Opinions
Bruce Campbell (2)
1933 Industries Inc.
TGIF-CN
BUY
Jun 28, 2019
$0.460
Stock price when the opinion was issued
agriculture
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BUY
They just build a new facility in Nevada and Las Vegas. It has taken a couple of quarters. They have cash on the balance sheet. The market is concerned about debt. The last couple of quarters were heavy on the spending side. Now we should see their numbers ramp up. They have some real specialty products. They are moving into the California market. Their infused business takes a different approach where they focus on being in the dispensary. (Analysts’ price target is $0.60)
agriculture
BUY
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.
agriculture
WAIT
They got their new facility up and running, planted and were harvesting and then COVID shut-down happened. They were going to depend on tourists. They had some changes at the top and they are trying to cut back on costs and restructuring some of their capital structure. They did a deal with debenture holders. We need to see Nevada and Las Vegas open up.
agriculture
WAIT
He owns the convertible debentures Has been a past pick. Early on, they earned partnerships in order to manufacture in Nevada, specifically Las Vegas. They built a plant and start running last summer during Covid, unfortunately. So, they had disappointing sales. The catalyst would be a post-Covid reopening with pent-up demand likely seeing tourists going to Vegas and consuming 1933's products. 1933 has strong brands and sell products at a premium. They've improved their balance sheet. Be patient.
agriculture
BUY
The bloom has been off the rose of the cannabis sector for 20 months. TGIF has had operational challenges for 24 months, but there's a new team that has raised production and profits. They extended their debentures, which were an overhang. We need to see the cannabis market continue to show an uptick. Conventions are coming back in Nevada, where TGIF thrives, and is a tailwind. Coming quarters should show stronger numbers. Also, 1933 sells some high-margin products, which bodes since visitors to Vegas spend in excess.
agriculture
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.