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đź’¸Earnings Season Is In Full Swing đź’¸

Author

William McNarland
May 08, 2024

GM Everyone,

Earnings season has kicked off, and as of this morning, there is a lot to appreciate thus far. Ascend Wellness led the way, and we had the opportunity to sit down yesterday with CEO John Hartman to discuss the results. At 7 AM today, we received Verano's report, which also had much to admire. There was a slight weakness in the top-line numbers, but margins expanded, and free cash flow is at an all-time high—something we will absolutely take. This might be a major theme for this quarter: muted top-line growth but greatly improved profitability, a narrative we can live with unless we continue to see top-line retraction going into year's end. Join us at 4 PM today as we sit down with Verano’s top brass to dive deep into the results and get you the facts you need.

Today’s letter can be read in 7 minutes and 26 seconds.

What's Driving the Market Today?

Stock market futures are flat this morning; these are the top highlights:

  1. Fed Stance: Despite hawkish comments from Minneapolis Fed chief Neel Kashkari, markets remain stable, shrugging off potential rate hikes.

  2. Treasury Auctions: Strong demand for a $58 billion three-year note sale helps stabilize Treasury yields ahead of a $42 billion 10-year auction.

  3. Oil Price Drop: Crude oil prices hit their lowest since March 11, driven by rising U.S. inventories and cautious supply expectations ahead of OPEC+.

  4. European Rate Cuts: Sweden cuts key interest rates, prompting expectations of similar moves by the European Central Bank and Bank of England.

  5. Stock Market Dynamics: Wall Street gains offset by Disney's decline and mixed Asian market responses; European bourses set for record highs.

TDR Exclusive: Ascend CEO John Hartmann on Q1 Earnings

Facts that matter:

  1. Ascend Wellness reports a 24.70% YoY revenue increase, reflecting strong growth.

  2. Ascend has stopped paying 280E taxes and applied for a refund for past 280E taxes paid.

  3. Ascend Wellness achieves quarterly and yearly gross margin growth.

Quick Hit: Ascend Wellness Holdings (CSE: AAWH.U, OTCQX: AAWH), a multi-state operator in the cannabis industry, reported its Q1 2024 financials yesterday. In this article, we will examine its recent financial results, covering key metrics such as revenue, cash and debt positions, and gross margins, to highlight the company’s progress and potential areas for improvement. We will also highlight our exclusive interview with Ascend CEO John Hartmann regarding Q1 earnings.

Small-Cap Stock Highlight: Andrew Peller 

Facts that matter:

  1. Andrew Peller is a standout small-cap stock for wine industry investors.

  2. Small-cap stock Andrew Peller has a solid history of 44 years of dividend payments.

  3. Andrew Peller is expected to focus on growth after resolving supply chain issues.

Quick Hit: Andrew Peller LTD (TSX: ADW.A, OTC: ADWPF) is a small-cap stock worth considering for investors interested in a unique vertically integrated wine business. The company, which operates in the Niagara region of Canada, has a long history of paying dividends for 44 consecutive years. Andrew Peller LTD’s business model covers every aspect of wine production, from grape to store, and it operates all of “The Wine Shops” in Ontario. The company also partners with Wayne Gretzky for WG wines. Notably, Andrew Peller faces challenges similar to those of cannabis licensed producers, particularly concerning excise taxes.

Canopy Growth Completes US Integration of Wana and Jetty

Facts that matter:

  1. Canopy Growth’s US integration of Wana and Jetty is a foundation for US expansion.

  2. Wana’s commitment to innovation strengthens under Canopy Growth.

  3. Canopy Growth’s strategic acquisitions are aimed at operational synergies.

Quick Hit: Canopy Growth Corporation (NASDAQ: CGC) has confirmed that its subsidiary, Canopy USA, LLC, has exercised options to acquire leading cannabis brands Wana and Jetty. This acquisition is a foundational piece of Canopy Growth’s US expansion. This integration will help Canopy focus on enhancing its revenue streams and cost-efficiency within the Canopy USA ecosystem.

TDR Cannabis Earnings - Ascend Wellness and Chicago Atlantic

Join our live TDR Exclusive Trade to Black Earnings episode with Ascend Wellness (OTCQX: AAWH) CEO John Hartmann to discuss their Q1 2024 earnings. Afterward, we have Chicago Atlantic's (NASDAQ: REFI) Co-CEO Peter Sack, who will also share commentary on Chicago Atlantics Real Estate Finance Q1 2024 earnings release.