Obligatory: SIR, THIS IS A CASINO. This isn't financial advice in any way shape or form.
TLDR: This run is going to end with the cannabis stocks back down 50-80% or more from the levels they are at. $CRLBF is the real play here for the smart players that want USA exposure to the legislation. We just like the stocks now, not later.
Ok, listen up normies.
Yeah I'm talking to the newbies specifically because the OGs here already know everything I'm about to share, but your insufferable groupthink and movement mentality shit pissed me off enough to make a post. Don't post DD if you have no clue. Ask someone for help and take your ridicule until someone comes along to help you.
I used to post weekly DD on Sunday here a couple of years ago before one of you literally contacted my wife IRL. Not even kidding. So I made a new account. This is my first contribution back and I'm going to try and ensure some of you don't blow your chance at massive gains here by explaining what is actually going on.
CNBC and anybody telling you that this is just 'momentum' and 'sentiment' is lying to you. The hedge funds are playing these right along with us. Don't ask me for proof, this isn't Twitter. Reasons why they are playing with us:

When there is money to be made, hedge funds and HFT funds are there before you
The floats are so small on these they can take sizable positions on both sides and stand to have massive gains, all the while handing you guys the bags.

That's all you need to know.
So in response to all you posting "real DD" with why these companies are the best and you're going to hold to the moon and never sell:
I'm over it -- I can tell instantly how uninformed you are when I read some poorly thought out DD about why CGC or TLRY or APHA is a long term play because they're talking about USA legislation. These are Canadian companies. Get your head back on straight. You're here for the trade and the bet, not for the fundamentals, and if that's it, then fine, ignore the rest of this post and pick an exit, and if not, read on so you don't hold more bags.
This place has never been one to care for fundamentals, but let me talk some sense into you so you can post some gain porn and I can tell you to fuck off instead of you guys all yelling "MaNiPuLaTiOn ShOrT LaDdErS"
Let's take a look at some of today's gainers:
(changed tickers for automod avoidance)
$USMJay - Penny stock, worth absolute nothing for a reason
$SNDL - Up ridiculous amount, have a billion shares outstanding, just diluted them all the other day
$TeeRTeeC - Terra Tech, they grow weed, from all indications, do it poorly
$OhGeeEye - lol
$HUGE - Probably the only one in the lot worth a YOLO on the chance they get an acquisition like GW Pharma did but they don't have the same product portfolio or prospects GW has.

Now, if you're simply playing this to get in and get out, great for you. The people saying (and believing) "$SNDL $10 EOW! HOLD THE LINE" and stuff like this are just absolutely brand new normies and are clueless, do not listen to them. If you yolo'd on cheap calls in Dec/Jan, congrats, take your gains and don't be like the $GME bagholders.
If you're investing in any of the names I just posted above, expect any money you put in to at some point in the next 12 months be worth approximately 20% of what it is worth now. Literally. They're far worse than the main bunch (CGC, CRON, ACB, TLRY, APHA) but the main bunch is nothing to write home about either.

THIS IS WHAT IS REALLY HAPPENING:

Tilray had 40% short interest. It's not $GME level, but it's pretty high. When the stock crested $40 it really started taking off, why though? Notice this week's FD option chain:

https://preview.redd.it/kyqeiwljeug61.png?width=917&format=png&auto=webp&s=0c1b48e12518515f09582289bd7f8a4f47a09629
Tilray has a 95M share float, those 42 calls represent roughly 1.5M shares held as a hedge just by themselves. Previous to this run up, that represents roughly 5% of the average daily volume of the stock, BY ITSELF. Those are shares that until Monday can be considered removed from the float because they're held as a hedge. They may get loaned out to be shorted, but that will only speed up the squeeze here.
The important part: Today (2/10/21) the stock fell hard after open down to around 44 and found massive support all the way back to up 66. The most sold front week call? $40/$42 strikes. Premium when I screen shotted this? $22.20. Stocks going to pin above $60 for awhile likely, unless people are stupid enough to buy the OTM calls, in which case, it may squeeze itself higher.
Smart hedge funds are going to pile into this, sell you the calls, shove the price up to keep selling you calls, then watch them all evaporate worthless in one of the future weeks in the chain, dump back the shares to help shove the price down, oh and did I mention? They shorted the top.

https://preview.redd.it/ivy78woneug61.png?width=392&format=png&auto=webp&s=0604940c09126dc6d5b96a9cc5f17e4013ae5d9d
It's just another plain old stock acting as a derivative of the option chain gamma squeeze. That's it, with a bit of short squeeze thrown in there and a WHOLE BUNCH of WSB fomo. The shorts are covering and pushing up the volume, likely re-shorting on the way up, and then you have WSB fomo'ing in to round out the total: a massive volume of 200 million shares today. You've got people that think this thing will skyrocket to 500+ (and it may) but the stakes get higher and higher each ladder up you take and the moves become more violent and more likely it comes all the way back down in short time the quicker it goes up.
Might it get there? Sure. But be prepare to take profits when it does because...

ITS CALLED MEAN REVERSION. THIS CANT GO ON FOREVER.

Not to mention, the moves you are seeing are in completely overvalued companies, with horrible fundamentals, and poor prospects.
Oh what's that? CGC got some CBD treats for Martha, seems fitting that something ill is going on in this industry considering she went to prison for insider trading. If the dog treats get you excited about the stock, Martha belongs here more than you do.
200M shares today means people who were long term bag holders cashed out and the shares have turned over the float two times in two days. That also means the shorts have turned over and are now short again. It means the HFT firms are feasting on all of you. It means Citadel is making a pile on the spreads.
What to take away: An amount of shares equal to the entire float has changed hands, or in other words, fewer reason for people to bag hold. Fewer people that have to hedge. Fewer people that have to cover. Fewer people to help stabilize any of these upper price tiers, and keep the price stable by holding, and more reason it's going to collapse sooner (or later).
But, this IS a casino after all...

Let's see what happened with TLRY last time this happened (oh, you're new here? Yeah, this isn't the first time):

https://preview.redd.it/p652mvgreug61.png?width=587&format=png&auto=webp&s=d95f2b0ccf946717859bffb28601dfd29e999e0b
Looks eerily familiar to something else recently. Last time this occurred it traded between $100 and $300 in a single week timeframe.
For those of you that are new: THIS IS NOT NORMAL. STOCKS DO NOT ALWAYS DO THIS. You are in the infancy of a new age of trading, but people still know, fundamentals matter a whole lot more than everyone is leading on, and these valuations are getting extremely overextended.
Eventually, in the first squeeze Tilray bled off until the pandemic hit and it piled down to $2.43 a share. At $2.43/share, I would have bought it. Even at $10/12/14. At these levels? You're just ultimately out of touch but I look forward to the loss porn.
So in short, again: Sir, this is a casino.

Timeline of events, and how to not become a bagholder:

$APHA earnings are good, stocks pop a bit, and level off
Legislators pull a pump and dump since they probably have calls and say planning on some laws regarding changing the schedule of cannabis (notice: we will likely NOT get outright legalization, just re-scheduling)
$CGC earnings are actually awful, with the caveat they have profitability on the horizon
$TLRY gets a UK deal
$TLRY starts going insane - since $APHA is a reverse merger with a .81 value share to share, it starts pumping, people start buying the lower priced cannabis stuff and entire sector starts moving on "overall strength"
There's no strength, there's a gamma squeeze backed by investor momentum, and a short squeeze on Tilray.
This is going to come back down violently then plateau out like GME and pull a slow bleed the rest of the way back down, just like the second graph I posted. There is no fundamental or even POSSIBILITY of better fundamentals immediately on US legislation. The cost to enter the US market will most definitely cause capex and goodwill capital outflows, and set back their profitability since there are established MSO's in the USA already. The USA opening the market to these companies will only further degrade the actual balance sheets/income statements and slow down profits and you know what institutions and shareholders like? Yep. Profits.
Finally, how to not become a bag holder: The market can stay irrational way, way, way longer than you expect. So this may go on for a bit, but refer back to 7. It's coming back down eventually, set expectations and pick your exit, or start to shave off your position as it goes up and let a portion of it run. Eventually, you have to sell to actually realize a gain, don't forget that. Once you do, close the chart, remove it from your watchlist, check back in on it in a month if you want to get back in when you have a clear head.

The Canadian operators are literally the last companies I'd play off a US legislation play, and one of the only ones worth owning in $APHA for the arbitrage play on the shares. But if Tilray comes crashing back down, $APHA will as well along with all of them, and you have to hope you lose a lot less on $APHA crashing than you'll make on the arbitrage between the share price.
THIS IS ALL JUST "SENTIMENT" BASED YOLOING BY THIS SUB. It has probably driven uneducated retail into the trades also - who will also become bag holders.

Let me put this in big letters for those of you that can only read big font and use crayons:

NONE OF THESE COMPANIES HAVE REAL USA MARKET EXPOSURE, THEY ARE CANADIAN COMPANIES. THEY DO NOT HAVE MARKET POSITIONING AND ARE NOT POISED TO TAKE ADVANTAGE OF US LEGALIZATION.

IF ANYTHING: IT WILL HURT THEIR BOTTOM LINE AND SET BACK EARNINGS BECAUSE OF CAPEX AND CASH OUTFLOWS TO GET A POSITION IN THE MARKET AND SOME OF THEM WILL GO OUT OF BUSINESS BECAUSE OF IT, WHILE OTHERS WILL FALL OUT OF PROFITIABILITY TO ENTER THE MARKET AND COMPETE WITH THE REAL PLAYERS.

^{Who are the real players? (Cresco $CRLBF and Curaleaf $CURLF} ^{- do your own DD or wait for a post next week}\***************)*

Conclusion: Nobody should plan on holding these long term. Don't let someone else hand you bags like I did this morning at open on the pop unless you plan to hand your bags off and find the next play.
You likely will not time the top. Pick a place you're ready to exit the trade, exit the trade or slowly shave your position, close the graphs and don't fomo back in. Just be done with the trade afterwards. You're likely not a cannabis multi millionaire and will not be one, unless you were loaded to the brim with low cost calls from last summefall or unless you literally yolo'd $10M into one of these a few weeks ago, and in that case, you belong here, congrats on your gains and fuck you.
THIS IS A SECTOFOMO SQUEEZE. AND IT WILL END. THIS IS NOT SENTIMENT AND CNBC IS TROLLING US WITH IT LIKE WE HAVE THE POWER.
And if you think WE are the ones driving the price up, the hedge funds are definitely watching and playing and they can bring these down at will at almost any time they want. You're holding a lit molotov, the only question is: will you throw it before it blows up?
The rest of you? Plz fuck off with you 20 shares @ $2 on Sundial, fuck off with the "HOLD THE LINE SNDL $10 EOW", fuck off with your fomo, and fuck off with the "movement" and "lets push this to the sky" stuff and most importantly don't post DD if you have zero clue what is going on.
You know what "lets push this to the sky" sounds like? Market manipulation. We're not in this together, I literally handed one of you a bag to hold this morning and even if they go up for another month, eventually, that bags gonna be heavy and I ain't coming back for it. I ain't tipping you either.
These prices are insanely high for these companies. The multiples are out of control, and if you buy in at these levels, well, best of luck, I hope it works out for you. I'm fighting the fomo of extended gains, and will continue to put my money elsewhere.

SIR, THIS IS A CASINO.

Positions: I had the meme stocks like you literally all of them minus ACB and CGC. I took gains and bought 500 shares of Cresco prob increasing to 1,000 tomorrow, and kept the rest off the table to pay my wife's boyfriend's rent.
Disclaimer: I have Tilray puts I'm prepared to average down on and diamond hand like a real boss because this is coming back down.

Edit: You know what I forgot to add? Some of the biggest holders, the cannabis ETFs and funds, you know what they did today? They trimmed their positions. And they will continue to do so because of fiduciary responsibility and when you de-concentrate shares into the retail's hands, the moves will get more and more finnicky and more and more violent.
Edit 2: Some normie tried calling me out like I never saw this trade coming or am a hedge shill, https://imgur.com/a/asAVkiC - I had thousands of shares, these are just the trades from this month, and I'm not advocating a buy, I sold mostly all of them this morning except for adding Cresco back in. You want the gain numbers? You do the math, I'm not your math tutor, I sold like 6 minutes after open for most of them. I have Tilray puts for next week and will be buying a few months out at various strikes as it continues to climb.
Yeah, I think these are coming back down in price sooner rather than later, that isn't extraordinary information for a common sense person.
Edit 3: I'm getting piles of messages from people who used to follow my DD back in 2018/2019. Yes, it's the real SoRefreshing, proof: https://imgur.com/a/Pn5LqCe
Edit 4: Eh don't request me with "What should I do with XX" be a big adult grown up and decide your own risk tolerance and exits. I responded to the first 10 or so. Now I have 100. I can't. I disabled chat messages.
Edit 5: jesus with the awards go buy TSLA calls this is WSB not fb/twtr disclaimer: have TSLA calls
Edit 6: Oh look, they're pinning it around the $42 strike. Go figure.

