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Sayshu Medicherla Profile picture
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16 Mar, 7 tweets, 2 min read
$CCHWF Earnings - My Takeaways:

1. Strong quarter, with highest qtrly EBITDA ever. Key part of the "improving profitability" story
2. Top markets in 4Q: CO, MA, PA, OH, IL
3. CA and FL should be big drivers in 2021
...
4. On CA, company is a real believer in the market (unlike most of the MSOs). CC looking to build regional density and scale accordingly. Company also looking to be a major wholesale player
...
5. On FL, $CCHWF believes it will be one of their best markets. Company working hard here including launching edibles (2021) and driving operational efficiencies. Sees a lot of "white space" in FL, which I see as a positive readthrough for $TCNNF (and others)
...
6. Company leaning into "call option" markets like NJ with increased capex spend. $CCHWF preparing for the future
7. Company has a small presence in Europe, but is firmly focused on the US and sees more opportunity here (readthrough for $CURLF)
...
8. Company launching new retail format in 2Q21. Saying it will include some "technology rollouts." Curious to see what those are. Company also working on building out customer insights platform. $CURLF talked about this as well. $JUSHF and $AYRWF have been talking about it
...
9. Last round of stimulus had a direct impact for $CCHWF last time. Too early to tell what the impact is this time, but likely positive
10. GLeaf expected to close early 3Q
...
11. Overall, a strong qtr for the company. The company will continue to grow but I think the story primarily revolves around margin improvement. Stock is undervalued relative to potential, but I suspect it takes a couple qtrs of sequential margin improvement to re-rate.
#MSOgang

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More from @Sayshu_MM

Sayshu Medicherla Profile picture
1 Oct
This morning, $TCNNF completed its acquisition of $HRVSF. A big moment for the company, and congrats to @rivers_kim and team for closing the deal in under 5 months. Some highlights and thoughts from their call this morning:

...
1. PF company is the largest and most profitable MSO (by a small amount on revenue and by a meaningful amount on Adj. EBITDA)
2. PF Company has 149 stores (37% more than nearest comp) and 3.1mm sq. ft. of cultivation (~2mm is in FL)
3. Core markets: FL, AZ, PA
...
4. The biggest new (and positive) thing on the call was that the PA regulator did not require any divestitures. The PF company will have 15/16 open stores in PA with the opportunity to have up to 21 stores. They will also hold 3 cultivation licenses
...
Read 12 tweets
Sayshu Medicherla Profile picture
10 May
Merger Monday! Quick thoughts on $TCNNF / $HRVSF deal:

1. Announced price of $4.79 implies ~$2.1bn equity value and $2.25Bn EV for $HRVSF.
2. Multiples matter in M&A. $TCNNF was trading at 10.5x 22 EBITDA and is buying $HRVSF for 15.5x 22 EBITDA...
3. Its reasonable to ask if $TCNNF overpaid for $HRVSF, but also easy to understand why it is strategic. Combined entity has instant scale in FL, AZ, and PA, and gives $TCNNF something to work with in several other states...
4. Lot of questions this morning on regulatory process and caps. $TCNNF said they think there is a path to preserve value in what they bought, which I interpret to mean that if they have to divest assets/licenses they will be able to recoup value. Really only matters in PA...
Read 13 tweets
Sayshu Medicherla Profile picture
8 Apr
$VRNOF Earnings - My Takeaways:

1. Strong headline numbers on their first ever qtrly report. Total revs in 2020 up ~200% on PF basis and +247% for Verano standalone and +134% for AltMed (FL) standalone. Mostly organic per my understanding
...
2. Margins were very impressive. 63% PF GMs and 48% PF EBITDA margins. Looks like Verano standalone EM was 45% and AltMed was 53.5% in 2020. These are $TCNNF level margins with a more diversified footprint. EBITDA recon. looked fairly clean to me. There were some ??s on that...
3. Core states: IL, FL, AZ, NJ, PA, OH, MD. Company executing on capacity expansions in most of these states and deepening retail footprint throughout. Recent M&A and commentary suggests they aren't done in AZ and PA. I anticipate they will acquire cultivation in PA before YE
...
Read 12 tweets
Sayshu Medicherla Profile picture
23 Mar
$TCNNF Earnings - My Takeaways:

1. Solid beat on revs and EBITDA
2. Now selling 1 ton of weed/week(!)
3. Dominant position in FL = v strong financial metrics. 2020: 74% GM, 48% EBITDA margin, GAAP EPS of $0.53, CFO positive. Can't be overstated how strong these metrics are
...
4. In particular, I'm impressed by the magnitude of GAAP EPS. The company generated GAAP profits (and ~$100M of CFO) AFTER paying a 60% effective tax rate in 2020. Folks got excited about $GTBIF's GAAP profitability last week - $TCNNF easily beating that bar
...
5. We should expect some margin dilution over the next 24 months as the company ramps operations outside of FL. Unlikely $TCNNF will be able to achieve such high margins outside of FL so expect blended margins to mix down (not a negative, just math)
...
Read 8 tweets
Sayshu Medicherla Profile picture
18 Mar
$GTBIF Earnings - My Takeaways:

1. Strong beat across the board. 4Q revs/EBITDA up 2.3x/4.7x yoy, mostly organic. 37% EBITDA margin. Positive on a GAAP net income basis for 2nd straight qtr. 4th straight qtr of positive cash from ops. Execution continues to be v. strong.
...
2. 54 disp open rn; looking to hit the cap where they can. Driving deep into their core markets
3. CPG mix continues to increase on a net basis from 26% in 1Q to 32% in 4Q.
4. Sounds like they pulled forward a little revenue in 4Q from 1Q21
...
5. Company invested $110-120M of capex in 2020. "Will go bigger" in 2021
6. Company doesn't think AZ is as attractive as their other markets. I recently heard @Bkov9 say something similar about FL. Interesting given other MSOs are aggressively investing in these two states
...
Read 7 tweets
Sayshu Medicherla Profile picture
11 Mar
$AYRWF earnings - my takeaways.

1. Micro misses on 4Q revs and EBITDA but the execution continues to be v strong. 48% organic growth
2. EBITDA margins ticked down due to investments as the company prepares to integrate assets and build foundation for future growth.
...
3. $AYRWF mgmt are high quality operators. The 5 NV dispensaries in 4Q generated $21.3MM run-rate revs each(!). MA disp run-rate grew to $11.8MM from $10.1MM in 3Q. MA wholesale grew 109% yoy and 22% qoq. NV performance likely tough to replicate but strong foundation
...
4. Company delivered its 7th straight qtr of positive EBITDA and 6th straight qtr of positive CFO. FCF was $22MM for the year...
5. Great year but, the $AYRWF story is a 2021 and 2022 story, on that front...
Read 10 tweets

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