rather take the paltry interest over losing it because I don’t have time to research.

 

[CH1]

Fridays are fun because you get to see what stocks the big boys want to take home before the weekend.

Massive buying in Roku during the last few minutes.

 

[Preston]

Thanks. I can live with that red flag. They flat out need money and didn't want dilution. If they execute, both sides win.

Venture debt seems scary (because the interest rates are high), but when I worked with a venture debt firm (as a branding consultant) I saw a lot of winners on both sides of the deal.

Sure, paying 8% interest isn't ideal, but if you're a fast growing company, it's better than diluting your company.

FYI, my thoughts on Harvest haven't changed in terms of recognizing incredible potential upside from here. But there are risks (much of which has been priced in by the market). From Alan Brochstein, one of my favourites:

Harvest Health and Recreation issued a press release at 9:20 P.M. on a Friday night in mid-September disclosing that President Steve Gutterman was leaving the company to return to Denver. Gutterman was a key member of the management team who joined in June 2018 and was supposed to be involved in the integration of several pending acquisitions. Like MedMen, Harvest, which had an adjusted operating loss of $26.8 million in Q2, is struggling to access capital. Its debt financing with Torian Capital, which it announced at the end of July, has yet to close despite the company's expectation that the first tranche of the $225 million deal would close by the end of August. Perhaps Gutterman's quietly revealed exit was purely coincidental, but, in this environment, investors are likely to assume the worst.

We think investors should pay very close attention to abrupt management changes, especially during these challenging times. Nobody knows the inner workings and the true outlook of these companies better than senior management. When senior management hits the road in good times, it's often a yellow flag. When it happens during challenging times, we think it is a red flag.