Some interesting results in Half Yearlies out from the industry.
The Cannabis industry is now coming into its 5th year, and if we consider the normal 5-year prove up time for establishing a new company then the latest set of financials are, IMO, showing some promise where companies are reporting data that would indicate a settling in and a 'coming into their own right', despite all competing for a piece of the Aussie pie, in a heavily saturated industry.
I did see through 2019 - 2020 a few casualties fall along the wayside unfortunately, and the sector was affected by bureaucratic red tape, COVID19 delays, legislation issues (TGA/ODC), suspicion (AMA) caused by an imbalance between the available anecdotal (experential) vs empirical data (recorded/proven) as well as broad-acre hemp crop difficulties.
In spite of some of these difficulties and holdups, there are some positive stories and numbers now emerging from the sector as indicated in some of the companies' balance sheets, compared to the same reporting period last year. Seeing a lot more green and some 'single period' profit reporting results (see Dec 2020 data below)
I am confident that we will see some good success stories over the next couple of years as legislation is freed up, Roadside Drug Laws are relaxed for Medicinal Cannabis use and Cannabis/Industrial Hemp establishes itself, once again, as a stable tradeable commodity.
Free Cash Flow (FCF) is a good indicator of future profitability. This data set ranks Cannabis companies by their Free Cash Flow. A positive FCF (not achieved yet) is where we would like companies to be heading. Positive FCF's allow companies to stand on their own two feet without the constant hand out to shareholders for support or going to banks(loans) to keep the doors open and lights on.
The Heat map indicates increases and decreases in performance for the period. Feel free to draw your own conclusions.
(all data should be fact-checked - this is not investment advice)
Cheers ...59
