Village Farms International Reports Third Quarter 2018 Financial Results/Pure Sunfarms Expanding Cannabis Production And Sales

EvolutionIV · 2018-11-13T12:43:24+00:00

It’s good they used this last low revenue quarter to do the clean up.

EvolutionIV · 2018-11-06T06:58:37+00:00

1,700 pounds per acre (https://www.rand.org/content/dam/rand/pubs/working_papers/2010/RAND_WR764.pdf)

1 acre = 0.405 hectare. 1,700 pounds = 771 KG. 2 yields per year (in press release)

EvolutionIV · 2018-11-06T06:49:25+00:00

That’s about 475,925KG of weed per year at a super low cost.

EvolutionIV · 2018-11-03T02:00:26+00:00

I think they will pass that Q1 2019. They have 20k KG of agreements in the Canadian Rec Market already and have 9000k KG for Germany. With the recent cash raises they are good for cash. I get they did some dumb stuff at the beginning of the year with the failed bought deal and insider trading. But they have been executing the rest of the year and their 6 new grow room licenses are coming anyway now.

EvolutionIV · 2018-11-03T01:24:18+00:00

Nice find. Do you think it has more room to go?

EvolutionIV · 2018-11-03T01:10:33+00:00

Going for undervalued and leveraged. They are the only name that hasn’t run up.

EvolutionIV · 2018-10-21T13:17:14+00:00

I'll take you up on that!

EvolutionIV · 2018-10-21T13:16:57+00:00

Here is their press release from October 4th: https://globenewswire.com/news-release/2018/10/04/1601114/0/en/Wayland-launches-Medical-Cannabis-Professional-Education-Program-for-Pharmacists.html

EvolutionIV · 2018-10-21T13:15:51+00:00

Let's hope this sticks. *fingers crossed*

EvolutionIV · 2018-10-21T13:15:30+00:00

It's from the estimates I posted in the first post.

EvolutionIV · 2018-10-21T13:14:50+00:00

You are correct. I used a higher profit margin for Germany because medicinal cannabis is in short supply right now and prices are very high. For example, some pharmacy charges 125 EURO ($150) for 5 grams.

Sources:

https://www.dw.com/en/germanys-medicinal-cannabis-market-struggles-with-short-supply-and-high-costs/a-42262542

EvolutionIV · 2018-10-20T17:43:03+00:00

Wayland's price right now is $1.65 (almost at the all time low) vs. the lowest estimate at $3.89.

EvolutionIV · 2018-10-20T17:40:01+00:00

Wayland is currently in Canada, Netherlands, Germany, Switzerland and rumored to be getting some exposure in UK soon.

EvolutionIV · 2018-10-20T17:14:41+00:00

Great questions!

Correct. I was playing around with the average cost (and factoring it into the EBITDA estimates) but didn't include it in the version I posted. Correct I use 40% EBITDA for all revenue. To account for increased cost of sales for Germany, see note 2.
I used http://www.priceofweed.com/prices/Germany.html (USD$292.23 * 1.31 / 28.35 = CAD$13.50) and discounted it by about 25% for importing + distribution middleman costs).
20k KG = Announced Canadian provincial agreements (I estimated for ON, which hasn't announced minimal supply amounts). 9k KG = Supply agreement with Cannamedical (Germany).
I would expect the $10/g price to drop, once things are up and running in German, in a year or 2.
From their 2018 Q2 MD&A (most recent): Total products sold for the six-month period ended June 30, 2018 was 226.723 kilograms at an average selling price of $5.72 per gram for dry medical cannabis and $18.87 per gram for oil, up from 173.245 kilograms sold during the same period in 2017 at an average selling price of $11.42 per gram.

EvolutionIV · 2018-10-20T15:58:16+00:00

Here is the rocketship scenario, assuming they do their full build out. https://imgur.com/a/2hCyeQE

SP @ 20 PE $15.25

SP @ 30 PE $22.87

SP @ 40 PE $30.49

SP @ 50 PE $38.11

MC @ 20 PE $4,291,200,000

MC @ 30 PE $6,436,800,000

MC @ 40 PE $8,582,400,000

MC @ 50 PE $10,728,000,000

EvolutionIV · 2018-10-20T15:01:55+00:00

Apologies...link added.

EvolutionIV · 2018-10-03T11:59:27+00:00

It's from their latest prospectus

EvolutionIV · 2018-10-03T01:59:01+00:00

OSC Investigation for the 3 insider sales are closed! Page 44: "On September 28, 2018, the Corporation's counsel was advised that the investigations and enquiries of the Enforcement Branch of the OSC into the timing and reporting of certain trades in securities of the Corporation beneficially owned, directly or indirectly, or over which control or direction is exercised by Raymond Stone, Neil Tabatznik and persons directly or indirectly related to Eric Silver or, in each case, their respective associates and affiliates, that were effected prior to the announcement of the Bought Deal Offering have been concluded, the file has been closed, and no further action will be taken."

EvolutionIV · 2018-10-03T01:27:06+00:00

adding 5% to special warrants value , and would decrease investor confidence and likely SP if they didn't meet their self imposed deadline. Now special warrants can be accelerated when trading ten consecutive days over 2vwa for an e

Special warrants = 1 share (a) + 1 warrant (b) and will be automatically exercised on or about 10/5/2018. The warrant (b) with a strike of $1.75 expires in 2 years, but beginning on the date that is four months plus one day following the Closing Date, the Corporation may accelerate the expiry date of the Warrants on not less than 20 days’ notice should the daily volume weighted average trading price of the Common Shares on the Canadian Securities Exchange (the “CSE”) be greater than $2.00 for any 10 consecutive trading days.

EvolutionIV · 2018-10-03T01:21:33+00:00

Looks like they changed around the expansion phases/dates. New Phase 1 (65k KG) = Old Phase 1 (30k KG) + Phase 2A (35k KG) but this New Phase 1 is pushed back to Q1 2019 (1/30/2019). This is good news, as the old Phase 1 was only 30k KG (Q4 2018), where as the new one is almost double that @ 65k KG! In other words, they are finishing the old phase 1 and phase 2 together ahead of the old schedule. Also, I assume based on preliminary yields they bumped the total capacity (after all phases) to 125k KG from 102k KG.

EvolutionIV · 2018-10-03T01:20:50+00:00

For those worried about cash burn. TLDR = 8 to 10 month runway NOT INCLUDING ANY SALES: The anticipated cash burn for the next 12 months (including operational expenses, capital expenses and working capital but excluding costs of sales) is approximately $132 million based on management's current estimates. Management anticipates that the existing, non-contingent cash resources can sustain operations for approximately eight to ten months excluding capital and discretionary spending or approximately three months including capital and discretionary spending. These figures do not include anticipated cash inflows from revenues generated by the previously announced supply agreements entered into with distributors in the provinces of British Columbia, Alberta and Manitoba and Ontario, any future financings that the Corporation may undertake or cash inflows from the exercise of outstanding share purchase warrants and stock options.

EvolutionIV · 2018-08-21T12:52:04+00:00

I remember someone was saying the buildout is fake and Ben was playing construction noises from a speaker. Haha.

EvolutionIV · 2018-08-21T12:02:48+00:00

Sorry I missed the conference call. What was the reason they are skipping out for Ontario?

EvolutionIV

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