The Russia Mafia is part and parcel of Russian intelligence. Russia is a mafia state. That is not a metaphor. Putin is head of the Mafia. So the fact that they have deep ties to Donald Trump is deeply disturbing. Trump conducted FIVE completely private meetings and conferences with Putin, and has gone to great lengths to prevent literally anyone, even people in his administration, from learning what was discussed.
According to an ex-KGB spy...Russia has been cultivating Trump as an asset for 40 years.
Trump was first compromised by the Russians in the 80s. In 1984, the Russian Mafia began to use Trump real estate to launder money.
In 1984, David Bogatin — a convicted Russian mobster and close ally of Semion Mogilevich, a major Russian mob boss — met with Trump in Trump Tower right after it opened. Bogatin bought five condos from Trump at that meeting. Those condos were later seized by the government, which claimed they were used to launder money for the Russian mob.
“During the ’80s and ’90s, we in the U.S. government repeatedly saw a pattern by which criminals would use condos and high-rises to launder money,” says Jonathan Winer, a deputy assistant secretary of state for international law enforcement in the Clinton administration. “It didn’t matter that you paid too much, because the real estate values would rise, and it was a way of turning dirty money into clean money. It was done very systematically, and it explained why there are so many high-rises where the units were sold but no one is living in them.”
When Trump Tower was built, as David Cay Johnston reports in The Making of Donald Trump, it was only the second high-rise in New York that accepted anonymous buyers.
In 1987, the Soviet ambassador to the United Nations, Yuri Dubinin, arranged for Trump and his then-wife, Ivana, to enjoy an all-expense-paid trip to Moscow to consider business prospects.
A short while later he made his first call for the dismantling of the NATO alliance. Which would benefit Russia.
At the beginning of 1990 Donald Trump owed a combined $4 billion to more than 70 banks, with $800 million personally guaranteed by his own assets, according to Alan Pomerantz, a lawyer whose team led negotiations between Trump and 72 banks to restructure Trump’s loans. Pomerantz was hired by Citibank.
Interview with Pomerantz
Trump agreed to pay the bond lenders 14% interest, roughly 50% more than he had projected, to raise $675 million. It was the biggest gamble of his career. Trump could not keep pace with his debts. Six months later, the Taj defaulted on interest payments to bondholders as his finances went into a tailspin.
In July 1991, Trump’s Taj Mahal filed for bankruptcy.
So he bankrupted a casino? What about Ru...
The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.
The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said."The violations date back to a time when the Taj Mahal was the preferred gambling spot for Russian mobsters living in Brooklyn, according to federal investigators who tracked organized crime in New York City. They also occurred at a time when the Taj Mahal casino was short on cash and on the verge of bankruptcy."
....ssia
So by the mid 1990s Trump was then at a low point of his career. He defaulted on his debts to a number of large Wall Street banks and was overleveraged. Two of his businesses had declared bankruptcy, the Trump Taj Mahal Casino in Atlantic City and the Plaza Hotel in New York, and the money pit that was the Trump Shuttle went out of business in 1992. Trump companies would ultimately declare Chapter 11 bankruptcy two more times.
Trump was $4 billion in debt after his Atlantic City casinos went bankrupt. No U.S. bank would touch him. Then foreign money began flowing in through Deutsche Bank.
The extremely controversial Deutsche Bank. The Nazi financing, Auschwitz building, law violating, customer misleading, international currency markets manipulating, interest rate rigging, Iran & others sanctions violating, Russian money laundering, salvation of Donald J. Trump.
The agreeing to a $7.2 billion settlement with with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities and causing the 2008 financial crisis bank.
The appears to have facilitated more than half of the $2 trillion of suspicious transactions that were flagged to the U.S. government over nearly two decades bank.
The embroiled in a $20b money-laundering operation, dubbed the Global Laundromat. The launders money for Russian criminals with links to the Kremlin, the old KGB and its main successor, the FSB bank.
That bank.
Three minute video detailing Trump's debts and relationship with Deutsche Bank
In 1998, Russia defaulted on $40 billion in debt, causing the ruble to plummet and Russian banks to close. The ensuing financial panic sent the country’s oligarchs and mobsters scrambling to find a safe place to put their money. That October, just two months after the Russian economy went into a tailspin, Trump broke ground on his biggest project yet.
Directly across the street from the United Nations building.
Russian Linked-Deutsche Bank arranged to lend hundreds of millions of dollars to finance Trump’s construction of a skyscraper next to the United Nations.
Construction got underway in 1999.
Units on the tower’s priciest floors were quickly snatched up by individual buyers from the former Soviet Union, or by limited liability companies connected to Russia. “We had big buyers from Russia and Ukraine and Kazakhstan,” sales agent Debra Stotts told Bloomberg. After Trump World Tower opened, Sotheby’s International Realty teamed up with a Russian real estate company to make a big sales push for the property in Russia. The “tower full of oligarchs,” as Bloomberg called it, became a model for Trump’s projects going forward. All he needed to do, it seemed, was slap the Trump name on a big building, and high-dollar customers from Russia and the former Soviet republics were guaranteed to come rushing in.
New York City real estate broker Dolly Lenz told USA TODAY she sold about 65 condos in Trump World at 845 U.N. Plaza in Manhattan to Russian investors, many of whom sought personal meetings with Trump for his business expertise.
“I had contacts in Moscow looking to invest in the United States,” Lenz said. “They all wanted to meet Donald. They became very friendly.”Lots of Russian and Eastern European Friends. Investing lots of money. And not only in New York.
Miami is known as a hotspot of the ultra-wealthy looking to launder their money from overseas. Thousands of Russians have moved to Sunny Isles. Hundreds of ultra-wealthy former Soviet citizens bought Trump properties in South Florida. People with really disturbing histories investing millions and millions of dollars. Igor Zorin offers a story with all the weirdness modern Miami has to offer: Russian cash, a motorcycle club named after Russia’s powerful special forces and a condo tower branded by Donald Trump.
Thanks to its heavy Russian presence, Sunny Isles has acquired the nickname “Little Moscow.”
From an interview with a Miami based Siberian-born realtor... “Miami is a brand,” she told me as we sat on a sofa in the building’s huge foyer. “People from all over the world want property here.” Developers were only putting up luxury properties because they “know that the crisis has not affected people with money,”
Most of her clients are Russian—there are now three direct flights per week between Moscow and Miami—and increasing numbers are moving to Florida after spending a few years in London first. “It’s a money center, and it’s a lot easier to get your money there than directly to the US, because of laws and tax issues,” she said. “But after your money has been in London for a while, you can move it to other places more easily.”
In the 2000s, Trump turned to licensing deals and trademarks, collecting a fee from other companies using the Trump name. This has allowed Trump to distance himself from properties or projects that have failed or encountered legal trouble and provided a convenient workaround to help launch projects, especially in Russia and former Soviet states, which bear Trump’s name but otherwise little relation to his general business.
Enter Bayrock Group, a development company and key Trump real estate partner during the 2000s. Bayrock partnered with Trump in 2005 and invested an incredible amount of money into the Trump organization under the legal guise of licensing his name and property management. Bayrock was run by two investors:
Felix Sater, a Russian-born mobster who served a year in prison for stabbing a man in the face with a margarita glass during a bar fight, pleaded guilty to racketeering as part of a mafia-driven "pump-and-dump" stock fraud and then escaped jail time by becoming a highly valued government informant. He was an important figure at Bayrock, notably with the Trump SoHo hotel-condominium in New York City, and has said under oath that he represented Trump in Russia and subsequently billed himself as a senior Trump advisor, with an office in Trump Tower. He is a convict who became a govt cooperator for the FBI and other agencies. He grew up with Micahel Cohen --Trump's disbarred former "fixer" attorney. Cohen's family owned El Caribe, which was a mob hangout for the Russian Mafia in Brooklyn. Cohen had ties to Ukrainian oligarchs through his in-laws and his brother's in-laws. Felix Sater's father had ties to the Russian mob.
Tevfik Arif, a Kazakhstan-born former "Soviet official" who drew on bottomless sources of money from the former Soviet republic. Arif graduated from the Moscow Institute of Trade and Economics and worked as a Soviet trade and commerce official for 17 years before moving to New York and founding Bayrock. In 2002, after meeting Trump, he moved Bayrock’s offices to Trump Tower, where he and his staff of Russian émigrés set up shop on the twenty-fourth floor.
Arif was offering him a 20 to 25 percent cut on his overseas projects, he said, not to mention management fees. Trump said in the deposition that Bayrock’s Tevfik Arif “brought the people up from Moscow to meet with me,”and that he was teaming with Bayrock on other planned ventures in Moscow. The only Russians who are likely have the resources and political connections to sponsor such ambitious international deals are the corrupt oligarchs.
In 2005, Trump told The Miami Herald “The name has brought a cachet to certain areas that wouldn’t have had it,” Dezer said Trump’s name put Sunny Isles Beach on the map as a classy destination — and the Trump-branded condo units sold “10 to 20 percent higher than any of our competitors, and at a faster pace.”“We didn’t have any foreclosures or anything, despite the crisis.”
In a 2007 deposition that was part of his unsuccessful defamation lawsuit against reporter Timothy O’Brien Trump testified "that Bayrock was working their international contacts to complete Trump/Bayrock deals in Russia, Ukraine, and Poland. He testified that “Bayrock knew the investors” and that “this was going to be the Trump International Hotel and Tower in Moscow, Kiev, Istanbul, et cetera, and Warsaw, Poland.”
In 2008, Donald Trump Jr. gave the following statement to the “Bridging U.S. and Emerging Markets Real Estate” conference in Manhattan: “[I]n terms of high-end product influx into the United States, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. We see a lot of money pouring in from Russia.”
In July 2008, Trump sold a mansion in Palm Beach for $95 million to Dmitry Rybolovlev, a Russian oligarch. Trump had purchased it four years earlier for $41.35 million. The sale price was nearly $54 million more than Trump had paid for the property. This was the height of the recession when all other property had plummeted in value. Must be nice to have so many Russian oligarchs interested in giving you money.
In 2013, Trump went to Russia for the Miss Universe pageant “financed in part by the development company of a Russian billionaire Aras Agalarov.… a Putin ally who is sometimes called the ‘Trump of Russia’ because of his tendency to put his own name on his buildings.” He met with many oligarchs. Timeline of events. Flight records show how long he was there.
Video interview in Moscow where Trump says "...China wanted it this year. And Russia wanted it very badly." I bet they did.
Also in 2013, Federal agents busted an “ultraexclusive, high-stakes, illegal poker ring” run by Russian gangsters out of Trump Tower. They operated card games, illegal gambling websites, and a global sports book and laundered more than $100 million. A condo directly below one owned by Trump reportedly served as HQ for a “sophisticated money-laundering scheme” connected to Semion Mogilevich.
In 2014, Eric Trump told golf reporter James Dodson that the Trump Organization was able to expand during the financial crisis because “We don’t rely on American banks. We have all the funding we need out of Russia. I said, 'Really?' And he said, 'Oh, yeah. We’ve got some guys that really, really love golf, and they’re really invested in our programmes. We just go there all the time.’”
A 2015 racketeering case against Bayrock, Sater, and Arif, and others, alleged that: “for most of its existence it [Bayrock] was substantially and covertly mob-owned and operated,” engaging “in a pattern of continuous, related crimes, including mail, wire, and bank fraud; tax evasion; money laundering; conspiracy; bribery; extortion; and embezzlement.” Although the lawsuit does not allege complicity by Trump, it claims that Bayrock exploited its joint ventures with Trump as a conduit for laundering money and evading taxes. The lawsuit cites as a “Concrete example of their crime, Trump SoHo, [which] stands 454 feet tall at Spring and Varick, where it also stands monument to spectacularly corrupt money-laundering and tax evasion.”
In 2016, the Trump Presidential Campaign was helped by Russia.
(I don't have the presidential term sourced yet. I'll post an update when I do. I'm sure you probably remember most of them...sigh. TY to the main posters here. Obviously I'm standing on your shoulders having taken a lot of the information or articles from here).

Welcome to Lost in the Sauce, keeping you caught up on political and legal news that often gets buried in distractions and theater… or a global health crisis.
Housekeeping:

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Election shenanigans

I put the latest info on Trump's phone call to Raffensperger in this comment.

According to experts, Trump’s conduct has potential criminal exposure:

A federal statute makes it a crime when one “knowingly and willfully … attempts to deprive or defraud the residents of a State of a fair and impartially conducted election process, by … the procurement, casting, or tabulation of ballots that are known by the person to be materially false, fictitious, or fraudulent under the laws of the State in which the election is held.”
A Georgia statute similarly provides that a “person commits the offense of criminal solicitation to commit election fraud in the first degree when, with intent that another person engage in conduct constituting a felony under this article, he or she solicits, requests, commands, importunes, or otherwise attempts to cause the other person to engage in such conduct.”
…The hard part for prosecutors would be proving Trump’s state of mind, because the statutes require proof of knowledge and intent. Prosecutors would have to show that Trump knew that Biden fairly won the election, and Trump was asking for Georgia officials to commit election fraud. And it’s not clear prosecutors could make that case.

At least 12 Republican senators plan to challenge Biden’s Electoral College win on Jan. 6, when Congress is set to officially count the votes. The effort is being led by Sen. Ted Cruz (R-Tex.) and includes Sens. Ron Johnson (R-Wis.), James Lankford (R-Okla.), Steve Daines (R-Mont.), John Kennedy (R-La.), Marsha Blackburn (R-Tenn.), and Mike Braun (R-Ind.), as well as new Senators Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kan.), Bill Hagerty (R-Tenn.), and Tommy Tuberville (R-Ala.). Separately, Sen. Josh Hawley (R-Missouri) is pursuing a similar plan.

"Congress should immediately appoint an Electoral Commission, with full investigatory and fact-finding authority, to conduct an emergency 10-day audit of the election returns in the disputed states. Once completed, individual states would evaluate the Commission’s findings and could convene a special legislative session to certify a change in their vote, if needed," the senators said in a joint statement. “Accordingly, we intend to vote on Jan. 6 to reject the electors from disputed states as not ‘regularly given’ and ‘lawfully certified’ (the statutory requisite), unless and until that emergency 10-day audit is completed."

Their plan is not going to succeed in preventing Biden from taking office, as majorities in both the House and the Senate would need to support a challenge against a state’s electoral votes. For an objection to be made, at least one member of both the House and Senate would need to submit it in writing. Then, the House and Senate separately convene to consider the issue. Debate is limited to two hours for each objection. After debate concludes, the House and Senate vote to uphold the objection and throw out the state’s votes. If the majority of the House AND the majority of the Senate does not uphold the objection, the state’s electoral votes are counted as cast.

Vice President Mike Pence’s role is simply to preside over the joint session, opening and presenting the certifications from each state. In his absence, the Senate pro-tempore Sen. Chuck Grassley (R-Iowa) will lead the session. At the end of the process, the presiding officer announces who has won the majority of votes for president and vice president.

