Industry sign banking arizona ppt later
good evening everybody welcome to the cresco labs cannabis wholesale king discussion and analysis if you find value in this presentation i ask that you please like and subscribe to my channel for notifications of new content click the bell in the upper right hand corner before we begin a disclaimer this presentation is an expression of my opinions my opinions which i base upon personal research this is not a recommendation to buy or sell stock i suggest you use this discussion and analysis as part of your study you're investing at your own risk in addition i may own shares in one or more companies mentioned during this presentation before we get into the good stuff here's a short story for you the company was approved to trade about two years ago in march of 2019 uh its first attempt to acquire another company was in march that's the same year uh there was a vitacan deal with which fell through and i think that was a blessing for the company because the company pretty much took a different route um and this has worked out real nicely for cresco later that year the company attempted to acquire trike companies uh which is a vertically integrated company which that has or did have operations in arizona and nevada and that deal was terminated in april as well one month later i can't help to feel that this is actually the way i feel that the former president and co-founder joe uh paltabiano was probably responsible for some of these setbacks uh the the man was fired in march of 2020 okay um for creating a these are not my words creating a toxic work environment bullying and intimidating female employees routinely directing subordinates to act without proper regard to regulatory compliance now that reminds me of can trust can't trust you lost the use of their facilities until about maybe six or seven months ago uh cantrust was run by brad rogers remember right rogers um he left us just before that happened i guess he he skipped town before he can get caught i think i don't know uh now he sits as a ceo of a of another company that's red white and bloom now red white and bloom uh had two founders those two founders have never been good for investors as far as i'm concerned now this is my opinion of course don't sue me but um i don't think they've ever done anything to help investors i think they've helped themselves out a lot and that's where brad rogers sits today that's the reason i don't invest in red white and bloom you may like it but i'm sorry but i can't risk my money on something like that uh as it sits today uh cresco is a company that should be trading higher i think uh it's not going to setback's lands grab those first two deals that wasn't too long ago and of course this guy caltabiano uh he's now the ceo of a new cannabis stack isn't that something it's funny how these people resurface uh the name of the spec is choice consolidation corporation where as the way i interpret it uh on the uh on the investor deck he's taking a lot of credit for building cresco this is a man that was fired uh now this fact presentation doesn't look too bad but i'd be careful with this one with that one because uh you have a lot of choices in the cannabis industry now things are starting to to settle out it's the winners are beginning to surface and the institutional buyers are telling you who they are you have a lot of good choices so don't take any undue risk i hope so i hope you folks will excuse me tonight um you know i'm some of you know but others don't i'm uh recovering from cancer throat cancer head head and neck cancer actually um i'm not bald-headed because of that i've got plenty of hair i just shaved it this is the third slide it's a business model and footprint and it's actually two slides it'll be a continuation slide this is a pretty long uh uh track here but i'm going to try and make it as smooth as possible so i hope i don't stumble for you on you uh now casco labs has a focus on just this focused and disciplined approach to creating a meaningful presence in the markets that matter the most uh unlike cure relief they don't they've never didn't stretch themselves out across 20 plus states with the overhang of poorly operating prop properties uh cresco has a much better uh a margin have much better margins than than careerleaf does cresco's strategy is to build the most strategic geographic footprint possible to achieve sustainable operations in those particular areas not to buy everything that moves it's a concentrated business operation um but it's not restrained uh to a single state like true leave has been i wouldn't be surprised if preschool surpassed truly even revenue on that note uh true leave has made uh acquisitions out of fl outside of florida now they're in six different states so they're moving right along as well and that's one of my favorite stocks by the way cresco's playbook includes the usually large states that make larger msos competitive but has a strong presence in california which the larger msos lack now true leave has one dispensary i believe possibly opening up another one in california i'm not sure about that but i know they have one dispensary there and uh columbia care has a footprint there but nothing that comes close to cresco now there's a spec uh the simplest gr maf i have traded it this much wasn't much of a trade i let it go um it's uh what's it called the parent company i'm kind of impressed by what the parent company puts out but uh on their on their in their under investor deck but um they they have a lot of super voting shares so you'd be careful with that one they they do have footprint in california they have two large facilities but i don't think they come close to what cresco has and you'll see later on a map of california that i'm going to show you uh cresco has really great facilities there and they have i believe 15 of the wholesale markets here that nobody comes close to them uh not even that new now the business strategy i've been talking