Michael SprungAlcannaCLIQ.TOCOMMENTDec 11, 2013

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. No longer backed by Aurora. Multiple attempts to redesign stores. Multiple products sold at steep discounts. Deteriorating margins. Unlock Premium - Try 5i Free

It was an income trust, and so they distrbitued too much money and didn't keep enough cash to refurbish their stores and stay competitive. That hurt, then they the oil price fell (they're based in Alberta), then they made some dumb acquisitions. Aurora Cannabis and the Bitove family have since invested. They've cut prices to wipe out competition, then bought that competition--twice. This has worked. Eventually, they will raise prices now that they've wiped out those competitors. Alberta law limits other liquor stores within a certain radius from existing shops, so they have a moat. And they're getting into cannabis. This stock is starting to move. (Analysts’ price target is $8.05)

It's now half-liquor, half-weed, but liquor hasn't seen much growth in Alberta, so one part of the business is sidways and the other is a question mark, probably upwards. There are too many if's with CLIQ, but he's been watching it for a
long time. 3.3% dividend

He still likes it. They are a leading liquor retailer and will get into Cannabis. They will be getting into Ontario as well as where they are in Alberta. They generate free cash flow and earnings already. It is a stealth way to play the cannabis sector.

The liquor and cannabis businesses are two distinct and different businesses. CLIQ-T are going through a very extensive renovation this year. They are doing the right long term thinks in the business but it will impact it short time. There is great long term upside.

Dominant position in Alberta liquor, which is competitive, so they're diversifying. Trying to acquire licenses in cannabis, which is an interesting opportunity. Liquor business in turnaround mode which will improve over next few years, but market isn't giving value to the cannabis division. Will have a strong position when the licenses come through.