In my opinion most people on here underestimate the capability and vision of management and the board. These guys and and now a couple of ladies, are not stuffin around, they mean business and big business. In my view they have always had their eye on the prize and have positioned the company in a way that is careful and cautious with shareholder funds, but always with the intention of being a major operator. This is why they have built Mildura (to be big) and done it in a stage approach (to be cautious). Clearly, they have enough cultivation capacity at Mildura to satisfy GSK (at least for the next few years). Sure it will cost them extra $$$ to execute on the next few stages, but don’t forget NAB initially were willing (in principle agreeement, I think) to lend $95m for the construction of the greenhouse. If cann have a big dog like GSK onboard, I am sure they are still willing to lend us that extra 45mil, so this would at least get Mildura developed to stage 2 (50T). But before there is any need to get there, demand would need to be requiring the expansion. Let’s say, just for conservative reasons, GSK takes “full” market share here in Australia and and is selling the forecast $200million worth of product. Based on guestimations (using the 50mg capsules), that will be approx 1 million packets, which translates into 10T of flower. All guesstimates, I am not claiming I know exactly the specifics, but that’s a good ballpark I reckon. Therefore, it’s clear Mildura has the grow capacity to satisfy GSK and would reassure them Mildura will have additional expansion capacity if they want to take the product for other markets.
so, cultivation won’t be an issue. extraction, using the pilot scale extraction machine would be, but like I said, cann have already made it clear their intentions to install large scale extraction in the future. Maybe this will cost them, but what’s 1 or 2 mill?
This leaves the satipharm capsule manufacting capability. And to be honest I have no idea what that is, but I don’t see it being an issue. They have gelpell ag in Europe doing manufacturing and I am sure they can bring in another kit if they need it for extra capacity (again, what’s another $1 mill?)
the point I was trying to make at the start of this post, is management have always been planning for this. Growing and manufacting 70T of flower at Mildura. They know what they are doing, in my mind this evaluation thing all comes down to the trial results.
i think new interest in the cannabis sector has been exhausted, and now we are left with the believers who are hanging on, and the folks who have given up or are forced to sell for various reasons. And of course day traders, who are responsible for the volume, just playing around with themselves. This is the only way I can explain the share price for being were it is. For me, this is and has been for a while now, an opportunity of a lifetime to buy in at these prices. It seems the only thing that will launch the share price is revenue and profits. So we should all think ourselves lucky we have backed cann, because I believe next financial year will be a break even year, with exponential growth on the horizon. Canns potential is huge, but what’s even more important is revenue, this is why Mildura is a massive turning point in canns history, because it will drive that revenue growth.
CAN Price at posting:
29.5¢ Sentiment: Buy Disclosure: Held
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