Tired vs Wired: These Cannabis Stocks Will Make You Forget About Sundial Producers

There is an obsession with Sundial Growers (SNDL) among traders. The stock is up 140% since the start of the year and I think the only reason is that this is a low cost cannabis name that can be traded in all brokers.

Traders consider it “cheap” despite its $ 1 billion market cap. This is the same company that was sued for failing to disclose that it had the product returned for it contained mold and pieces of rubber gloves.

I have often made fun of Aurora Cannabis (ACB) for issuing shares as if they were candy. Sundial Growers is fast becoming the “hold my beer” answer to Aurora. Drowned in debt, Sundial used every pop of its stock to issue more and more shares. They’ve beaten the billion count and I’m not sure there’s an end in sight.

The company is in the process of moving from wholesale cannabis to retail, but it’s not unique to the industry. In fact, Sundial lags far behind many competitors in this regard. This hit them hard as net sales recently fell 46% year over year.

Maybe the Twitter guru leading you to this stock won’t admit it, but in my opinion, it’s a pump and a dump. Ironically, this may ultimately save the business as it has a stronger balance sheet, but with a valuation now well over $ 1 billion, there are much better places an investor can put their hard-earned money, whatever they want. an aggressive or moderate name.

Village Farms (VFF) should arguably be the first name on everyone’s list when swapping for something in place of the sundial. The fact that these companies have the same market capitalization is absolutely ridiculous. Village Farms offers the lowest cost of production, owns 100% Pure Sunfarms, has a huge greenhouse in Texas ready for CBD production when legal and has international reach. They also have 3 times more sales than the sundial, their cash flow is positive and profitable. Now tell me again why your guru bought you a sundial?

Buy a multistate operator. Which? Almost everybody. Illinois-based Cresco Labs (CRLBF) is at the top of my list. With a market cap of around $ 5 billion, you get the King of Cannabis of Illinois. Spread across nine states with 15 production facilities and 20 dispensaries, Cresco has one of the largest footprints in the United States.

Another alternative is Trulieve Cannabis (TCNNF). Third-quarter revenue of $ 136 million came just below Cresco, but the Florida-focused cannabis company produced higher EBITDA. And I wouldn’t blame anyone for going with Green Thumb Industries (GTBIF) or Curaleaf Holdings (CURLF).

The easiest thing to do would be to purchase the Advisorshares Pure US Cannabis ETF (MSOS), which will offer you all of the above stocks plus 25 more.

For those who want to stay in the aggressive lane, two smaller considerations are Juva Life (JUVAF) and Cybin (CLXPF).

Juva

Juva is a vertically integrated cannabis company in California. Its CEO actually received the very first license granted in the state. While the cultivation, processing and sale of cannabis through retail and distribution will be an attractive source of income, Juva is taking the road less traveled, which is expected to yield huge returns for shareholders. in the future.

Juva will combine IRB-approved patient research surveys with testing, as well as product integrity verification through a network of physicians and clinics as well as its own Class 5 cleanroom of $ 5 million.

This will not lead to phase I trials with the FDA. Instead, Juva will collect tons of patient-reported data. These patient-reported results for the precision cannabis products formulated by Juva will allow the company to show that X product used by patients Y generated Z responses / results. The most common target / goal for Z is the reduction of a symptom by a specific percentage.

For example, let’s say I reported a daily pain level of 7 on a scale of 1 to 10 before I started using a specific dosage / precision Juva cannabis formulation. Then after using this product for three weeks I reported a new pain level of 2 on the same scale, something worthless. Now imagine if 10 people or 100 people or 1000 people reported similar results. No, Juva can’t make a medical claim, but they might say something like, “Well, Mr. or Mrs. Patient, 85% of people with similar symptoms because you have reported pain reduction using this specific strain of cannabis. “

The short term result: Working with doctors, Juva can refer clients to strains based on results reported by users. The long-term hope is that doctors will be more likely to adopt the cannabis recommendation based on actual patient data.

With every patient report, Juva’s dataset grows and we know how valuable data is in today’s world. This will help him create a marketable and valuable medical database. This could inspire other players in the cannabis world to partner with Juva and build on the idea. Since large pharmacies won’t risk studies or trials until the federal path is clear, the data they can get from Juva would give them a huge head start over their competition when the track is free. Current study targets for Juva currently revolve around inflammation, oncology, neurology, pain management, and opioid reduction. Any eventual replacement of opioids would be a huge benefit to society and a huge financial risk to the big pharmaceutical companies.

Cybin

If Juva is the road less traveled, Cybin is the new road under construction. Cybin does not operate in the cannabis space but rather in the next evolution of drug therapy, psilocybin. But we are not talking about recreational use. Management sees itself as a life sciences company. The company is currently focused on the development of treatment regimens composed of proprietary psychedelic molecules and the development of their delivery mechanisms, such as the company’s proprietary sublingual film and inhalation delivery system.

Recently, the company announced that it would raise C $ 20 million. When the deal closed, they brought in over C $ 34 million, bolstering an already strong balance sheet to a balance sheet of over US $ 40 million on the books. And they’re going to put that money to work.

According to Cybin, the company intends to sponsor a Phase 2a and Phase 2b clinical trial in patients with major depressive disorder (MDD) later this year. The trial will be conducted by the University of the West Indies (UWI) and will follow the guidelines of the International Conference on Harmonization (ICH) and Good Clinical Practice (GCP). In doing so, Cybin may use the collected data as a transition strategy to enter other jurisdictions such as the United States, Canada, and Europe.

If any of these cannabis companies were smart, they would get hold of Cybin before it got too expensive. With a market cap of just $ 300 million, I think it will hit $ 2 billion before Sundial.

If the Sundial were smart, they’d go into that separate jar of candy and give Cybin $ 500-700 million right now and turn into something that can rival all of the names above. Until then, I would feel much more comfortable owning a mix of VFF, MSOS (or a few individual MSO names) and JUVA or CLXPF long before owning a share of SNDL longer than a scalp swap.