The most immediate danger from Trump and Cruz’s doomed election gambit is rightwing terrorism and general violence: Trump, in particular, is inciting his supporters to swarm D.C. on Jan. 6. “JANUARY SIXTH, SEE YOU IN DC!” Trump tweeted last week. Four rightwing rallies are scheduled, including one headlined by George Papadopoulos and Roger Stone.
The Proud Boys and other extremists are planning to attend the rallies and may set up an “armed encampment” on the National Mall, according to the Washington Post. On social media platform Parler, the leader of the Proud Boys said that members will be there “incognito” and may “dress in all black” to impersonate leftwing protestors.

Enrique Tarrio: "The ProudBoys will turn out in record numbers on Jan 6th but this time with a twist...We will not be wearing our traditional Black and Yellow. We will be incognito and we will spread across downtown DC in smaller teams."

Rep. Louie Gohmert has more explicitly tried to incite violence, saying the failure of his legal challenge to the election means “you gotta go the streets and be as violent as Antifa and BLM.” (clip)

At the same time, pro-Trump lawyer Lin Wood suggested that Pence could “face execution by firing squad” for “treason” if he doesn’t go along with the attempt to subvert the election.

Obstructing the transition

Biden’s transition director has accused the Office of Management and Budget of stonewalling the incoming administration’s team. OMB Director Russ Vought is not allowing key staff to meet with the transition team to help prepare the president-elect’s first annual spending plan, a move that could delay major proposals. Vought pushed back on the charges, saying that his agency needs to focus on finalizing the Trump administration’s regulations before the president leaves office.

“OMB leadership’s refusal to fully cooperate impairs our ability to identify opportunities to maximize the relief going out to Americans during the pandemic, and it leaves us in the dark as it relates to Covid-related expenditures and critical gaps,” [Biden transition Exec. Dir. Yohannes] Abraham said.

Earlier last week, Biden himself said Trump officials are not cooperating with his team, singling out the Defense Department for obstructing information on crucial national security issues. “Right now, we just aren’t getting all the information that we need from the outgoing administration in key national security areas. It’s nothing short, in my view, of irresponsibility,” Biden said. The Defense Dept. finally scheduled meetings with the incoming team this week, after not briefing the transition for weeks.

The timing of the resumption in meetings is notable because it comes after the one year anniversary of the U.S. assassination of Iranian Maj. Gen. Qassem Soleimani on Jan. 3. NATO officials are reportedly worried about the lack of coordination from the Trump administration: "We need the incoming Biden administration to be fully briefed and ready to deal with these very dangerous issues facing NATO's security."

Sabotaging the Biden Administration

U.S. Agency for Global Media CEO Michael Pack is taking steps to keep control of Radio Free Europe and Radio Free Asia during the Biden administration. As chairman of the boards of Radio Free Europe and Asia, Pack and his fellow members have added binding contractual agreements that will make it impossible to remove him or other pro-Trump allies from the board in the next two years.

In other words, although President-elect Joe Biden has already signaled he intends to replace Pack as CEO of the parent agency soon after taking office in January, Pack would maintain a significant degree of control over the networks.

The State Department is likely to designate Cuba as a state sponsor of terrorism “as an 11th hour effort to create hurdles for the incoming Biden administration.” The label, which requires the approval of Secretary of State Mike Pompeo, would undo a major accomplishment of the Obama administration. To take Cuba back off the list, the Biden team would need to conduct a formal review, a process that might take several months.

Such a designation would impose restrictions on US foreign assistance, a ban on defense exports and sales, certain controls over exports and various financial restrictions. It would also result in penalization against any persons and countries engaging in certain trade activities with Cuba.

The Trump administration has been rushing to finalize a myriad of rules before Biden’s inauguration. Since Election Day, the Trump administration has issued about three to four times as many new regulations as it did during other periods of Trump’s presidency. Rules that haven’t been finalized or taken effect can be suspended by an incoming president, which Biden has said he intends to do. By contrast, rules that are finalized can take months, or even years, to undo.

“As a general rule, it takes at least as much process to undo or modify a rule as it does to put the rule in place,” said Jonathan H. Adler, a professor and an administrative law expert at Case Western Reserve University School of Law. “The Trump administration is magnifying that challenge for the Biden administration.”

Trump loyalists are urging the president to stymie Biden’s efforts to rejoin the Paris climate agreement and the Iran nuclear deal. Sens. Ted Cruz and Lindsey Graham are working to get the agreements submitted to the Senate for ratification, requiring a two-thirds vote, with the goal of failure. While such an outcome wouldn’t prevent Biden from rejoining the accords, Cruz and Graham hope it would make their resurrection more problematic.

A vote against them would signal GOP opposition to the world and, they hope, undermine any unilateral action by Biden to rejoin the agreements. One senior congressional aide told RCP that sending them to die in the Senate “would be the final nail in the coffin.”

Further reading: “Biden To Be Saddled With Trump’s Payroll Tax Deferral Mess,” Forbes.
Further reading: Biden will inherit a backlog of tens of thousands of visa requests from the wars in Iraq and Afghanistan — and a bureaucratic tangle that refugee advocates say President Trump ignored or made worse.

Trump money and properties

Manhattan District Attorney Cyrus Vance is employing forensic accounting specialists to examine Trump’s finances and business operations. Vance is looking “for anomalies among a variety of property deals” and trying to determine “whether the president’s company manipulated the value of certain assets to obtain favorable interest rates and tax breaks”.

The analysts hired by Vance probably have already reviewed various bank and mortgage records obtained from Trump’s company as part of the ongoing grand jury investigation, and they could be called on to testify about their findings should the district attorney eventually bring criminal charges

In yet another shady business deal connected to Trump, the United States sold the ambassador’s residence in Israel for more than $67 million. The person who bought the residence is none other than Trump mega-donor Sheldon Adelson. The property only became available due to Trump's controversial decision to relocate the U.S. Embassy from Tel Aviv to contested Jerusalem. Furthermore, State Dept. representatives reportedly lied to Congress about the sale, perhaps to hide that Adelson purposefully overbid.

For now, there is no alternative residence for the ambassador, David Friedman, Trump’s former lawyer, who currently uses a suite at Jerusalem’s King David Hotel or rooms at the former Jerusalem Consulate General when he spends nights in Jerusalem… As a result, the United States appears likely to end up leasing the residence it has owned since 1964 from the GOP-affiliated casino mogul.
“It is very strange that we are now paying Sheldon Adelson,” a congressional aide told The Daily Beast. “It is not above board. We have a number of questions. Did they get two independent appraisals? Was it a sweetheart deal? Was Adelson the highest donor? Was there a reason to sell it now?”

Trump’s businesses have taken in $10.5 million of donor money over the course of his presidency. $8.5 million came from the Trump campaign and related entities that Trump controls directly; $2 million came from other Republican candidates and committees. The biggest beneficiary was Trump’s NYC hotel, taking in $3,039,979 over the four years of his presidency, with $891,003 of that in just the final four months of the campaign.
Trump’s DC hotel is ramping up room prices and requiring a two-night minimum stay for two key events this month, as the president tries to squeeze more profit out of his office. On Jan. 6, when Congress is set to formally count the votes cast by the Electoral College, room rates are listed at over eight times the price of surrounding dates. Trump is encouraging his supporters to attend a protest of Biden’s win on the 6th. A room during the inauguration costs five times the normal rate, at $2,225 per night.
Trump’s Turnberry Resort in Scotland posted a £2.3 million ($3.1 million) loss in 2019, marking the sixth year in a row it has failed to turn a profit under his ownership. Since Trump took over the historic property in 2014, its losses now total nearly £45 million ($61.5 million).

The fact Turnberry remains in the red comes in spite of significant tranches of payments it has received from the US government during Mr Trump’s single term in office… the US Secret Service spent nearly £25,000 to accommodate its agents at the resort during business trips by Mr Trump’s son, Eric, an executive vice-president of the family firm. Since Mr Trump’s election, the property has received close to £300,000 from the Secret Service, US State Department, and US Defence Department

A Florida state lawmaker is calling for Mar-a-Lago to be penalized - and possibly shut down - for flouting coronavirus restrictions during a New Years Eve party. While Trump and the first lady did not attend, son Don Jr., attorney Rudy Giuliani, Rep. Matt Gaetz, and Fox News personality Jeanine Piro were captured on video among the maskless crowd. Guests paid as much as $1,000 for access to the ballroom to be entertained by Vanilla Ice.

State Rep. Omari Hardy: “My constituents are not snowbirds like @DonaldJTrumpJr & @kimguilfoyle. My constituents live here. This is their home, and they're going to have to deal w/ the consequences of a potential super-spreader party at Mar-a-Lago long after Junior & wife leave here on their private jet.”

Are you ready for a Donald J. Trump Airport? According to the Daily Beast, Trump has been asking aides about the process of naming airports after former U.S. presidents.
Further reading: “Jared Kushner’s family real estate business wants to raise at least $100 million in capital through Israel’s bond market… Kushner has helped spearhead a series of moves that have been applauded by the conservative pro-Israel community, including moving the U.S. Embassy to Jerusalem from Tel Aviv and recognizing Israeli sovereignty in disputed areas such as the Golan Heights. Kushner also has close ties to Israel’s prime minister, Benjamin Netanyahu.”

Miscellaneous

The Census Bureau missed it’s end-of-year deadline to produce numbers that determine representation in Congress and the Electoral College for the next decade. The agency is working toward Jan. 9 as an internal target date for completing the current stage of processing records. "If we miss Jan. 9, it's hard to envision that we would get apportionment done before inauguration," a Census employee told NPR.

The final timing of the 2020 census results' release could undermine President Trump's efforts to make an unprecedented change to who is counted in key census numbers before leaving office… If the first census results are not ready until after Trump's term ends on Jan. 20, it would be President-elect Joe Biden, not Trump, who would get control of the numbers, which are ultimately handed off to Congress for certification.

I posted this yesterday morning (UK time) but after 5 hours or so, pennystocks deleted the original post. A few people messaged me asking for it to be shared in a few High Tide specific pages. So here it is!
--
This is my first time posting a DD post – a friend of mine who moderates on SPACs has shared some analysis I have written previously, but I’m keen to share this here, and see if there is any appetite for sharing my own personal written DD I have on the 30 stocks I have across a number of different portfolios.
I have modified this format, as it was originally a script for a video which I created on the stock. If you prefer to listen – check it out here: https://youtu.be/qsjwU7kkPsw
Some of the market stats (market cap, current multiples, etc.) are correct as of Feb-06, and clearly a little outdated since the price movements.
Not a financial advisor, do your own DD. I am long HITI and have an expectation of a long term hold on this stock.
Overview

High Tide Canada-based cannabis retail company, operating under multiple brands. It operates under 3 core divisions:

Brick and mortar retail – 4 key brands with just under 70 locations in Canada. Brands include: Canna Cabana, New Leaf, Meta Cannabis and Kushbar. Forecast to have around 115 stores by end of 2021
Online retail – has 2 brands, both of which attract millions of viewers per month – Grasscity.com and CBDcity.com
Wholesale – manufacturer of paraphernalia in US and Canada. Number of products are branded with various celebrities, Snoop Dogg, Paramount Pictures, Trailer Park Boys and many more

Has good c-level execs and experienced executive board; hold significant stake in the business. CEO Raj Grover holds just over 21% of the shares
Currently has a market cap of around $280m. Still significant upside to the valuation – see analysis later in post

Investment Merits
Very strong market growth:

Business has demonstrated growth both organically (through new store openings, more online sales and greater wholesale sales), as well as inorganically through M&A
Growth in markets which High Tide has a physical presence in is expected to be very strong. North American cannabis market (Canada and US) is forecast to grow by 30% a year to 2027 (source: research and markets)
Analysts covering High Tide are forecasting growth in excess of this, which is positive to see and implies capturing market share
New markets / geographies ‘opening up’, legalizing and regulating cannabis is also an exciting and realistic prospect for incremental growth:

The US federal legalization debate is on the table
Many other countries are considering this too and High Tide is well positioned for these; this is catalyzed by the fact that government debt has increased significantly as part of the response to the COVID-19 health crisis. This needs to be repaid somehow, and increasing tax rates on existing taxes is an unpopular political move. Finding new tax revenues is a more palatable way of increasing tax revenues for governments. This is especially important in countries where elections are upcoming.

