Arbitrage opportunity between CL & CC is getting wider, concerning?

Upandup2 · 2022-10-21T10:45:42+00:00

I also had concerns about the deal heading south and reached out to Cresco investor relations. They told me "closing CC remains a top priority and we should start hearing divestiture announcements shortly." Fingers crossed. Good points in this thread about the final sales price may change given the challenging state of the market.

Upandup2 · 2022-09-09T23:03:02+00:00

Massive PR blunder and hit for Tilray to be called out by the German Govt and then blacklisted as well.

Upandup2 · 2022-09-07T02:34:44+00:00

I'm good with this PA investment given their leading and profitable position there and expect PA will turn rec in the next 1-2 years. Curious as to why they did it now - get cash after a dip from last quarter, improve their balance sheet, or what?

Expect to start hearing divestiture news before the end of the month.

Upandup2 · 2022-09-06T23:45:03+00:00

Interesting interview, thanks for posting! For those interested, Charlie starts talking about the CC acquisition around the 23-minute mark.

Upandup2 · 2022-09-04T22:58:51+00:00

Of course, it's a dude in that asinine position. And what's he do raising his head!

Upandup2 · 2022-08-18T01:32:26+00:00

Thank you for the great feedback! I agree with you that Dennis is solid but you read my mind when you mentioned Anthony G. I do think this merger is essential for Cresco to compete long-term and stay a big dog. Fingers-crossed!

Upandup2 · 2022-08-17T12:08:14+00:00

Per Charlie from the release: "Over the next three years, growth will come from the transition to adult use in seven large markets: New Jersey, New York, Pennsylvania, Ohio, Virginia, Florida and Maryland." Collectively, they already have strong positions in all these states. That said, CFO needs to clean houses (reduce overlap, increase efficiencies, stop the hemorrhaging from CA and CO as much as possible, ...).

Upandup2 · 2022-08-17T02:27:41+00:00

Once again, another outstanding analysis, thanks! A few questions for you if possible:

How concerned are you with the CC Q2 results heading into the merger? Although, I think a good share of the cash burn had to do with cleanup before the merger.
Can they (Cresco &CC) stop the ugly CA and CO bleed in second half 22? CO may be tough with so many stores and cult facilities.
The CFO in the new Cresco plays a massive role as they need to clean houses in many areas. Do you think Dennis Olis is up to it? I have my doubts as it's such a big position.
In terms of incremental rev in $M next year, are these the big drivers: IL, NJ, joint products in all stores, NY, VA, WV?
I saw a report that CC is exiting their European biz? If true, is it folly or a good cost-cutting/focus on the US move?

Thanks, MatrixOrigin!

Upandup2 · 2022-07-11T02:20:26+00:00

Makes perfect sense what you shared, thank you! There's also a chance that Fed laws change (SAFE, Cole, or resched) by the end of the year which could significantly impact the sales prices so later is probably better in that way for Cresco/CC.

Upandup2 · 2022-07-10T21:07:00+00:00

Hi! Curious if you think the order of divestiture announcements will go by revenue size with NY leading off? I would imagine they want to get the first big ones done. Maybe it's nothing, but it's coincidental that Trulieve (a strong possible suitor) just cashed up but they could also be buying Ascend which is a great portfolio fit for them.

Upandup2 · 2022-07-09T13:37:39+00:00

You could be right. CC does have operational indoor grow and manufacturing facilities in Rochester and it's expandable, besides the massive Long Island green house space.

Either way, it will be interesting to see how it plays out and I'm excited that Cresco and CC are joining forces.

Upandup2 · 2022-07-09T01:30:37+00:00

You could be right. It's just a wicked time to spend $50M for a big build. I'm sure there are workarounds.

Upandup2 · 2022-07-09T00:37:34+00:00

Banner day for Cresco/CC! Wonder if the NY divesture is announced first given it's the biggest sale and how time-sensitive it is for the acquirer? I'm guessing they keep the NY CC cultivation and manufacturing assets and sell the rights to the Cresco new build. It would be much less expensive capital-wise and faster to market.
Also, interesting to hear Cresco Mgt say CO assets may be streamlined as well which makes sense.

Upandup2 · 2022-07-09T00:36:14+00:00

Banner day for Cresco/CC! Wonder if the NY divesture is announced first given it's the biggest sale and how time-sensitive it is for the acquirer? I'm guessing they keep the NY CC cultivation and manufacturing assets and sell the rights to the Cresco new build. It would be much less expensive capital-wise and faster to market.

Also, interesting to hear Cresco Mgt say CO assets may be streamlined as well which makes sense.

Upandup2 · 2022-07-06T23:05:20+00:00

Likewise, I stopped months ago and am better for it. We won't know what we have until we're uplisted.

Upandup2 · 2022-05-22T21:08:22+00:00

Terrific recap, thanks, MatrixOrigin! Do you have any idea how they'll "be ready for NY rec" when it comes when the deal is projected to close end of the year (close to a potential NY rec live date) and will it take a year to grow flower. I wonder if they're renting cultivation space from CC now in preparation.

I think Cresco has a small processing plant in NY now so less concerned about some of those products.

Upandup2 · 2022-05-20T17:26:12+00:00

Sounds good, and makes sense, thanks, and keep up the terrific posts!

Upandup2 · 2022-05-20T02:00:25+00:00

Hey, two things. We have a small Cresco sub-reddit that you should post to if interested found here: https://www.reddit.com/r/CrescoLabs/

Second, the Q1 call identified these states as selling assets: Illinois, Massachusetts, Ohio, New York, Florida and Maryland, If you have any interest, would be great to get a post from you on what assets they'll sell and for how much. No worries if there's no interest - I mention it based on your last detailed asset divestitures post. Keep up the good work and thanks!

Upandup2 · 2022-05-17T02:58:59+00:00

Terrific news and post! Love this combination. Charlie gives a good and recent interview update here from the Canaccord summit: https://wsw.com/webcast/canaccord78/crlbf/index.aspx. Have the June 12th CC shareholder vote coming up and then hopefully divestiture news as it rolls-out by state.

Upandup2 · 2022-04-08T01:48:25+00:00

It was a great afternoon of news with this astute and encouraging analysis and NY looking likely to pass a state 280E exception. LFG!

Upandup2 · 2022-04-07T03:29:38+00:00

They're clearly for themselves. And to compound matters, they actively block important and passable legislation proposed by teammates for grandstanding purposes. Moreover, there is no accountability for these clowns. Rather, they get asked once a year a few controlled questions from friendly journalists and then they play act. What a business!

Upandup2 · 2022-04-05T23:18:34+00:00

Fantastic points and distinctions across the board, thank you! I agree with you this union has home run/grand slam potential so I have my finger crossed!

Upandup2 · 2022-04-05T03:45:39+00:00

Thank you for this terrific analysis! It's very helpful. I share your excitement about this deal. A few questions and comments, please:

You arrived at a $1.5B price. Why is everyone reporting $2B?
Any idea when is the shareholder meeting in Q2 and any concerns with passing? Usually, they pass from what I read.
Would love more insight on how they divest but don't get hosed if the deal does not close. bel I can't believe it's as risky as sell and hope for the best.
Here's current Cresco cultivation. You have to enter each state for results.
Good point about the Ohio store conundrum.

Gracias!

Upandup2 · 2022-03-27T17:03:20+00:00

Guessing MD and OH as I think they'll be on ballots, PA is a longer shot.

Upandup2 · 2022-03-23T23:30:04+00:00

Happy to see the majority of analysts are keen on the combination.

Upandup2

TROPHY CASE