1933 Industries Inc.TGIF.CNBUYDec 12, 2018Stock price when the opinion was issued
As of Oct 24, 2019. Market Open.
Cannabis survivor? He still owns it and likes it. He thinks it will survive and will thrive eventually. When they combined the infused and THC divisions they have grown both facilities. It took time to get them through a full harvest. Their primary market is Nevada, which is not able to be in full growth mode yet, but things are opening back up there. He likes their management and likes the deals in California that are leading to high margin brands being developed.
A cannabis player focussed in Nevada with a CBD and THC lines that they can sell throughout the U.S. They have a head start on their competitors. They have an extraction specialist who helps produce a lot of products licensed for Nevada. Their products are super-high margins and often sell out, but they've had small cultivation facilities. It's hard to get trimmed product in Nevada, but that will change when they open an 80,000-square-foot facility in Las Vegas. TGIF is a core position for him. Their new operations should start working in the fall which will boost revenue and cash flow. Investors expect facilities to start working sooner, but he expects a significant boost in revenues 18 months from now.
Two of their three divisions are big: CBD and THC in Las Vegas. They have human and pet CBD's delivered through dispensaries, but the Farm Bill will open up their expansion. THC division has products in strong demand in Vegas. Their problem is in getting enough supply. 1933 is moving into a new facility and show see new crops in August to ramp up their production in Q4. They plan to expand into other states. An under-the-radar stock.
He thinks 2019 will be a big focus in the US for them. The US farm bill will be good news for anyone involved in this market. This company is seeing year over year growth at over 19% in their THC division and they have a fairly good lead over their competitors and the margins are huge. He expects them to finish next year with revenues around $100 million and the market cap is close to this level. He sees it being super cheap.