about it all so far but the business strategy is actually to corner the market on the high sale quality branded cannabis products dispensaries if they can they sell across the spectrum from low cost to a high cost but this is what they really like to do now prior to their recent florida acquisition fresco labs had about 20 operating dispensaries i think this hybrid business plan is really well suited for this period in the industry's development now in my opinion if lice if limited license states evolve resembling anything close to california the one company that's going to benefit the most is cresco excuse me now i say this because independent dispensary operators and pure play cpg companies are going to need support from great wholesalers and distributors like cresco and cresco is a great one cresco's constantly consistently delivering high quality brands that people actually want this is a continuation slide as you can see the business model and footprint continuing continued uh the company operates in six i say it again six recreational markets that's because i say six because i'm including california five states in not california excuse me canada five states and canada equals six markets okay and five medical markets now those markets are in total massachusetts illinois uh michigan california arizona pennsylvania new york ohio maryland florida and they operate as i said in canada which is the recreational market though they're not selling recreational weed in canada yet cresco has eight established brands that are well received in about 900 dispensaries know another mso that's doing that on that's on that scale no um now this graph that you see here it's a nice graph but i don't think it's completely up to date so i'm going to read this to you and i'm going to try and read it as quickly as i can without without hurting myself the company operates three medical and don't use cannabis cultivation and manufacturing centers and nine dispensary locations in illinois and one medical cannabis one medical cannabis cultivation and manufacturing center and three dispensary locations in pennsylvania one medical cannabis cultivation center and one dispensary location in ohio three cultivation centers and one processing facility two two distribution facilities in california two cultivation centers and one manufacturing and dispensary location in arizona one processing center in maryland one medical cultivation cannabis cultivation center and four dispensary locations in new york one cultivation center and one dispensary in massachusetts and one processing facility in michigan and 22 i'm sorry and 26 nicotine vape stores in canada when they close the bloom and wellness acquisition in florida they'll receive a cultivation and processing facility and seven dispensaries with eight more to open within the next 12 to 18 months i'd say that's my estimate uh they've already got i'm sure the the licenses for that they already have a license for those dispensaries but i believe they also have uh the the retail spaces for them in pennsylvania and illinois they have 100 wholesale penetration they have the largest canopy capacity in illinois okay the largest on the west coast uh they're leveraging california california is as you know is highly fragmented in the third quarter they control 15 of the wholesale market there they're wholesale kings uh they sell their own brands and continue to add rent uh partnership rents uh uh you know they're gonna increase wholesale percentage in each and every state they're in this is what they do and nobody does it better and nobody's i don't i don't think anybody's going to do it better they've got first mover advantage in that respect uh they're doubling down to increase market share in the states that they are now they're not trying to just grab one jurisdiction after another and then wait one or two years to build on it or purchase assets that are not really up to par and try to fix things that doesn't happen with with cresco it does happen with a couple of other companies in the space in the wholesale space they have the first mover advantage excellent brands and brand partners nobody beats them okay this this is the key acquisitions in recent moves in october 2019 the company successfully acquired new york's rochester capital street capital this acquisition gave the company one of 10 vertically integrated cannabis business licenses that were issued by the state there were only 10 in new york uh besides licensing and footprints groucho street added good management and compliance executives which are of which i think believe most of part of the company today new york state will pass recreational cannabis pretty soon uh regardless of regulatory landscape cresco it's really well suited for this area uh new yorkers like their weed they like good weed cresco can give them that uh they like good products uh they have a great wholesale model as we just discussed and they run some of the best dispensaries in the industry in new york if if new york decides to go the way of california and allow it to be a free-flowing open market fresco is the company that's going to benefit most uh if it remains a limited license state they'll be on par with the other msos probably better than most the origin house california acquisition closed in january of 2020. that took time uh this was the company's as i see it at their defining moment the acquisition has allowed them to develop brands and scale in the largest most dynamic cannabis market on earth and they're doing they're they're doing well this very well before the major competitors really enter the space it's now 2021 we've got to recognize cresco as the most formidable player in that highly fragmented market this fragmentation has allowed them to bypass the need to operate large numbers of dispensaries to sell product in the state they don't have the retail operational overhang and this highly competitive market like med men does there are a lot of dispensaries in california