Personally I do expect to see this accelerate the agenda for the regulation and legalization of cannabis in many new countries
Whilst predominantly Canada and US based, High Tide does have presence in some markets where cannabis is not regulated or legalized, the UK for example (~10% of Grasscity sales are made here) and so it is well positioned with a strong and established brand to capitalize on this opportunity, when / if the market ‘opens up’

Regulation

High Tide benefits from the regulatory focus and overhang on the cannabis retail sector as it represents a strong barrier to entry, making it more challenging for new competitors to enter market
Participants in the market need to have licenses and ensure consistent compliance with laws to continue operating – failure to comply can result in significant financial penalties
Personally I normally don’t like investing into retail. There are usually fairly limited barriers to entry, minimal differentiation and negligible customer loyalty, however the cannabis market does have different characteristics in this respect and makes it a more compelling proposition
Regulation also benefits those with scale, something High Tide has as the leading player in the market. It costs money to obtain and retain licences to operate and it costs money to ensure compliance with all the laws and regulations and that all staff are acting in accordance with these
Some parallels in this respect which can be drawn to casino gaming in casinos; you don’t see new casinos popping up at the same rate which you see new restaurants or apparel stores opening

Demand

There’s a lot to like about the demand dynamics for High Tide. It’s vice-nature means that demand is less correlated to disposable incomes. Given where we are in economic cycle, especially important consideration
For those doubting this, check alcohol, tobacco or gambling expenditure across economic cycles historically, for a proxy

Strong performance throughout COVID-19 crisis

Despite heavy weighting towards brick and mortar, (the most hard hit part of retail) it has effectively managed the shift to online, which is a positive
Has relied on government support and financial assistance in the form of job retention schemes (address in more detail later in post)
This demonstrates management are capable and have effectively navigated the challenging situation

Data

Massively summarized from the video, (and my video on KERN) so check that out if interested in this point, however, they have unique access to supply chain data which could be monetized effectively and generate strong levels of recurring revenues
Other established sectors have a trusted party with such unique access to data (e.g. alcohol, lithium, different foods, etc.) and the opportunity here is enormous
I would like to see High Tide capitalize on this

Forecasts financials & analysts

Currently 2 analysts covering High Tide, both have a buy rating on the business
Their coverage is slightly outdated (expect this being updated soon and a further catalyst for positive price action) and their price targets are 60c; at the time their reports were published, they were forecasting a 4x upside (HITI was trading at ~15c)
Same analysts also forecasting strong growth - 77% CAGR to 2022. They are forecasting revenues of around $250m and EBITDA of $46m. A reminder here, these are professional analysts, not YouTube students – these come from their financial models, the assumptions of which are discussed with management

https://preview.redd.it/nfq8h5fpvmg61.png?width=602&format=png&auto=webp&s=f48977ca9c0072003ac71206cef28b0a493dd583
Valuation

Going to go quick here, its explained more slowly in the video but High Tide is currently valued at a significant discount to the other listed peers
Looking at EV / FY+1 Sales multiples – EBITDA not meaningful as some of the peer group are EBITDA negative and High Tide itself has only recently become EBITDA positive

https://preview.redd.it/4t4n303rvmg61.png?width=342&format=png&auto=webp&s=636bca248743272bed283af97780d3e1e121312f

Personally, I think Planet13 is the most comparable given its business model
Taking both Planet13 multiple and peer group average multiple, this is then applied to High Tide’s forecast FY+1 sales to calculate an enterprise value – this is adjusted for net debt to get to a market capitalization and then divided by the share count to get an implied share price
The table below shows the implied stock price valuations from this analysis

https://preview.redd.it/1mks0oxrvmg61.png?width=406&format=png&auto=webp&s=587ca8e2468b825103905931ebe7ab5b42314c6f
NB – assumed the following:

Net debt will change in coming year given the capital structure and a large number of convertible notes – this has been ignored given it will have small impact on the price
The share count will change as a result of dilution from various instruments – if this bothers you massively then look at the valuation discount on the basis of the enterprise value as it does not impact this (and only slightly on the market cap given minimal impacts to cash from instrument execution, etc.)
Not accounting for any stock split, consolidation or any other M&A deals
The FY21 financials are on the basis of the mean broker estimates from Thomson Reuters – Seeking Alpha has different and slightly outdated ones

Investment Risks & Mitigants / Outstanding DD points
Exposure to changing regulation

US is only a small part of the market which High Tide addresses, while a change in regulation would have a big impact on the company, currently it is unlikely this would happen, given the discussions about potential federal legalization
Canada regulation is established and not going anywhere
Other countries likely to legalize and regulate cannabis, as outlined earlier

Dilution

No escaping that there will be some significant dilution for shareholders, as pointed out in the table below, but this should be already priced into the stock
Potential that new equity issuances could occur to help finance growth, but provided this growth is delivered, it should be accretive for the stock price

https://preview.redd.it/vkrb2ousvmg61.png?width=602&format=png&auto=webp&s=40f8f4c65b92efc15af0eba42bb873c774700eff
Potentially misleading cost basis information

A risk that investors need to be aware with for all companies which have relied on government financial support during COVID-19 measures. Such support has resulted in the number of businesses going bankrupt decreasing massively – this is at a lower level than it ever normally is and is masking some real underlying issues within companies. As investors we need to be open eyed about this
As High Tide has benefited from support in the form of the Canada’s Emergency Wage Support scheme, there is the risk that once this is lifted it may become apparent that the cost base has not been effectively managed
Personally, I think this is mitigated by the synergy analysis conducted as part of the M&A. A full cost base analysis would have been conducted to calculate the potential $8.4m synergies so strong likelihood that this is under control, but should keep on our radar and reassess

Marketing expenses and celebrity licenses

Need more information to ascertain whether these are underpinned by a compelling ROI. Seen a lot of people suggest this is a great positive, but the impact on sales volumes from these is unknown, as is the terms of these license agreements (e.g. split between upfront fee vs. volume-based fee)
No escaping the fact that it is an increased cost and so need to understand the ROI this generates to determine whether it really is compelling
Is there really more demand to pay a premium for Snoop Dogg bongs, Guns n Roses papers, Cheech & Chong grinders, or whatever they may be?
So far management have suggested this has been helpful in driving new sales, but this is something to dig into more

If you want to check out the video, it would be appreciated: https://youtu.be/qsjwU7kkPsw

1What retiring early is like

It's fucking great.
I wake up happy, I do pretty much whatever I want during the day, I go to sleep happy.
I indulge my limited passions and hobbies, I plunge down fascinating rabbit holes of knowledge, I bugger off to places for months at a time (harder with Brexit, you xenophobic malcontents), I spend time with people I want to. I feel smug.
I don't have an alarm waking me up, I don't need to take any shit off anyone, I don't burn 90 mins a day on a loud bus screeching stop announcements at 90db in my ear.
In the summer I sometimes pop over to the local greenery, have a pint and meal, read a book, soak up the sun. Great stuff.
My phone is always on silent. It can wait.
People occasionally ask me “what I do all day”. If your imagination is so limited, living in such an incredible time, with so much at your fingertips, that the question even crosses your mind, then carry on working and bitching about it, you don't know how to be happy.
“Scipio used to say that he was never less idle than when he had nothing to do “ - Cicero, On Duties.

2How to get there

2.1Difficulty modes

2.1.1Easy mode: Get free university education, get a good job, buy a cheap house

Not too difficult if you were born in 1972. Easy mode is now disabled in the UK. Maybe available in foreign versions of the game, such as in Greece or Denmark.

2.1.2Medium mode: Don't have kids

I swear to god, I have been pretty lucky not to accidentally father a crotch goblin, and believe me, little Goocho often vetoed my brain. Use contraceptives. Notice how all the shit hole countries don't give women control over their reproduction.
If I had foolishly crapped out a kid, I would have had to work another 10 years at least I reckon. Ugh.
Borrow kids to play with them, and return when they start crying.

2.1.3Hard mode: Have kids

Look, if you are spending 100k or whatever to raise a kid I don't know what to tell you, at least you got laid eh?
I hope you enjoy working like I didn't. Seriously, if you have a job you like, great stuff, things will be much easier for you. The impetus to leave it won't be so great. The point of all this is to be happy after all!

2.2Control your costs

Filling your house full of nonsense is consumerism at it's worst.
I practice a kind of minimalism. So I don't own a freezer, a cooker or a dish washing machine. Guess what? They will never need repairing or replacing! But I do own an amazing OLED tv, a solid speaker system, loads of films and books. Minimalism is a whole other subject, and attracts the mentally ill who take it to extremes. Spend money on a decent mattress you fools.
Subscriptions are death by a thousand cuts, and will weigh you down. However Netflix and Amazon Prime are great. Shades of grey.
Screw charities, charity workers get paid salaries and you are supposed to give for free? Nope. Begging scum. “it is only the price of a coffee”, bitch please, I pay 10p a cup for my lovely coffee.
Pay your taxes. Don't be a leech on society.
Live in a small house.
Aldi is great.
If you don't get married, you can't get ruinously divorced, .
Insurance is generally a scam, if you are drunkenly fucking up so regularly than you need your phone insured, sort your life out.
You really need that car? Hmmm. If you are driving to the supermarket and paying for the gym, you are an idiot. Those two cancel each other out.
Only unhappy people play the lottery.
Buy a decent phone for £200, pay £5 a month for service. You think iFruit users will look down upon you? Comparison is the thief of joy.
DIY accomplishments are mentally rewarding, great exercise and cheap – or you can throw money at a problem to make it go away, this is the point of money after all, we sell and buy time with it. Before I buy anything big, I ask myself, is this worth x days sitting in an office for?
Spend your money how you like, I am not your mum.
Enjoy what you have.

2.3Plan a little

Write down (don't guess) how much you spend a month over a couple of years.
For investments, assume inflation cancels out general increase in non distributing equity value. This is all a rough guessing game anyway, don't pretend it isn't.
I think there are two ways to look at when you can stop working:

2.3.1Cash drawdown per month until death

If you assume you are going to die around 85 (actuarial tables available online), divide your cash + private pension wealth + state pension amount will pay you until age 85 by the number of months left to live, this tells you how much you can spend a month before you die. Sounds like enough? Investment appreciation means you might have more than that.

2.3.2Cash dividends per month

You have a lumpsum of wealth. Flexible uk pension rules means you no longer need to take the annuity gamble. 4% returns a year seems conservatively doable. Can you live on that? Means you die with a load of cash. Stash it in your silk lined coffin.

2.4Play it safe, but not too safe

Assume laws and taxes will change. Don't count too much on that state pension.
If the NHS falls ill itself, you might need some cash to go private. Good luck getting that hip surgery in the next 12 months post covid!
If the stock market takes a 10% dump, you must still sleep soundly. Don't live too close to the edge.
Assume and hope your parents will spend all their wealth on themselves, having a happy end of life in an old folks home. Points off as a human being for relying on your parent snuffing it for free money.
What if your body conks out and you start shitting yourself and have to pay 4k a month to be served Dickensian gruel in a nursing home? Trust in the societal safety net? Work another 5 years just in case? Keep a cyanide pill by the bed? Sell your house I guess? I'm rolling the dice on this one. Maybe dancing in VR and these 50 degree Victorian terrace stairs will keep me fit (or kill me).

2.5Personal Story

Went to Uni, got a Computering degree, got a job I liked, autistic-ally worked at it, got paid lots of money, bought a house at 26 for 48k, parents threw in 10k to get rid of me, paid off the mortgage in 30 months.
After 8 years in said job, started to dislike it, took 6 months off work. Worked another 2 years before I got made redundant, 15k for doing nothing? Yes please!
Worked about half the time from age 32 to 46 as Contractor scum, in jobs I generally disliked or eventually hated. Had 2-3 years between jobs. Snatching retirement chunks from the future. I figured, why leave retirement until I am too old to enjoy it? Took around 3 months to get a new job each time, I didn't care, I loved not working!
Played casino blackjack for a couple of years for ~8 hours a week, made £12k. Shuffling machines have stopped all that now, was bored of it anyway.
Decided at 40 I had better get a pension, threw money at it when working.
So at 46, when I walked out on the pathetic management at my last gig (FIS Birmingham, you see when you are retired, you really don't have to give a shit!), I had worked for a total of ~15 years, thoroughly enjoyed not working and was sick of working.
At 47 I realised maybe I don't actually need another job? Started paying real attention to my finances.
At 48, I have 110k cash & 140k pension = 250k. 4% a year dividends = 10k a year. I can live happily on that.
£800 a month is enough. I spent £350 a month in December and January, had a great time. Will get a PS5 when available, boiler is bound to break eventually. It all evens out.
My state pension fortells a sickly £117 per week. Meh. Forgive me for not factoring that in too much. Who knows where I will be in 20 years? Hopefully sleeping in late without an alarm clock.

