Rally On, Traders!
Canada just made a big legal pivot to legalize an entire industry from coast to coast. The big names like Canopy and Aurora are not only on fire but leading the entire market up there.
But down here, state after state is following that lead. Massachusetts just opened its first dispensaries to help all those students (150,000 in Boston alone) "relax."
Playing the map is critical. And that's why CLS Holdings (CLSH) is turning into a one-company green boom all its own. State after state, the map changes color, from blue or red to GREEN. Colorado. Washington. Nevada. Oregon. Wherever it goes, CLSH is there, most recently breaking into Massachusetts . . . the "people's republic" itself.
That's why private investors are lining up $40 million to get a taste while they still can. Think what a company this ambitious can do with that much cash! Go anywhere, do just about anything.
Strike price on that private offering is $1.10, by the way. Us small-time players have a little time to beat them to the punch:
What drove that 90% leap? For one thing, CLSH is ramping about as fast as it gets. It’s active in Nevada, where green products have barely been legal a year and already does $420 million retail. That’s coming from ZERO and it’s double what the experts expected early on.
CLSH bought into Las Vegas retail a few months back via a company called Oasis, which currently does $850,000 a month in sales. That’s above what anyone expected. The covenants on the deal provide a million-dollar BONUS if Oasis does $20,000 a
DAY.
If Oasis earns that bonus, it’s okay. It's a measure of firecracker SUCCESS. On that basis, we’re looking at a run rate north of $7 million a year. We can’t really forecast a growth rate yet, but even that’s only 1.6% of the Nevada opportunity as it stands right now.
Plenty of room to grow that share. And that's what CLSH is doing. They raised $5.75 million USD and another $13 million Canadian to expand. As the CEO put it recently, they need to TRIPLE production just to meet existing demand.
They've got extracts and other value-added products in 20 dispensaries now. With deep distributor relationships, they can go aggressively after the other 45 I'm seeing in the state.
Nevada green is all about tourists, by the way. 40 million party people a year, Las Vegas alone. The last time I was in a Vegas cab, the driver couldn't talk about anything but how the tourists always ask where they can get to the recreational store.
Monthly turnover in the state already reached $40 million . . . and it's still ramping up as fast as the party people can leave the airport and call their Uber.
That's the market CLSH has just opened up. Right here at home. They're ambitious. They think they can TRIPLE production by the end of the year and move that product into the store.
A lot of that product is branded and proprietary. CLSH is already a distributor here, selling "City Trees" in 20 stores from Vegas to Reno. Proprietary is usually a good thing for margins. We like that!
And it's still early stages. The goal appears to be vertical domination. CLSH grows the plant. It processes the raw material into value-added oils, extracts and so on. It distributes the material to stores. Now it's active on the store side as well, closing the "last mile" from back to front.
It isn't abstract or even especially esoteric. There's no jargon here or weird technology to get your head around, just a market that didn't even exist a year ago and now CLSH is a player. At every step along the way, CLSH gets its "ticket" punched.
Add up the steps and there's real money to capture here. The stock is flirting with $1 a share now. Production plans suggest at least a 3x revenue ramp, not counting any of the steps along the way. That's just the BASE!
The store can do $38,000 a DAY when Vegas is really humming. Last I heard the company's 22,000 square-foot warehouse had room for vast expansion. All local, all domestic. Subject to Nevada law.
They have a reason to be confident. Floor traffic in the store is tracking 400 people a day, each buying above $50 on average. What they're buying runs the gamut: oil concentrates, vape pens, tinctures, you name it.
Massachusetts is bigger. Bigger population than Nevada or even Rocky Mountain High itself. Getting into the state via a dispensary and 80% of a grow facility changes the game. There's a lot of students in Boston, Cambridge, Worcester, Amherst, etc. etc.
etc. Do the math.
You don’t have to go to Canada to get exposure to these numbers. You don’t have to worry about what happens when you try to get back across the border or just call your greenbacks home. Let the chill come. CLSH makes its own heat right here.
But at the rate it's been moving, if you want that heat, the time to act is now.
Happy, Happy, Happy Trading!