why compete with that wait uh pad the pad your your wallet just a little bit and which is what they're about to do because they're really going to be profitable i believe either this quarter next they're going to show real profitability and um and then by the buy up those dispensaries later i think it's a it's easier and i think smarter uh another position as a leading distributor of branded products uh that they actually develop in-house they have the expertise to continue to do this in a meaningful way in other words they're not advertising a product that maybe profess some of these companies are taking how do you like that they're taking product and putting it in a uh in a jar uh it's just the weed they they had sold before and then saying oh look this is our new brand they don't do that but they actually develop real products that's what's going on here with these guys this is what actually differentiates them and this is why people love the dispensaries and the products that they can find at the dispensaries dispensaries in this respect they're way ahead of the curve i i think very few companies are actually doing that they don't need to bring in outside help they don't need to bring bell rock or slang or wanna or cookies to develop products and sell them in their stores they may they can but i don't think they really need to do that i think there are a couple two or three multi-state operators in the top eight or nine that actually need that support but not these guys and this is big it's really big because they have a leading distribution market share in some of the largest states in california pennsylvania illinois and now uh i think i believe ohio i think they have over 88 percent or about 88 percent of the dispensaries in ohio are being supplied by guess who cresco products now more recently in january of uh of 2021 uh on the 14th actually they announced the acquisition of bloomberg wellness now this was an all-share a transaction that values blue man over 200 million dollars bloomer gives them seven strategically located uh dispensaries with way more locations under control and plans to open this gives a company 27 operating dispensaries with numerous more licenses that they can open in other in other areas in other states they've got four new ones that they just acquired in in ohio as well which gives them the maximum in ohio five now florida doesn't have a cap on dispensaries if you take a look at what truly has truly has over 70 dispensaries out there uh sutera well which which is actually now uh a parallel which is which is uh this part of this back acquisition uh or service acquisition that's parallel um they've got i think 39 dispensaries you can just open up as many dispensaries if you can afford it in florida and as many as you can get licensing for i guess boomer comes with 54 000 square feet of cultivation space and uh they have a planned expansion for cultivation capacity processing lab in edibles kitchen now bloom also comes with a delivery hub a fleet of about 15 vehicles that offer 24 uh 48 hours statewide service now i know i'm being a little long-winded here but i'm trying to get a lot in preschool has shown the ability to raise capital like green thumb industries and a couple of the other larger larger msos institutional investors have already taken an interest in crisco a real interest in january 2021 the company raised 125 million from seven new and existing institutional investors they're using the funds to accelerate growth but not just to buy to buy properties in other states they've done that with bloom and wellness they're very methodical about what they're doing once they they get a grasp of the space of the space they tend to build on it in other words they're doubling down in the states where they feel they have the opportunity to dominate as they have in illinois and pennsylvania and now they're starting to do in ohio this is the reason why i believe uh i think was today i read something about them uh uh filing a shelf prospectus i correct me if i'm wrong for a hell of a lot of money um they're going to build out their florida operations pluma bloom of wellness is well known in florida they make good products and their per square foot uh revenue is very good it they they've got something here going on here in f
orida these cresco guys um they signed on february 9 2021 they signed an exclusive distribution agreement with award-winning california producer as well um on february 16th they closed at the acquisition that i mentioned in ohio the verdant creations it gives cresco four additional dispensaries in ohio bringing their total number to five which is the most taken it's allowed by the state and they also have 25 000 square feet of cultivation capacity in the state which is the maximum amount out there uh the company distributes 88 percent as i said of of ohio's dispensaries uh a flower to flower that's what they're distributing to these dispensaries flower and they'll distribute all those brand products brand products in ohio in the future um cresco's moving right along but this is showing you the share structure um it's the best i can find i couldn't find a better breakdown than this in a in a in a in a pic good graph why don't you want to call it that uh um the institutional numbers should be a bit higher um i think that's a little bit off here but the numbers are pretty good uh institutions have been trickling in to this mso i think it should be about three or four percent maybe more uh we should see this figure also increase when banking reform is enacted which is going to happen this year um for msos like cresco the risk reward ratio is very favorable okay you can't mitigate risk any better than simply buying and holding one of these great companies for now and i really like cresco now i'm starting to look like a a bit of a cheerleader here right i'm starting to sound like a cheerleader but i'm i'm not if there's something meteorically wrong i'm going to let you know i