NEW INFO 5 Results from share redemption are posted. Less than .2% redeemed. Very bullish as investors are showing extreme confidence in the future of PLBY.
https://finance.yahoo.com/news/playboy-mountain-crest-acquisition-corp-120000721.html
NEW INFO 4 Definitive Agreement to purchase 100% of Lovers brand stores announced 2/1.
https://www.streetinsider.com/Corporate+News/Playboy+%28MCAC%29+Confirms+Deal+to+Acquire+Lovers/17892359.html
NEW INFO 3 I bought more on the dip today. 5081 total. Price rose AH to $12.38 (2.15%)
NEW INFO 2 Here is the full webinar.
https://icrinc.zoom.us/rec/play/9GWKdmOYumjWfZuufW3QXpe_FW_g--qeNbg6PnTjTMbnNTgLmCbWjeRFpQga1iPc-elpGap8dnDv8Zww.yD7DjUwuPmapeEdP?continueMode=true&tk=lEYc4F_FkKlgsmCIs6w0gtGHT2kbgVGbUju3cIRBSjk.DQIAAAAV8NK49xZWdldRM2xNSFNQcTBmcE00UzM3bXh3AAAAAAAAAAAAAAAAAAAAAAAAAAAA&uuid=WN_GKWqbHkeSyuWetJmLFkj4g&_x_zm_rtaid=kR45-uuqRE-L65AxLjpbQw.1611967079119.2c054e3d3f8d8e63339273d9175939ed&_x_zm_rhtaid=866
NEW INFO 1 Live merger webinar with PLBY and MCAC on Friday January 29, 2021 at 12:00 NOON EST link below
https://mcacquisition.com/investor-relations/press-release-details/2021/Playboy-Enterprises-Inc.-and-Mountain-Crest-Acquisition-Corp-Participate-in-SPACInsider-ICR-Webinar-on-January-29th-at-12pm-ET/default.aspx
Playboy going public: Porn, Gambling, and Cannabis
!!!WARNING READING AHEAD!!! TL;DR at the end. It will take some time to sort through all the links and read/watch everything, but you should.
In the next couple weeks, Mountain Crest Acquisition Corp is taking Playboy public. The existing ticker MCAC will become PLBY. Special purpose acquisition companies have taken private companies public in recent months with great success. I believe this will be no exception. Notably, Playboy is profitable and has skyrocketing revenue going into a transformational growth phase.
Porn - First and foremost, let's talk about porn. I know what you guys are thinking. “Porno mags are dead. Why would I want to invest in something like that? I can get porn for free online.” Guess what? You are absolutely right. And that’s exactly why Playboy doesn’t do that anymore. That’s right, they eliminated their print division. And yet they somehow STILL make money from porn that people (see: boomers) pay for on their website through PlayboyTV, Playboy Plus, and iPlayboy. Here’s the thing: Playboy has international, multi-generational name recognition from porn. They have content available in 180 countries. It will be the only publicly traded adult entertainment (porn) company. But that is not where this company is going. It will help support them along the way. You can see every Playboy magazine through iPlayboy if you’re interested. NSFW links below:
https://www.playboy.com/
https://www.playboytv.com/
https://www.playboyplus.com/
https://www.iplayboy.com/
Gambling - Some of you might recognize the Playboy brand from gambling trips to places like Las Vegas, Atlantic City, Cancun, London or Macau. They’ve been in the gambling biz for decades through their casinos, clubs, and licensed gaming products. They see the writing on the wall. COVID is accelerating the transition to digital, application based GAMBLING. That’s right. What we are doing on Robinhood with risky options is gambling, and the only reason regulators might give a shit anymore is because we are making too much money. There may be some restrictions put in place, but gambling from your phone on your couch is not going anywhere. More and more states are allowing things like Draftkings, poker, state ‘lottery” apps, hell - even political betting. Michigan and Virginia just ok’d gambling apps. They won’t be the last. This is all from your couch and any 18 year old with a cracked iphone can access it. Wouldn’t it be cool if Playboy was going to do something like that? They’re already working on it. As per CEO Ben Kohn who we will get to later, “...the company’s casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth.” Honestly, I stopped researching Scientific Games' sports betting segment when I saw the word ‘omni-channel’. That told me all I needed to know about it’s success.
“Our SG Sports™ platform is an enhanced, omni-channel solution for online, self-service and retail fixed odds sports betting – from soccer to tennis, basketball, football, baseball, hockey, motor sports, racing and more.”
https://www.scientificgames.com/
https://www.microgaming.co.uk/
“This latter segment has become increasingly enticing for Playboy, and it said last week that it is considering new tie-ups that could include gaming operators like PointsBet and 888Holdings.”
https://calvinayre.com/2020/10/05/business/playboys-gaming-ops-could-get-a-boost-from-spac-purchase/
As per their SEC filing:
“Significant consumer engagement and spend with Playboy-branded gaming properties around the world, including with leading partners such as Microgaming, Scientific Games, and Caesar’s Entertainment, steers our investment in digital gaming, sports betting and other digital offerings to further support our commercial strategy to expand consumer spend with minimal marginal cost, and gain consumer data to inform go-to-market plans across categories.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tMDAA1
They are expanding into more areas of gaming/gambling, working with international players in the digital gaming/gambling arena, and a Playboy sportsbook is on the horizon.
https://www.playboy.com/read/the-pleasure-of-playing-with-yourself-mobile-gaming-in-the-covid-era
Cannabis - If you’ve ever read through a Playboy magazine, you know they’ve had a positive relationship with cannabis for many years. As of September 2020, Playboy has made a major shift into the cannabis space. Too good to be true you say? Check their website. Playboy currently sells a range of CBD products. This is a good sign. Federal hemp products, which these most likely are, can be mailed across state lines and most importantly for a company like Playboy, can operate through a traditional banking institution. CBD products are usually the first step towards the cannabis space for large companies. Playboy didn’t make these products themselves meaning they are working with a processor in the cannabis industry. Another good sign for future expansion. What else do they have for sale? Pipes, grinders, ashtrays, rolling trays, joint holders. Hmm. Ok. So it looks like they want to sell some shit. They probably don’t have an active interest in cannabis right? Think again:
https://www.forbes.com/sites/javierhasse/2020/09/24/playboy-gets-serious-about-cannabis-law-reform-advocacy-with-new-partnership-grants/?sh=62f044a65cea
“Taking yet another step into the cannabis space, Playboy will be announcing later on Thursday (September, 2020) that it is launching a cannabis law reform and advocacy campaign in partnership with National Organization for the Reform of Marijuana Laws (NORML), Last Prisoner Project, Marijuana Policy Project, the Veterans Cannabis Project, and the Eaze Momentum Program.”
“According to information procured exclusively, the three-pronged campaign will focus on calling for federal legalization. The program also includes the creation of a mentorship plan, through which the Playboy Foundation will support entrepreneurs from groups that are underrepresented in the industry.” Remember that CEO Kohn from earlier? He wrote this recently:
https://medium.com/naked-open-letters-from-playboy/congress-must-pass-the-more-act-c867c35239ae
Seems like he really wants weed to be legal? Hmm wonder why? The writing's on the wall my friends. Playboy wants into the cannabis industry, they are making steps towards this end, and we have favorable conditions for legislative progress.
Don’t think branding your own cannabis line is profitable or worthwhile? Tell me why these 41 celebrity millionaires and billionaires are dummies. I’ll wait.
https://www.celebstoner.com/news/celebstoner-news/2019/07/12/top-celebrity-cannabis-brands/
Confirmation: I hear you. “This all seems pretty speculative. It would be wildly profitable if they pull this shift off. But how do we really know?” Watch this whole video:
https://finance.yahoo.com/video/playboy-ceo-telling-story-female-154907068.html
Man - this interview just gets my juices flowing. And highlights one of my favorite reasons for this play. They have so many different business avenues from which a catalyst could appear. I think paying attention, holding shares, and options on these staggered announcements over the next year is the way I am going to go about it. "There's definitely been a shift to direct-to-consumer," he (Kohn) said. "About 50 percent of our revenue today is direct-to-consumer, and that will continue to grow going forward.” “Kohn touted Playboy's portfolio of both digital and consumer products, with casino-style gaming, in particular, serving a crucial role under the company's new business model. Playboy also has its sights on the emerging cannabis market, from CBD products to marijuana products geared toward sexual health and pleasure.” "If THC does become legal in the United States, we have developed certain strains to enhance your sex life that we will launch," Kohn said. https://cheddar.com/media/playboy-goes-public-health-gaming-lifestyle-focus Oh? The CEO actually said it? Ok then. “We have developed certain strains…” They’re already working with growers on strains and genetics? Ok. There are several legal cannabis markets for those products right now, international and stateside. I expect Playboy licensed hemp and THC pre-rolls by EOY. Something like this: https://www.etsy.com/listing/842996758/10-playboy-pre-roll-tubes-limited?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=pre+roll+playboy&ref=sr_gallery-1-2&organic_search_click=1 Maintaining cannabis operations can be costly and a regulatory headache. Playboy’s licensing strategy allows them to pick successful, established partners and sidestep traditional barriers to entry. You know what I like about these new markets? They’re expanding. Worldwide. And they are going to be a bigger deal than they already are with or without Playboy. Who thinks weed and gambling are going away? Too many people like that stuff. These are easy markets. And Playboy is early enough to carve out their spot in each. Fuck it, read this too: https://www.forbes.com/sites/jimosman/2020/10/20/playboy-could-be-the-king-of-spacs-here-are-three-picks/?sh=2e13dcaa3e05
Numbers: You want numbers? I got numbers. As per the company’s most recent SEC filing:
“For the year ended December 31, 2019, and the nine months ended September 30, 2020, Playboy’s historical consolidated revenue was $78.1 million and $101.3 million, respectively, historical consolidated net income (loss) was $(23.6) million and $(4.8) million, respectively, and Adjusted EBITDA was $13.1 million and $21.8 million, respectively.”
“In the nine months ended September 30, 2020, Playboy’s Licensing segment contributed $44.2 million in revenue and $31.1 million in net income.”
“In the ninth months ended September 30, 2020, Playboy’s Direct-to-Consumer segment contributed $40.2 million in revenue and net income of $0.1 million.”
“In the nine months ended September 30, 2020, Playboy’s Digital Subscriptions and Content segment contributed $15.4 million in revenue and net income of $7.4 million.”
They are profitable across all three of their current business segments.
“Playboy’s return to the public markets presents a transformed, streamlined and high-growth business. The Company has over $400 million in cash flows contracted through 2029, sexual wellness products available for sale online and in over 10,000 major retail stores in the US, and a growing variety of clothing and branded lifestyle and digital gaming products.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
Growth: Playboy has massive growth in China and massive growth potential in India. “In China, where Playboy has spent more than 25 years building its business, our licensees have an enormous footprint of nearly 2,500 brick and mortar stores and 1,000 ecommerce stores selling high quality, Playboy-branded men’s casual wear, shoes/footwear, sleepwear, swimwear, formal suits, leather & non-leather goods, sweaters, active wear, and accessories. We have achieved significant growth in China licensing revenues over the past several years in partnership with strong licensees and high-quality manufacturers, and we are planning for increased growth through updates to our men’s fashion lines and expansion into adjacent categories in men’s skincare and grooming, sexual wellness, and women’s fashion, a category where recent launches have been well received.” The men’s market in China is about the same size as the entire population of the United States and European Union combined. Playboy is a leading brand in this market. They are expanding into the women’s market too. Did you know CBD toothpaste is huge in China? China loves CBD products and has hemp fields that dwarf those in the US. If Playboy expands their CBD line China it will be huge. Did you know the gambling money in Macau absolutely puts Las Vegas to shame? Technically, it's illegal on the mainland, but in reality, there is a lot of gambling going on in China. https://www.forbes.com/sites/javierhasse/2020/10/19/magic-johnson-and-uncle-buds-cbd-brand-enter-china-via-tmall-partnership/?sh=271776ca411e “In India, Playboy today has a presence through select apparel licensees and hospitality establishments. Consumer research suggests significant growth opportunities in the territory with Playboy’s brand and categories of focus.” “Playboy Enterprises has announced the expansion of its global consumer products business into India as part of a partnership with Jay Jay Iconic Brands, a leading fashion and lifestyle Company in India.” “The Indian market today is dominated by consumers under the age of 35, who represent more than 65 percent of the country’s total population and are driving India’s significant online shopping growth. The Playboy brand’s core values of playfulness and exploration resonate strongly with the expressed desires of today’s younger millennial consumers. For us, Playboy was the perfect fit.” “The Playboy international portfolio has been flourishing for more than 25 years in several South Asian markets such as China and Japan. In particular, it has strategically targeted the millennial and gen-Z audiences across categories such as apparel, footwear, home textiles, eyewear and watches.” https://www.licenseglobal.com/industry-news/playboy-expands-global-footprint-india It looks like they gave COVID the heisman in terms of net damage sustained: “Although Playboy has not suffered any material adverse consequences to date from the COVID-19 pandemic, the business has been impacted both negatively and positively. The remote working and stay-at-home orders resulted in the closure of the London Playboy Club and retail stores of Playboy’s licensees, decreasing licensing revenues in the second quarter, as well as causing supply chain disruption and less efficient product development thereby slowing the launch of new products. However, these negative impacts were offset by an increase in Yandy’s direct-to-consumer sales, which have benefited in part from overall increases in online retail sales so far during the pandemic.” Looks like the positives are long term (Yandy acquisition) and the negatives are temporary (stay-at-home orders).
https://www.sec.gov/Archives/edgadata/1803914/000110465921006093/tm213766-1_defa14a.htm
This speaks to their ability to maintain a financially solvent company throughout the transition phase to the aforementioned areas. They’d say some fancy shit like “expanded business model to encompass four key revenue streams: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.” I hear “we’re just biding our time with these trinkets until those dollar dollar bill y’all markets are fully up and running.” But the truth is these existing revenue streams are profitable, scalable, and rapidly expanding Playboy’s e-commerce segment around the world.
"Even in the face of COVID this year, we've been able to grow EBITDA over 100 percent and revenue over 68 percent, and I expect that to accelerate going into 2021," he said. “Playboy is accelerating its growth in company-owned and branded consumer products in attractive and expanding markets in which it has a proven history of brand affinity and consumer spend.”
Also in the SEC filing, the Time Frame:
“As we detailed in the definitive proxy statement, the SPAC stockholder meeting to vote on the transaction has been set for February 9th, and, subject to stockholder approval and satisfaction of the other closing conditions, we expect to complete the merger and begin trading on NASDAQ under ticker PLBY shortly thereafter,” concluded Kohn.
The Players: Suhail “The Whale” Rizvi (HMFIC), Ben “The Bridge” Kohn (CEO), “lil” Suying Liu & “Big” Dong Liu (Young-gun China gang). I encourage you to look these folks up. The real OG here is Suhail Rizvi. He’s from India originally and Chairman of the Board for the new PLBY company. He was an early investor in Twitter, Square, Facebook and others. His firm, Rizvi Traverse, currently invests in Instacart, Pinterest, Snapchat, Playboy, and SpaceX. Maybe you’ve heard of them. “Rizvi, who owns a sprawling three-home compound in Greenwich, Connecticut, and a 1.65-acre estate in Palm Beach, Florida, near Bill Gates and Michael Bloomberg, moved to Iowa Falls when he was five. His father was a professor of psychology at Iowa. Along with his older brother Ashraf, a hedge fund manager, Rizvi graduated from Wharton business school.” “Suhail Rizvi: the 47-year-old 'unsocial' social media baron: When Twitter goes public in the coming weeks (2013), one of the biggest winners will be a 47-year-old financier who guards his secrecy so zealously that he employs a person to take down his Wikipedia entry and scrub his photos from the internet. In IPO, Twitter seeks to be 'anti-FB'” “Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon. But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi. Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday (November, 2013). Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.” https://www.nytimes.com/2013/11/08/technology/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday.html Y’all like that Arab money? How about a dude that can call up Saudi Princes and convince them to spend? Funniest shit about I read about him: “Rizvi was able to buy only $100 million in Facebook shortly before its IPO, thus limiting his returns, according to people with knowledge of the matter.” Poor guy :(
He should be fine with the 16 million PLBY shares he's going to have though :)
Shuhail also has experience in the entertainment industry. He’s invested in companies like SESAC, ICM, and Summit Entertainment. He’s got Hollywood connections to blast this stuff post-merger. And he’s at least partially responsible for that whole Twilight thing. I’m team Edward btw.
I really like what Suhail has done so far. He’s lurked in the shadows while Kohn is consolidating the company, trimming the fat, making Playboy profitable, and aiming the ship at modern growing markets.
https://www.reuters.com/article/us-twitter-ipo-rizvi-insight/insight-little-known-hollywood-investor-poised-to-score-with-twitter-ipo-idUSBRE9920VW20131003
Ben “The Bridge” Kohn is an interesting guy. He’s the connection between Rizvi Traverse and Playboy. He’s both CEO of Playboy and was previously Managing Partner at Rizvi Traverse. Ben seems to be the voice of the Playboy-Rizvi partnership, which makes sense with Suhail’s privacy concerns. Kohn said this:
“Today is a very big day for all of us at Playboy and for all our partners globally. I stepped into the CEO role at Playboy in 2017 because I saw the biggest opportunity of my career. Playboy is a brand and platform that could not be replicated today. It has massive global reach, with more than $3B of global consumer spend and products sold in over 180 countries. Our mission – to create a culture where all people can pursue pleasure – is rooted in our 67-year history and creates a clear focus for our business and role we play in people’s lives, providing them with the products, services and experiences that create a lifestyle of pleasure. We are taking this step into the public markets because the committed capital will enable us to accelerate our product development and go-to-market strategies and to more rapidly build our direct to consumer capabilities,” said Ben Kohn, CEO of Playboy.
“Playboy today is a highly profitable commerce business with a total addressable market projected in the trillions of dollars,” Mr. Kohn continued, “We are actively selling into the Sexual Wellness consumer category, projected to be approximately $400 billion in size by 2024, where our recently launched intimacy products have rolled out to more than 10,000 stores at major US retailers in the United States. Combined with our owned & operated ecommerce Sexual Wellness initiatives, the category will contribute more than 40% of our revenue this year. In our Apparel and Beauty categories, our collaborations with high-end fashion brands including Missguided and PacSun are projected to achieve over $50M in retail sales across the US and UK this year, our leading men’s apparel lines in China expanded to nearly 2500 brick and mortar stores and almost 1000 digital stores, and our new men’s and women’s fragrance line recently launched in Europe. In Gaming, our casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth. Our product strategy is informed by years of consumer data as we actively expand from a purely licensing model into owning and operating key high-growth product lines focused on driving profitability and consumer lifetime value. We are thrilled about the future of Playboy. Our foundation has been set to drive further growth and margin, and with the committed capital from this transaction and our more than $180M in NOLs, we will take advantage of the opportunity in front of us, building to our goal of $100M of adjusted EBITDA in 2025.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
Also, according to their Form 4s, “Big” Dong Liu and “lil” Suying Liu just loaded up with shares last week. These guys are brothers and seem like the Chinese market connection. They are only 32 & 35 years old. I don’t even know what that means, but it's provocative.
https://www.secform4.com/insider-trading/1832415.htm
https://finance.yahoo.com/news/mountain-crest-acquisition-corp-ii-002600994.html
Y’all like that China money?
“Mr. Liu has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.”
Dr. Suying Liu, Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp., commented, “Playboy is a unique and compelling investment opportunity, with one of the world’s largest and most recognized brands, its proven consumer affinity and spend, and its enormous future growth potential in its four product segments and new and existing geographic regions. I am thrilled to be partnering with Ben and his exceptional team to bring his vision to fruition.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
These guys are good. They have a proven track record of success across multiple industries. Connections and money run deep with all of these guys. I don’t think they’re in the game to lose.
I was going to write a couple more paragraphs about why you should have a look at this but really the best thing you can do is read this SEC filing from a couple days ago. It explains the situation in far better detail. Specifically, look to page 137 and read through their strategy. Also, look at their ownership percentages and compensation plans including the stock options and their prices. The financials look great, revenue is up 90% Q3, and it looks like a bright future.
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
I’m hesitant to attach this because his position seems short term, but I’m going to with a warning because he does hit on some good points (two are below his link) and he’s got a sizable position in this thing (500k+ on margin, I think). I don’t know this guy but he did look at the same publicly available info and make roughly the same prediction, albeit without the in depth gambling or cannabis mention. You can also search reddit for ‘MCAC’ and very few relevant results come up and none of them even come close to really looking at this thing.
https://docs.google.com/document/d/1gOvAd6lebs452hFlWWbxVjQ3VMsjGBkbJeXRwDwIJfM/edit?usp=sharing
“Also, before you people start making claims that Playboy is a “boomer” company, STOP RIGHT THERE. This is not a good argument. Simply put. The only thing that matters is Playboy’s name recognition, not their archaic business model which doesn’t even exist anymore as they have completely repurposed their business.”
“Imagine not buying $MCAC at a 400M valuation lol. Streetwear department is worth 1B alone imo.”
Considering the ridiculous Chinese growth as a lifestyle brand, he’s not wrong.
Current Cultural Significance and Meme Value: A year ago I wouldn’t have included this section but the events from the last several weeks (even going back to tsla) have proven that a company’s ability to meme and/or gain social network popularity can have an effect. Tik-tok, Snapchat, Twitch, Reddit, Youtube, Facebook, Twitter. They all have Playboy stuff on them. Kids in middle and highschool know what Playboy is but will likely never see or touch one of the magazines in person. They’ll have a Playboy hoodie though. Crazy huh? A lot like GME, PLBY would hugely benefit from meme-value stock interest to drive engagement towards their new business model while also building strategic coffers. This interest may not directly and/or significantly move the stock price but can generate significant interest from larger players who will.
Bull Case: The year is 2025. Playboy is now the world leader pleasure brand. They began by offering Playboy licensed gaming products, including gambling products, direct to consumers through existing names. By 2022, demand has skyrocketed and Playboy has designed and released their own gambling platforms. In 2025, they are also a leading cannabis brand in the United States and Canada with proprietary strains and products geared towards sexual wellness. Cannabis was legalized in the US in 2023 when President Biden got glaucoma but had success with cannabis treatment. He personally pushes for cannabis legalization as he steps out of office after his first term. Playboy has also grown their brand in China and India to multi-billion per year markets. The stock goes up from 11ish to 100ish and everyone makes big gains buying somewhere along the way.
Bear Case: The United States does a complete 180 on marijuana and gambling. President Biden overdoses on marijuana in the Lincoln bedroom when his FDs go tits up and he loses a ton of money in his sports book app after the Fighting Blue Hens narrowly lose the National Championship to Bama. Playboy is unable to expand their cannabis and gambling brands but still does well with their worldwide lifestyle brand. They gain and lose some interest in China and India but the markets are too large to ignore them completely. The stock goes up from 11ish to 13ish and everyone makes 15-20% gains.
TL;DR: Successful technology/e-commerce investment firm took over Playboy to turn it into a porn, online gambling/gaming, sports book, cannabis company, worldwide lifestyle brand that promotes sexual wellness, vetern access, women-ownership, minority-ownership, and “pleasure for all”. Does a successful online team reinventing an antiquated physical copy giant sound familiar? No options yet, shares only for now. $11.38 per share at time of writing. My guess? $20 by the end of February. $50 by EOY. This is not financial advice. I am not qualified to give financial advice. I’m just sayin’ I would personally use a Playboy sports book app while smoking a Playboy strain specific joint and it would be cool if they did that. Do your own research. You’d probably want to start here:
WARNING - POTENTIALLY NSFW - SEXY MODELS AHEAD - no actual nudity though
https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Craig-Hallum-Conference-Investor-Presentation-11_17_20-compressed.pdf
Or here:
https://www.mcacquisition.com/investor-relations/default.aspx
Jimmy Chill: “Get into any SPAC at $10 or $11 and you are going to make money.”
STL;DR: Buy MCAC. MCAC > PLBY couple weeks. Rocketship. Moon.
Position: 5000 shares. I will buy short, medium, and long-dated calls once available.

