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Hey Nerds: Blockchain

"ohhhh I don't know about that"...sadly that out of touch anchor represents way too many muppets in DC.
 
Under my estimate but on par with the analysts. Completely flat quarter. But a few acquisitons closing with AZ rec weed coming. Very curious to hear about their proformas. Should be at or above $100m once they all close and AZ weed comes online.

Their costs went up because of their three acquisitons but overall it's fine
 
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As for MSOs I had kind of an epiphany kind of moment where I'm not quite sure growth will be all that impressive even in 2021. For a better explanation let's look back in 2019 where there was growth but it was primarily a build-out, expansion kind of year. Costs were high and they were building for 2020. And then in 2020 Illinois recreational weed became legal which provided a boost and many of the expansion projects came online and you clearly saw that reflected in their earnings especially in Q3. But for much of last year (maybe it was because of Covid or maybe it was because of an uncertain economic landscape) expansions were kind of put on hold and now many of those projects are not scheduled to come online until Q3 or even Q4 of 2021. And this is for multiple companies.

Outside of those highly present in AZ who will naturally have a big boost in revenues and those who acquired companies (AYR, Columbia Care, Curaleaf to some extent, VEXT, Harvest, etc.) I think 2021 will all about building out, as we're seeing many companies who are frantically doing that after the election results. Costs will increase, profitability may suffer, but revenue growth may not be there until the completion of these projects in the latter half of the year and mostly into 2022. The other part is 2022 will have NJ sales come online and tbh possibly NY and PA as well if they hurry up and get their shit together. That alone would create mother fucking fireworks.

For 2021 I have 2 companies that I will be watching closely. By Q2 or Q3 Ayr is likely to double their quarterly revenues primarily due to their acquisitions. But they acquired assets that are far less profitable than them so their margins will suffer. They're in "execute your balls off" mode this year much like Columbia Care. They have the pieces and the story lines up for me... But late this year and 2022 will be telling on whether they can become a legit player or not. Still a cheap valuation with solid upside if they execute their plan. Their appeal is their profitability and there's a chance it suffers tremendously in the early stages of the acquisitions closing, but can they clean up LHS, for example? Big task. They are a mess.

Columbia Care is in a similar spot but they're starting from brutal margins.. Good news is they acquired companies who are have better margins than them so theoretically they should improve on that front. Kind of the tale of two opposites there, but both are in "execute" mode.

TLDR: I'm not sure Q1 or Q2 2021 will be much better for the Thumb's and Cresco's of the world. I think most growth in the early stages of 2021 will be from those who acquired aggressively like Ayr and Columbia Care and those who get the organic boost from Arizona going rec legal. With that said the thesis does not change. Growth is not linear and it can come at you fast. Could also be a year of M&A so growth could come in that way as well.
 
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Listening to the AYR call and yup... All about execution. Guiding 725m revenue/325m EBITDA for 2022. Saying they will acquire more companies this year and they are currently building out in every single state that they are in. Essentially said the first half of 2021 is a write-off for them and maybe all of it as it's a transitional stage. Lots of other good information. Their level of disclosure greatly exceeds every other MSO tbh. So much detail on state by state growth.

Mentioned that Nevada, despite the huge tourism hit still grew 23% in 2020. Should only get better once things open up a bit more.
 
CH1 said:
the suits at AYR seem sharp -- for that reason, I'm in
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I came away really impressed. And I usually roll my eyes during these calls. Listened to a bit of the Curaleaf one and had to stop because BoJo is a bit much for me at times. When he said about the acquisition that "it's like we went back in time two years ago and acquired Curaleaf for $286 million" I turned it off. He may well be right but holy ridiculously pumpy batman.
 
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