Opinions Fabrice Taylor
AlcannaCLIQ.TOHOLDMay 08, 2018
Stock price when the opinion was issued
As of Apr 01, 2022. Market Open.
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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)
Fabrice Taylor
Ryan Modesto
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.
Colin StewartDominant 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.
Colin Stewart
ACB paid a premium to the market price, hoping that it will become a distributor. That has not happened yet. The market price has not risen to the price ACB paid. This company is a former income trust. Like all other income trusts, they neglected their CAPEX. Their starting to do maintenance on their stores now, making them look better. The new management team will spend a lot of money on this. It will be messy for several quarters. Longer term, after they clean up their stores and the Alberta economy picks up again, will be a good holding. The dividend is not high enough to make the stock exciting for investors while they wait, so he doesn’t own it, but if he did own it, he wouldn’t be in a rush to sell it. If they do start to distribute marijuana, the stock will pop.