Hawaii casino could increase sex trafficking, report warns. Excerpt:

A state agency that works toward equality for women and girls issued a blistering report Monday outlining the ills associated with casinos, particularly as they relate to the sex trade...“Casinos bring more than just revenue. They bring a bachelor party culture,” said Khara Jabola-Carolus, executive director of the Hawaii State Commission on the Status of Women...

= = =
Some of the social science assertions coming from Khara Jabola-Carolus’s report: Gambling With Women’s Safety: – A Feminist Assessment of Proposed Resort-Casino:

Nationally, a person being sex trafficked in a hotel/resort setting is forced, coerced, or intimidated to perform sex acts on an average of 5 to 10 customers per day. (p. 2)
Sex trafficking is distinct from prostitution: sex trafficking is the means, prostitution, pornography and stripping are the ends. Both are relatively new problems in Hawaiʻi that became systematic after Western contact. (p. 2)
According to law enforcement (Spotlight) data compiled by The Avery Center, there (is an estimate of) a total 18,375 sex trafficking victims in Honolulu...(that's a total of)...23,887,812 commercial sex acts per year performed by sex trafficking victims in Honolulu. (p. 3)

= = =
Viewpoints on sex trafficking from other sources:
Reason, May 2019 The Sex Trafficking Panic:

When police charged New England Patriots owner Robert Kraft with soliciting prostitution, the press said the police rescued sex slaves. "They were women who were from China, who were forced into sex slavery," said Trevor Noah on The Daily Show. We're told this happens all the time.
It's bunk, says Reason Associate Editor Elizabeth Nolan Brown. In the Robert Kraft case, she points out, "They had all these big announcements at first saying they had busted up an international sex trafficking ring, implying these women weren't allowed to leave.” But now prosecutors acknowledge that there was no trafficking. The women were willing sex workers...
Politicians tell us that thousands of children are forced into the sex trade. "Three-hundred thousand American children are at risk!" said Rep. Ann Wagner on the floor of Congress…
...celebrities...perpetuate the myth that sex slavery is rampant. "You can go online and buy a child for sex. It's as easy as ordering a pizza," says Amy Schumer. "Thousands of children are raped every day!" says comedian Seth Meyers...

The Guardian, a decade ago: Prostitution and trafficking – the anatomy of a moral panic

There is something familiar about the tide of misinformation which has swept through the subject of sex trafficking in the UK: it flows through exactly the same channels as the now notorious torrent about Saddam Hussein's weapons. In the story of UK sex trafficking, the conclusions of academics who study the sex trade have been subjected to the same treatment as the restrained reports of intelligence analysts who studied Iraqi weapons – stripped of caution, stretched to their most alarming possible meaning and tossed into the public domain. There, they have been picked up by the media who have stretched them even further in stories which have then been treated as reliable sources by politicians, who in turn provided quotes for more misleading stories...

("...the conclusions of academics who study the sex trade..." More than a few academics will regularly come up with the exact conclusions they want to find.)
The New Republic, Oct. 2015: "Human Trafficking" Has Become a Meaningless Term – Politicians and activists often abuse it to push for punitive laws or to incite moral panic.

President Barack Obama has famously declared that "human trafficking" is "modern-day slavery." He's also said that it "is a crime that can take many forms." The second definition is a good deal more accurate. "Trafficking," in practice, is less a clear-cut crime than a call to moral panic. The vagueness of the definition allows or even encourages governments, organizations, and researchers to claim that there are tens of millions of trafficking victims worldwide on the basis of little more than hyperbolic guesses...
According to Alison Bass, author of Getting Screwed: Sex Workers and the Law, "trafficking has become a new name for an old problem, which is largely teenage runaways." Young people who run away from abusive situations at home, and who sell sex to survive, are considered trafficking victims by default under many federal and state laws. This, despite the fact that hardly any teen runaways have pimps or traffickers, according to a John Jay College of Criminal Justice study. Most see sex work as the best way to support themselves on the street, given the limited legal and social service options available for children who run away from home. And most, Bass told me, do not travel out of their own town or city, much less out of the country...

Due to a sharp rise in Coronavirus cases, Greater London (32 boroughs + the City of London) will move in to Tier 3 (Very high alert) on Wednesday Dec 16th at 00:01.
Most surrounding counties including all of Kent, most of Surrey, and parts of Beds, Bucks, and Essex are (or will be - as of Saturday) in Tier 3 as well.

The Usual Stuff

Stay 2m (6ft) away from people that you don't live with where practical, and at least 1m (3ft) away at all times. Do your very best to maintain hygiene, washing your hands and shared surfaces at every opportunity. And of course, you should only do what you're comfortable with.
If you have any symptoms of COVID-19, even mild, stay home for at least 10 days until you no-longer have a temperature. Get a test through the gov.uk testing website or calling 119. Others in your household must stay home for 14 days ^source.
Most coronavirus cases are mild, but if you're very ill, call 111, or in an emergency, call 999 - DO NOT go to a GP surgery, pharmacy or hospital with COVID-19. Continue to keep NHS appointments for other purposes unless your clinician tells you otherwise or the government changes the advice.

What are the restrictions?

Under Tier 3:

In general, you cannot mix with other households indoors or outdoors, in private or public
- There are a few exceptions. You can meet with a group of six (maintaining social distance) in public parks, beaches (good luck in London), open countryside, public gardens (e.g. Kew), allotments, sports grounds, playgrounds, or in the grounds of a heritage site
Pubs, cafes and restaurants will move to takeaway only
Cinemas (other than drive in), theatres, casinos, bowling alleys, and indoor play areas all close
Attractions with indoor parts like zoos or botanical gardens have to close the indoor parts
You should work from home if you can but go to work if you can't and try to minimise journeys
You cannot stay away from home overnight apart from for work, medical, care, or other exceptional reasons

Single adult households can still form a (permanent) mutual support bubble with one other household.
There are various other exceptions for things like weddings (up to 15 people), funerals (30 people) and in a few other areas. You can read the full Tier 3 restrictions here.
You can leave your home to escape injury or harm.
If you break these rules you may be fined from £1000 or more, depending on the offence.

Making a Christmas Bubble

Between 23rd and 27th December the rules are being loosened so we can see close family and friends over the festive period. For these four days you can form an exclusive ‘Christmas bubble’ composed of people from no more than three households
Note that:

You can only be in one Christmas bubble and you cannot change your Christmas bubble
You can only meet your Christmas bubble in private homes or in your garden, places of worship, or public outdoor spaces
You can travel between tiers and UK nations for the purposes of meeting your Christmas bubble
if you form a Christmas bubble, you should not meet socially with friends and family that you do not live with in your home or garden unless they are part of your Christmas bubble

Can I visit London now?

