Comments

It would surprise me. Debenture is extreme, with revenue of just a few million. Next few months will be challenging for TGOD.
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lilsatoshi Barkworth
@Barkworth, Thats all baked into the price at these levels IMO
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Barkworth lilsatoshi
@lilsatoshi, Agreed. But what will potentially drive the price up from here, is my question.
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lilsatoshi Barkworth
@Barkworth,

-It's over sold.
-Market cap does not reflect assets; cash on hand, infrastructure, IP, retail channels, etc.
-USA on the brink of legalization IMO. (Will boost whole market)
-2.0 products just about to see real sales.
-Sales in Europe (even though its hemp derived revenues I think having the channels in Europe this early in the game gives them a first mover advantage)

-Were about to see our greatest cannabis quarter yet due to the pandemic, sales, consumption, # of stores all going up this Q

Im sure you know all this... Just trying to think of bigger catalysts on the horizon.
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Barkworth lilsatoshi
@lilsatoshi, Yes. I agree with all of the above. Now is the time to buy, if you believe TGOD will make it. Personally, I believe that there are better plays with better fundamentals right now. Though I really do like the organic focus of TGOD, and I believe that they are the only one with that angle.
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lilsatoshi Barkworth
@Barkworth, 100% man, This might not be the right way to look at it but I put it this way.

The legal channels just went online = supply
The black market still thriving = supply
4 plants per household = supply -> (even though I doubt the average Joe's out there are doing much growing, still)

conclusion is that regular dry herb is over supplied.. The winners will be the ones that stand out and do it differently. CPG plays creating brands, interesting new products for both rec and med and of course Doing it organically I think tgod hits all those diffs
+1 Reply
lilsatoshi Barkworth
@Barkworth,

Financing for cannabis and hemp operations
Before applying for financing, you must have the appropriate Health Canada license(s).

Follow these key success factors:

Management Assessment
The following will need to be understood in-depth:

Executive Management Team – knowledge, expertise, history and background
Compliance Officer – with the evolution of changes in Health Canada regulations, do you have such a position and if not, who is looking after ensuring you are compliant?
Market
What is your marketing plan? Do you have any arrangements with any of the Provinces?

Repayment analysis
An in-depth credit analysis needs to be done and will focus on:

Cash flows and projections
Needs and sources of Operating requirements including equity and working capital
Security
Guarantees
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lilsatoshi lilsatoshi
@lilsatoshi, A loan and reimbursement of partial construction costs from Farm Credit Canada (FCC.ca)
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Barkworth lilsatoshi
@lilsatoshi, That kind of news would certainly see it rebound somewhat, though investors remain largely sidelined. You make a good case for the bull side, and I appreciate that you have a thesis. I agree with the thesis, to be fair, but I see some stong points for a bear case that are hard to ignore.

Most importantly, less than 1 year cash runway. This could mean that if you time your entry wrong, and are long from above your identified channel, you risk breaking even on good news, then see the stock sell off again on news of fund raising through dilution. In addition, their cash burn rate is high and they are currently fighting for survical. They don't have a clear path to profitability, and revenue is expected to increase with about 60% pr year. That is not a lot, considering that they don't actually have a lot of revenue right now. That means they will remain a small player for a long time to come. This is a small player, offering limited growth and a high risk in the current market.

Me, I am looking for growth stocks. Now that the cannabis bubble has come down, certain assets will start to see higher highs at some point, while leaving the weaker players behind. By comparison, I think that XLY is much safer bet. High growth potential, products with very good customer feedback, trading below fair value, solid fundamentals, 26% debt to equity ratio, more than one year of free cash flow, strategic partner, business model similar to that of CRON. XLY has a high debt to equity ratio, though. On this point TGOD is strong, but I think it is better to have cash to keep the doors open and the lights on, than to be free of debt.

Personally, I think a $100M valuation for TGOD is quite a lot. If it would bounce to $0.90, it will trade at a valuation of just under $300M.

With the entire cannabis field at or below fair value, I think there are better plays, offering more growth and safety for your investment.

My 2 cents. I appreciate the debate. Thank you.
+1 Reply
lilsatoshi Barkworth
@Barkworth, very good points
+1 Reply
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