don't see anything me but it's really horrible about this company according to new canada's venture they adjusted operating income is 32.1 million now given banking this company is a slam dunk and tim seymour is going to tell you that in a video that i've embedded in this video uh in this in this powerpoint presentation later on uh the metrics feed for themselves you can re read them right here uh p e 38 a forward p and e 38.4 uh price the book price of sales i have it all in there for you just read it it's a strong stock buy according to stock tips analysts ratings they take the uh the consensus of a bunch of different analysts and they tell you what the overall rating is and simply wall street which is a service that i subscribe to that's what i like to use to as a jump off for my research i go there first i do some reading i look at the different companies see what's good and what's not and where i should go it kind of points me in the right direction i don't just use that i'm using a lot of other sources here are some comparisons for you in the cpg space i like the best companies that operate in the high and low end of the market the best companies in both ends okay uh i think they i think um i think uh they have a competitive advantage okay the high premium products the low-cost producers uh if they're the best in those areas i think they really have a competitive advantage because they can differentiate themselves from competition a lot better there are a few winners in the mid market level and i know that cresco does everything they sell from low end to high end but cresco uh does differentiates itself quite quite quite well they're the king of wholesale and they're coupled with a large number of high quality premium products and they sell i mean it's evidence in their product line which you can see uh in the branding slide of the investor deck now the graft on the left here uh is from new cabinets ventures uh their expected growth in the fourth quarter that is cresco's is is quite high it's i believe three hundred and five perce uh oh yeah three hundred and five percent uh brock's seeing states in in one of his articles that this earning seasons should serve as a catalyst i think it will too i don't know how big but i think i think it's going to uh affect the stock price of all of these companies all the good ones now the graph on the right here on your right uh it's for my my spreadsheet my third quarter cresco uh my third quarter spreadsheet for multi-state operators cresco has year-to-year growth of 300 some of this i got from new canada's ventures and elsewhere um according to new canada's ventures um uh this year at 305 percent uh this quarter 305 is basically uh what they did last last quarter they they increase sales year over year by 323 percent uh and and i i expect at least that much if you hear dogs in the background it's because i have two wonderful wonderful dogs that want as a puppy the man's a thing the animals of terror uh corporate governance and uh executive management well top tier management has a lot of cpg experience i don't think anybody matches them for that uh there are many names that stand out at uh at cresco uh but charlie bachcho is at the helm and i suggest you read his full resume i this is taken off the internet of course it's not it's not everything he's done but he's a very talented individual he's well spoken uh and in the next slide you're going to see a video interview of him on cnbc which i think everyone should watch uh it's it's no wonder they've been able to navigate the legal environment of cannabis uh so successfully this guy is very bright their team is very similar to uh green thumbs i think uh but with better cpg experience now if the company continues to execute i see the stock price rising quite a bit uh i'd like to know what you think let me know in the comments section after watching the video now this slide uh has the video presentation all you have to do is click on it and you'll be able to watch it uh my take is on the left that's what i got from the video uh there's a clear path to legal legalization legislation now and it's probably going to be a step-by-step process at least i hope it is because the longer it takes the better it's going to be for me and you for all investors um this disconnect uh between the stock price and and banking and the industry itself so there's an and of course uh in in the institutional investors they haven't they're not moving in very quickly they can't most of them are are too afraid uh that's a great arbitrage for investors i mean this is the time to get in if you don't get it now you you're going to be kicking yourself in the butt in years to come access to capital markets well that just equals more acquisitions and bigger more robust uh infrastructure now cresco's going to use their shares and when banking opens they're going to or they're going to uh they're going to take loans uh to to bring what they owe uh their the debt the debt level down uh and that's gonna help the company a lot this will allow them to uh to really develop their infrastructure uh and and uh spread their footprint throughout the country this is going to be a very big company cpg branding is where the money is and cresco speaks that language um that's their market uh banking uh you'll hear tim seymour in the video say the this banking is a slam dunk now i'm long crystal i'm along several other cannabis companies but i'm really long cresco i really enjoy this company um i've learned a lot from this research and i hope you've enjoyed it if you have please uh click like and um of course subscribe to my channel the more subscribers samaria and ring the bell in the upper right hand corner to ensure that you receive notifications when i do put up a new video which is going to be about once a week now um and if you can uh if you want to join our my investors group on facebook the old school investors group i think you'll enjoy it thank you good night and god bless