Theoretically yes. Many of the typical tourist attractions will be closed during Tier 3 so make sure you check anything you want to do in advance and book the limited space available.
Many incoming foreign travellers from higher risk countries are subject to a mandatory two week quarantine. Check if your country is on the list.

Test to Release scheme

Starting on Dec 15th, you can reduce your time in isolation after arrival to 5 days (instead of 10 days) by paying for a coronavirus test.
This must be from a test provider participating in the government scheme and you have to opt in on your passenger locator form when you arrive in England from abroad. There are currently very few providers and the tests are quite expensive (£180) but this list will likely be expanded in the coming weeks. You will need to pre-book (there's considerable lead time).
The full guidance is here

Can I go somewhere else?

The government advises that you should not leave a Tier 3 area unless for work, education, or some other good reason, and if you normally live in a Tier 3 area you should not stay away from home overnight.

Face masks

Face coverings are compulsory on all forms of public transport and in all shops, takeaways, hospitals and care homes. This is a law and you can be fined if you do not comply. You don't need to buy a fancy respirator, instead think about buying or making your own from fabric, or use a scarf or bandana. As long as you wash them at a decent heat between uses this is much more environmentally friendly than disposable surgical masks.

The NHS App

The NHS COVID-19 app is now available. It uses Apple & Google's co-developed bluetooth protocol which does not transmit any of your personal details to anyone, including the government. It's been used as the basis for apps in privacy-conscious countries like Germany and Ireland, and is generally considered safe and secure.
The app is particularly effectively in dense urban areas, and NHS England's also includes features to help you check in to venues and get a test.
Download it!

Get help or give help

With the short days, the cold weather, and the lockdown restrictions, this is going to be a hard time for everyone.

If you're feeling the strain or just feeling lonely and want to talk to someone the /MentalHealthUK master post is a great place to start.
Also try our Daily Observations thread or /LondonSocialClub for virtual meets!
Mutual Aid groups are local groups organised to support the most vulnerable in our communities. Find your Mutual Aid Group here.
You can also Volunteer for the NHS. They're reopened applications recently.

This is not official advice - just our summary and might contain errors and omissions. Check gov.uk for the letter of the law. Please post any feedback or suggestions

Reposting this DD after it was removed by mods first time around. Potential offending points have been removed.
---
Some of the market stats are a little outdated (market cap, current multiples, etc.) but are correct as of Feb-06. This was originally written for another purpose.
Not a financial advisor, do your own DD. I am long HITI and have an expectation of a long term hold on this stock.
Overview

High Tide Canada-based cannabis retail company, operating under multiple brands. It operates under 3 core divisions:

Brick and mortar retail – 4 key brands with just under 70 locations in Canada. Brands include: Canna Cabana, New Leaf, Meta Cannabis and Kushbar. Forecast to have around 115 stores by end of 2021
Online retail – has 2 brands, both of which attract millions of viewers per month – Grasscity.com and CBDcity.com
Wholesale – manufacturer of paraphernalia in US and Canada. Number of products are branded with various celebrities, Snoop Dogg, Paramount Pictures, Trailer Park Boys and many more

Has good c-level execs and experienced executive board; hold significant stake in the business. CEO Raj Grover holds just over 21% of the shares
Currently has a market cap of around $280m. Still significant upside to the valuation – see analysis later in post

Investment Merits
Very strong market growth:

Business has demonstrated growth both organically (through new store openings, more online sales and greater wholesale sales), as well as inorganically through M&A
Growth in markets which High Tide has a physical presence in is expected to be very strong. North American cannabis market (Canada and US) is forecast to grow by 30% a year to 2027 (source: research and markets)
Analysts covering High Tide are forecasting growth in excess of this, which is positive to see and implies capturing market share
New markets / geographies ‘opening up’, legalizing and regulating cannabis is also an exciting and realistic prospect for incremental growth:

The US federal legalization debate is on the table
Many other countries are considering this too and High Tide is well positioned for these; this is catalyzed by the fact that government debt has increased significantly as part of the response to the COVID-19 health crisis. This needs to be repaid somehow, and increasing tax rates on existing taxes is an unpopular political move. Finding new tax revenues is a more palatable way of increasing tax revenues for governments. This is especially important in countries where elections are upcoming.

Personally I do expect to see this accelerate the agenda for the regulation and legalization of cannabis in many new countries
Whilst predominantly Canada and US based, High Tide does have presence in some markets where cannabis is not regulated or legalized, the UK for example (~10% of Grasscity sales are made here) and so it is well positioned with a strong and established brand to capitalize on this opportunity, when / if the market ‘opens up’

Regulation

High Tide benefits from the regulatory focus and overhang on the cannabis retail sector as it represents a strong barrier to entry, making it more challenging for new competitors to enter market
Participants in the market need to have licenses and ensure consistent compliance with laws to continue operating – failure to comply can result in significant financial penalties
Personally I normally don’t like investing into retail. There are usually fairly limited barriers to entry, minimal differentiation and negligible customer loyalty, however the cannabis market does have different characteristics in this respect and makes it a more compelling proposition
Regulation also benefits those with scale, something High Tide has as the leading player in the market. It costs money to obtain and retain licences to operate and it costs money to ensure compliance with all the laws and regulations and that all staff are acting in accordance with these
Some parallels in this respect which can be drawn to casino gaming in casinos; you don’t see new casinos popping up at the same rate which you see new restaurants or apparel stores opening

Demand

There’s a lot to like about the demand dynamics for High Tide. It’s vice-nature means that demand is less correlated to disposable incomes. Given where we are in economic cycle, especially important consideration
For those doubting this, check alcohol, tobacco or gambling expenditure across economic cycles historically, for a proxy

Strong performance throughout COVID-19 crisis

Despite heavy weighting towards brick and mortar, (the most hard hit part of retail) it has effectively managed the shift to online, which is a positive
Has relied on government support and financial assistance in the form of job retention schemes (address in more detail later in post)
This demonstrates management are capable and have effectively navigated the challenging situation

Data

Massively summarized from the other purpose, however, they have unique access to supply chain data which could be monetized effectively and generate strong levels of recurring revenues
Other established sectors have a trusted party with such unique access to data (e.g. alcohol, lithium, different foods, etc.) and the opportunity here is enormous
I would like to see High Tide capitalize on this

Forecasts financials & analysts

Currently 2 analysts covering High Tide, both have a buy rating on the business
Their coverage is slightly outdated (expect this being updated soon and a further catalyst for positive price action) and their price targets are 60c; at the time their reports were published, they were forecasting a 4x upside (HITI was trading at ~15c)
Same analysts also forecasting strong growth - 77% CAGR to 2022. They are forecasting revenues of around $250m and EBITDA of $46m. A reminder here, these are professional analysts, not YouTube students – these come from their financial models, the assumptions of which are discussed with management

https://preview.redd.it/csw4p0vpoxg61.png?width=602&format=png&auto=webp&s=143ac8f94e6fcd4df3d50d41f513da45367f28f1
Valuation

Going to go quick here, however, High Tide is currently valued at a significant discount to the other listed peers
Looking at EV / FY+1 Sales multiples – EBITDA not meaningful as some of the peer group are EBITDA negative and High Tide itself has only recently become EBITDA positive

https://preview.redd.it/zo0vr7vqoxg61.png?width=262&format=png&auto=webp&s=686be7e82e3fbfb3d7021823ed84f2cf795b49d2

Personally, I think Planet13 is the most comparable given its business model
Taking both Planet13 multiple and peer group average multiple, this is then applied to High Tide’s forecast FY+1 sales to calculate an enterprise value – this is adjusted for net debt to get to a market capitalization and then divided by the share count to get an implied share price
The table below shows the implied stock price valuations from this analysis

https://preview.redd.it/qp6qea1soxg61.png?width=277&format=png&auto=webp&s=3333aa9ea7213961a44bc37e4292bad316872b48
NB – assumed the following:

Net debt will change in coming year given the capital structure and a large number of convertible notes – this has been ignored given it will have small impact on the price
The share count will change as a result of dilution from various instruments – if this bothers you massively then look at the valuation discount on the basis of the enterprise value as it does not impact this (and only slightly on the market cap given minimal impacts to cash from instrument execution, etc.)
Not accounting for any stock split, consolidation or any other M&A deals
The FY21 financials are on the basis of the mean broker estimates from Thomson Reuters – Seeking Alpha has different and slightly outdated ones

Investment Risks & Mitigants / Outstanding DD points
Exposure to changing regulation

US is only a small part of the market which High Tide addresses, while a change in regulation would have a big impact on the company, currently it is unlikely this would happen, given the discussions about potential federal legalization
Canada regulation is established and not going anywhere
Other countries likely to legalize and regulate cannabis, as outlined earlier

Dilution

No escaping that there will be some significant dilution for shareholders, as pointed out in the table below, but this should be already priced into the stock
Potential that new equity issuances could occur to help finance growth, but provided this growth is delivered, it should be accretive for the stock price

https://preview.redd.it/aaslgozsoxg61.png?width=463&format=png&auto=webp&s=767bffe9d6906bf21340aecd884cfad5ec7219c4
Potentially misleading cost basis information

A risk that investors need to be aware with for all companies which have relied on government financial support during COVID-19 measures. Such support has resulted in the number of businesses going bankrupt decreasing massively – this is at a lower level than it ever normally is and is masking some real underlying issues within companies. As investors we need to be open eyed about this
As High Tide has benefited from support in the form of the Canada’s Emergency Wage Support scheme, there is the risk that once this is lifted it may become apparent that the cost base has not been effectively managed
Personally, I think this is mitigated by the synergy analysis conducted as part of the M&A. A full cost base analysis would have been conducted to calculate the potential $8.4m synergies so strong likelihood that this is under control, but should keep on our radar and reassess

Marketing expenses and celebrity licenses

Need more information to ascertain whether these are underpinned by a compelling ROI. Seen a lot of people suggest this is a great positive, but the impact on sales volumes from these is unknown, as is the terms of these license agreements (e.g. split between upfront fee vs. volume-based fee)
No escaping the fact that it is an increased cost and so need to understand the ROI this generates to determine whether it really is compelling
Is there really more demand to pay a premium for Snoop Dogg bongs, Guns n Roses papers, Cheech & Chong grinders, or whatever they may be?
So far management have suggested this has been helpful in driving new sales, but this is something to dig into more
TLDR

Despite the recent rally in stock price, the business remains undervalued on a relative basis versus its peers (analysis in body of post). There is a compelling investment case for High Tide where in my opinion the merits of the investment outweigh the risks. Clearly given the small cap nature of the stock, this is inherently more volatile than larger blue chip stocks and carries with it a degree of risk.

