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Examining Cannabis Stocks Earnings: CGC, CRON, MSOS - YouTube
Channel: TD Ameritrade Network
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the pro and that's alan brockstein
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managing partner new cannabis ventures
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and principal at 420
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investor people love to invest in
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cannabis for years and they did so well
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with them and then they pulled back
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it's not an easy group to invest in but
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let's talk about the earnings that we
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saw
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what did you think about the earnings
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what did they tell you or teach us
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what earnings losses you mean
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yeah exactly that's a good way to say it
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you're 100 correct i should say
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quarterly report
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yeah exactly so uh well first of all
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it's nice to meet you nicole thanks for
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having me today
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and uh so some of your listeners may
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recall in my prior appearances here
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i've talked about how investors are real
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focused on the canadian space
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really for liquidity reasons and so
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you'll get companies like canopy growth
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and chronos group that in my opinion are
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not the leaders in cannabis
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but they take a lot of mind share uh
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so i i urge everybody as they listen to
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what i'm about to say
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to understand that these companies
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are not the best companies in my opinion
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at this time and so with canopy growth
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which
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continues to be at or close to the
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largest market cap of any company
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uh you know i just looked it's it's
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unchanged over the last three years
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the company continues to bleed
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they are losing share in their domestic
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market
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in canada and that was the case one
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bright spot
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was they do have a retail
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operation that's doing well although you
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can invest in pure play retailers
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in canada that are doing better in the
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adult use space
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the overall canadian market grew
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something like 75 percent
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year-over-year in the quarter and they
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only grew in the 20s so they're losing
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share uh the real hope for the company
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is to be able to come into the united
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states but there's just unfortunately no
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quick path for that to take place so
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canopy growth continues to suffer
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from uh sluggish growth uh they even saw
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a slowing of growth in europe
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and their other businesses aren't really
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moving the needle so their losses are
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massive
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and they're really eating into their
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cash flow and the biggest surprise to me
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they took on some very expensive debt
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about four months ago
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and we're still not clear why uh i
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thought for sure they would
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make some sort of announcement now
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kronos group
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uh is my favorite among the large lps
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but i
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don't recommend any position right now
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but for anybody that wants to be in the
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large lps
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they have a very small footprint in
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canada unfortunately it's losing money
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but the good news is they're sitting on
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still
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1.1 billion dollars they have
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a really good strategic partnership with
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altria so one day they should be
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acquired by altria
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when that is possible and really what
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makes it possible
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isn't necessarily legalization but it
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rather it's just the ability for altria
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to buy them
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and maintain their listing in the united
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states that's really
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that's amazing so that's a foreshadowing
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of some sort right there
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to murders and acquisitions people to
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watch i think the big story over the
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last
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couple of weeks because we had til ray
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report last week
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yeah and now these two
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it's really all these companies
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are saying the same thing and by the way
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the world's largest cannabis company by
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revenue scott's miracle grow
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hinted to this as well everybody wants
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in
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on the u.s operation operators
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these are the best companies but just
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like it's really easy
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to trade a canopy growth or a chronos or
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a tool rate because of their listing
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status
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it's not as easy for investors to
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participate in the real
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american cannabis industry so these
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companies
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are unlike canopy growth they're seeing
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huge revenue growth they're generating
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positive ebitda and in many cases
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despite onerous taxation
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positive net income so it's to me
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this is i mean i get it it's hard for
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investors
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to buy companies that trade on the
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canadian securities exchange
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or the otc i understand that but
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there are ways around it there's a etf
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called msos
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you were just you had a guest on uh
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discussing
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uh etfs and well i think there's some uh
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challenges for that etf uh
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you know for anybody that can't
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participate
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in the cse or otc markets
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it's a great way to to at least
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mirror the performance of what i think
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is a really attractive part of the
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market right now
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so you do think it's attractive so an
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etf like msos which is
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a pure cannabis etf there so that has
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upside potential
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over a period of time three to five
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years or what are you thinking
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oh well hopefully three weeks but uh
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ah good that's even better well so
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here's the deal nicole we came in
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why three weeks what happens in three
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weeks earnings season
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we're going to get some great reports
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starting next week
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with what companies so i'm talking about
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the largest companies but it goes
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beneath that so just to name the largest
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american
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cannabis operators we're talking about
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companies like cure leaf
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gti or green thumb industries true leave
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presco labs verano holdings columbia
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care
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terrace and etc so
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i don't want to limit my enthusiasm but
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those are the largest companies
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it's just this is the biggest story in
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cannabis that
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these companies are growing literally
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and figuratively
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and yeah go ahead nicole are all of
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those in the msos
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by the way oh yeah so all those are in
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msos
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msos has 31 holdings right now almost
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all of them
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are what are called that's where the
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msos
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comes from multi-state operators
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although
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there are some single state operators
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but these american cannabis companies
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they are scrappers they're not like the
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canadian lps
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that were capital markets games that
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just kept selling stock
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raising equity getting lucky with some
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strategic investors
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these companies have struggled big time
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yet they're succeeding and so i i think
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if there's a single take away
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it's the all the attention focused on
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canopy growth
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needs to be refocused towards the
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american cannabis industry right now
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you
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