Hi everyone, this is my first contribution to HobbyDrama, I hope this is an entertaining read and also to the community's standards. Let's go!!
Brief glossary before we begin (and some foreshadowing)
MMORPG: massively multiplayer online role-playing game, MMO for short. A videogame genre that generally invites hundreds, or up to thousands, of players to share a space. Depending on the game, anything from general adventure to large-scale war to economy and politics can be simulated. I find it hard to believe that anyone reading this could possibly not know what this is but it's included anyway.
Electro-convulsive therapy: ECT for short, it is a form of treatment where electrodes are "carefully" hooked up to a person's head and a "precise" level of electric shock is delivered, in order to treat major psychiatric disorders. Developed in 1938 when most psychiatric treatments was in their infancy, it is still used today occasionally for serious cases of depression, mania, or psychoses. In its early days however, there were widespread claims of abuse associated with its use.
Pt1: The Root of all that is bullshit
Zhengtu Online (hereafter referred to as ZT) was an immensely popular MMORPG that was developed in China and primarily served a Chinese playerbase. Released in 2006, at its peak it boasted more 2 million players, which while not particularly impressive relative to World of Warcraft (8mil worldwide at the same time), was a truly insane amount of success in a gaming scene that was very much in its embryonic stage.
The game itself was an unimpressive Diablo-style top down fantasy setting, and its gameplay loop primarily revolved around improving your ability to kill various things, but what made it special was the overarching metagame: every player population (sharing a server) was divided into 10 kingdoms. Kings and generals were all individual players, and they dictated politics to their neighbors--primarily in the form of initiating player-vs-player (or PVP) warfare.
Most contemporary MMOs had an upfront price plus a monthly subscription fee. In China, such pricing models were mostly replaced by paying oney for a set amount of ingame playing time. Unlike all of them, ZT was completely free to play (F2P).
Free to play, however, meant pay-to-win: the best weapons and armor, and even leveling up your character, needed you to pay real money. Since so much of the game was focused on PVP, it also created an eternal arms race between players, each paying for the privilege of not being evaporated by a high level enemy.
The way they did this was unique at the time. While F2P online games had already seen their rise in South Korea, equipment was generally priced explicitly via in-game currency and bought in virtual shops. ZT fused this with the sweet, sweet taste of gambling: gear in the game was primarily obtained in loot boxes, and you had to pay for keys to open them.
It needs to be emphasized that gambling of any kind was illegal in China, but, in an eerie parallel of American CEOS in the future, ZT's developers said it wasn't gambling because, well, you weren't getting your money back.
By combining this with multiple other exploitative practices, such as providing a small amount of premium currency like a casino giving you a free bet on the house, or awarding special items to the player with the highest number of lootboxes opened in a day, ZT was making money like taking candy from a candy-hating baby, and made gaming history.
As far as what this means for gamers, this was Eve giving Adam the apple, Oppenhemier splitting the atom, Prometheus stealing fire, Caesar crossing the Rubicon, and goddamn Helen Keller signing "water".
If you play any kind of videogames today, you've stepped through the long shadow that ZT had cast. Zynga (developers of Farmville) would be founded in 2007 and focused exclusively on free games with real-money integration. Lootboxes made it into Team Fortress 2 in 2010, one of the first major western-developed games to include them.
Similar mechanics (with varying degrees of exploitative practices) came to FIFA in 2010, Mass Effect 3 in 2012, Counter-Strike in 2013, League of Legends in 2016, and NBA 2K in 2017, infecting every genre of gaming under the sun, including the most popular MMO, World of Warcraft. As an aside, corporate defense of lootboxes in Star Wars Battlefront II also led to the most downvoted Reddit comment of all time.
Finally someone speaks out
The System, an article published in the Chinese newspaper Southern Weekly in 2007, was a hard-hitting expose on the exploitive practices of ZT. It chronicled the rise and fall of a gamer who accidentally becomes the monarch of one of these in-game Kingdoms, her addiction to the game, and final disillusionment when she realized that in-game player behaviour was being explicitly manipulated by its designers for the purpose of creating addicts and selling more lootbox keys.
The whole article is worth a read, even if it is sensationalist in a way that immediately tells you the writer was clearly a failed novelist of some kind - describing virtual destruction with the kind of prose most people would consider and then discard for a gang rape, for starters. But it had gotten its point across. It created an explosive backlash against the game in China, and was even translated into English and propagated across gaming forums.
The fallout
In an act of censorship usually reserved for the CCP government, this article--including its English translation--began to be scrubbed from the internet, with speculation pointing to the immensely powerful CEO behind ZT. I mean, who else could it be, right?
This article would light the fire of China's first moral panic regarding videogames. In its wake, swift legislation would be enacted regarding internet gaming addiction as well as online proxy gambling. ZT would heed the new laws and remove its lootbox mechanics in the following years and many other similar games followed suit.
Most tragically, the panic (which, to be fair, was fueled by a very real problem) allowed unscrupulous characters such as Yang Yongxin, vice chairman of a hospital in Shandong province, to create "internet addiction centres". With its legitimacy established by a docuseries ("Fighting the Internet Monster") on the state-run television channel CCTV, these centres charged terrified parents exorbitant prices in order to keep teens by force in, essentially, private hospitals and asylums, subjecting them to inhumane conditions and abusive ECT in order to "cure" them of their disease. It was estimated that Yang earned the equivalent of more than $6million USD from his addiction centre in the short space of 2 years. While his centre was eventually closed by state order, he received no punishment of any kind.
As for ZT, it limped on until 2018. A mobile game reboot was made in 2015. A tie-in fantasy movie was released in 2020. it was not very good.
~~~~~~
Addendum: how we got here: Of Mice and levers
In the 1950s, an American scientist named BF Skinner discovered the following: when mouse is put in a box with a small lever that, when pressed, dispenses a food pellet, they will quickly learn to start pressing on the lever as fast as possible. If you then stop the food from dispensing, the mouse will lose interest quickly after pressing a few times and seeing no food coming out.
If, however, you hooked up the lever to dispense food at random intervals, the mouse will be practically glued to the lever and hammer on it nonstop, sometimes long after they become full, and long after any food has been dispensed.
This discovery, known as variable outcome operant conditioning, formed the foundation of our understanding of addiction and gambling. Skinner would go on to try and fail to make bombs guided by pigeons, but we're not interested in that here. His research tool--the Skinner Box--would become a descriptor you may have come across when discussing exploitive game mechanics.
Summary
Once upon a time, a game combined the random outcome of videogaming with real-money gambling. This has made a lot of people very angry and been widely regarded as a bad move.

I posted this yesterday morning (UK time) but after 5 hours or so, pennystocks deleted the original post. A few people messaged me asking for it to be shared in a few High Tide specific pages. So here it is! Hope this is OK for the mods here?
--
This is my first time posting a DD post – a friend of mine who moderates on SPACs has shared some analysis I have written previously, but I’m keen to share this here, and see if there is any appetite for sharing my own personal written DD I have on the 30 stocks I have across a number of different portfolios.
I have modified this format, as it was originally a script for a video which I created on the stock. If you prefer to listen – check it out here: https://youtu.be/qsjwU7kkPsw
Some of the market stats (market cap, current multiples, etc.) are correct as of Feb-06, and clearly a little outdated since the price movements.
Not a financial advisor, do your own DD. I am long HITI and have an expectation of a long term hold on this stock.
Overview

High Tide Canada-based cannabis retail company, operating under multiple brands. It operates under 3 core divisions:

Brick and mortar retail – 4 key brands with just under 70 locations in Canada. Brands include: Canna Cabana, New Leaf, Meta Cannabis and Kushbar. Forecast to have around 115 stores by end of 2021
Online retail – has 2 brands, both of which attract millions of viewers per month – Grasscity.com and CBDcity.com
Wholesale – manufacturer of paraphernalia in US and Canada. Number of products are branded with various celebrities, Snoop Dogg, Paramount Pictures, Trailer Park Boys and many more

Has good c-level execs and experienced executive board; hold significant stake in the business. CEO Raj Grover holds just over 21% of the shares
Currently has a market cap of around $280m. Still significant upside to the valuation – see analysis later in post

Investment Merits
Very strong market growth:

Business has demonstrated growth both organically (through new store openings, more online sales and greater wholesale sales), as well as inorganically through M&A
Growth in markets which High Tide has a physical presence in is expected to be very strong. North American cannabis market (Canada and US) is forecast to grow by 30% a year to 2027 (source: research and markets)
Analysts covering High Tide are forecasting growth in excess of this, which is positive to see and implies capturing market share
New markets / geographies ‘opening up’, legalizing and regulating cannabis is also an exciting and realistic prospect for incremental growth:

The US federal legalization debate is on the table
Many other countries are considering this too and High Tide is well positioned for these; this is catalyzed by the fact that government debt has increased significantly as part of the response to the COVID-19 health crisis. This needs to be repaid somehow, and increasing tax rates on existing taxes is an unpopular political move. Finding new tax revenues is a more palatable way of increasing tax revenues for governments. This is especially important in countries where elections are upcoming.

Personally I do expect to see this accelerate the agenda for the regulation and legalization of cannabis in many new countries
Whilst predominantly Canada and US based, High Tide does have presence in some markets where cannabis is not regulated or legalized, the UK for example (~10% of Grasscity sales are made here) and so it is well positioned with a strong and established brand to capitalize on this opportunity, when / if the market ‘opens up’

Regulation

High Tide benefits from the regulatory focus and overhang on the cannabis retail sector as it represents a strong barrier to entry, making it more challenging for new competitors to enter market
Participants in the market need to have licenses and ensure consistent compliance with laws to continue operating – failure to comply can result in significant financial penalties
Personally I normally don’t like investing into retail. There are usually fairly limited barriers to entry, minimal differentiation and negligible customer loyalty, however the cannabis market does have different characteristics in this respect and makes it a more compelling proposition
Regulation also benefits those with scale, something High Tide has as the leading player in the market. It costs money to obtain and retain licences to operate and it costs money to ensure compliance with all the laws and regulations and that all staff are acting in accordance with these
Some parallels in this respect which can be drawn to casino gaming in casinos; you don’t see new casinos popping up at the same rate which you see new restaurants or apparel stores opening

Demand

There’s a lot to like about the demand dynamics for High Tide. It’s vice-nature means that demand is less correlated to disposable incomes. Given where we are in economic cycle, especially important consideration
For those doubting this, check alcohol, tobacco or gambling expenditure across economic cycles historically, for a proxy

Strong performance throughout COVID-19 crisis

Despite heavy weighting towards brick and mortar, (the most hard hit part of retail) it has effectively managed the shift to online, which is a positive
Has relied on government support and financial assistance in the form of job retention schemes (address in more detail later in post)
This demonstrates management are capable and have effectively navigated the challenging situation

Data

Massively summarized from the video, (and my video on KERN) so check that out if interested in this point, however, they have unique access to supply chain data which could be monetized effectively and generate strong levels of recurring revenues
Other established sectors have a trusted party with such unique access to data (e.g. alcohol, lithium, different foods, etc.) and the opportunity here is enormous
I would like to see High Tide capitalize on this

Forecasts financials & analysts

Currently 2 analysts covering High Tide, both have a buy rating on the business
Their coverage is slightly outdated (expect this being updated soon and a further catalyst for positive price action) and their price targets are 60c; at the time their reports were published, they were forecasting a 4x upside (HITI was trading at ~15c)
Same analysts also forecasting strong growth - 77% CAGR to 2022. They are forecasting revenues of around $250m and EBITDA of $46m. A reminder here, these are professional analysts, not YouTube students – these come from their financial models, the assumptions of which are discussed with management

https://preview.redd.it/5pwznbe5xmg61.png?width=602&format=png&auto=webp&s=bb1be853d9db5eaa7dc3c7b26630a173bbd064cf
Valuation

Going to go quick here, its explained more slowly in the video but High Tide is currently valued at a significant discount to the other listed peers
Looking at EV / FY+1 Sales multiples – EBITDA not meaningful as some of the peer group are EBITDA negative and High Tide itself has only recently become EBITDA positive

https://preview.redd.it/l52oajp6xmg61.png?width=342&format=png&auto=webp&s=e31e1944101c6488a24f470bc3b91744f4c2dccf

Personally, I think Planet13 is the most comparable given its business model
Taking both Planet13 multiple and peer group average multiple, this is then applied to High Tide’s forecast FY+1 sales to calculate an enterprise value – this is adjusted for net debt to get to a market capitalization and then divided by the share count to get an implied share price
The table below shows the implied stock price valuations from this analysis

https://preview.redd.it/2j51fwigxmg61.png?width=406&format=png&auto=webp&s=f678c5c66ced846ac45fa698c7e454f71a4232b6
NB – assumed the following:

Net debt will change in coming year given the capital structure and a large number of convertible notes – this has been ignored given it will have small impact on the price
The share count will change as a result of dilution from various instruments – if this bothers you massively then look at the valuation discount on the basis of the enterprise value as it does not impact this (and only slightly on the market cap given minimal impacts to cash from instrument execution, etc.)
Not accounting for any stock split, consolidation or any other M&A deals
The FY21 financials are on the basis of the mean broker estimates from Thomson Reuters – Seeking Alpha has different and slightly outdated ones

Investment Risks & Mitigants / Outstanding DD points
Exposure to changing regulation

US is only a small part of the market which High Tide addresses, while a change in regulation would have a big impact on the company, currently it is unlikely this would happen, given the discussions about potential federal legalization
Canada regulation is established and not going anywhere
Other countries likely to legalize and regulate cannabis, as outlined earlier

Dilution

No escaping that there will be some significant dilution for shareholders, as pointed out in the table below, but this should be already priced into the stock
Potential that new equity issuances could occur to help finance growth, but provided this growth is delivered, it should be accretive for the stock price

https://preview.redd.it/t0im6idhxmg61.png?width=602&format=png&auto=webp&s=4bff366e68eeeadd5ac49ab5d97885685a327a6b
Potentially misleading cost basis information

A risk that investors need to be aware with for all companies which have relied on government financial support during COVID-19 measures. Such support has resulted in the number of businesses going bankrupt decreasing massively – this is at a lower level than it ever normally is and is masking some real underlying issues within companies. As investors we need to be open eyed about this
As High Tide has benefited from support in the form of the Canada’s Emergency Wage Support scheme, there is the risk that once this is lifted it may become apparent that the cost base has not been effectively managed
Personally, I think this is mitigated by the synergy analysis conducted as part of the M&A. A full cost base analysis would have been conducted to calculate the potential $8.4m synergies so strong likelihood that this is under control, but should keep on our radar and reassess

Marketing expenses and celebrity licenses

Need more information to ascertain whether these are underpinned by a compelling ROI. Seen a lot of people suggest this is a great positive, but the impact on sales volumes from these is unknown, as is the terms of these license agreements (e.g. split between upfront fee vs. volume-based fee)
No escaping the fact that it is an increased cost and so need to understand the ROI this generates to determine whether it really is compelling
Is there really more demand to pay a premium for Snoop Dogg bongs, Guns n Roses papers, Cheech & Chong grinders, or whatever they may be?
So far management have suggested this has been helpful in driving new sales, but this is something to dig into more

If you want to check out the video, it would be appreciated: https://youtu.be/qsjwU7kkPsw

Online Casino Laws In The UK: How Does It Work?

casino laws uk

casino laws uk - win

How a short/gamma squeeze on Tilray is causing the ENTIRE cannabis market to moon and how to avoid becoming a bag holder when this all comes crashing down

THIS IS WHAT IS REALLY HAPPENING:

ITS CALLED MEAN REVERSION. THIS CANT GO ON FOREVER.

Let's see what happened with TLRY last time this happened (oh, you're new here? Yeah, this isn't the first time):

NONE OF THESE COMPANIES HAVE REAL USA MARKET EXPOSURE, THEY ARE CANADIAN COMPANIES. THEY DO NOT HAVE MARKET POSITIONING AND ARE NOT POISED TO TAKE ADVANTAGE OF US LEGALIZATION.

SIR, THIS IS A CASINO.

Timeline of Trump's Russia Connections from KGB Cultivation to United State President

Lost in the Sauce: Trump, Cruz, and Gohmert team up to incite election-related violence

Election shenanigans

Obstructing the transition

Sabotaging the Biden Administration

Trump money and properties

Miscellaneous

Detailed DD post [re-post after r/pennystocks removed it]

FIRE. What it's like, how to get there.

1What retiring early is like

2How to get there

2.1Difficulty modes

2.1.1Easy mode: Get free university education, get a good job, buy a cheap house

2.1.2Medium mode: Don't have kids

2.1.3Hard mode: Have kids

2.2Control your costs

2.3Plan a little

2.3.1Cash drawdown per month until death

2.3.2Cash dividends per month

2.4Play it safe, but not too safe

2.5Personal Story

Playboy going public: Porn, Gambling, and Cannabis

Women's group warns of major sex trafficking if casino plan goes through

Greater London in Coronavirus Tier 3 (Very high alert) from Weds 16th Dec 00:01

The Usual Stuff

What are the restrictions?

Making a Christmas Bubble

Can I visit London now?

Test to Release scheme

Can I go somewhere else?

Face masks

The NHS App

Get help or give help

Not just another HITI / HITIF post... Serious DD incl. valuation analysis

[Videogames] Zhengtu Online, The Original Sinner of free-to-play gaming and lootboxes

Detailed DD post [re-post after r/pennystocks deleted it]

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