Bassett Furniture (BSET) – Raises Quarterly Dividend by 14%

Friday, July 15, 2022

Bassett Furniture (BSET)
Raises Quarterly Dividend by 14%

Bassett Furniture Industries, Incorporated manufactures, markets, and retails home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of September 16, 2017, the company operated a network of 91 company-and licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. In addition, the company owns and leases retail store properties. It also distributes its products through other multi-line furniture stores, Bassett galleries or design centers, specialty stores, and mass merchants. Bassett Furniture Industries was founded in 1902 and is based in Bassett, Virginia.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Increased Dividend. As we expected, Bassett’s Board of Directors increased the quarterly dividend, raising the quarterly payout by 14% to $0.16 per share of common stock. The dividend increase is part of management’s goal of returning capital to shareholders. As we mentioned in our last report, the sale of Zenith and the strong operating results year-to-date have enabled Bassett to return excess capital to shareholders, including a one-time special dividend, share repurchases, and now an increased regular quarterly dividend.

Swimming Against the Tide. Since the June 30th release of fiscal second quarter earnings, BSET shares have risen 38.7%, compared to a 0.7% rise for the NASDAQ composite. The rise is being driven by the Company’s solid operating results, as well as the ongoing return of capital, in our opinion….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Release – ACCO Brands Corporation Announces Second Quarter 2022 Earnings Webcast



ACCO Brands Corporation Announces Second Quarter 2022 Earnings Webcast

Research, News, and Market Data on ACCO Brands

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today announced that it will release its second quarter 2022 earnings after the market close on August 8, 2022. The Company will host a conference call and webcast to discuss the results on August 9 at 8:30 a.m. EST. The webcast can be accessed through the Investor Relations section of www.accobrands.com and will be available for replay.

About ACCO Brands
Corporation

ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, play and thrive. Our widely recognized brands include AT-A-GLANCE®, Five Star®, Kensington®, Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com.

Christopher McGinnis
Investor Relations
(847) 796-4320

Julie McEwan
Media Relations
(937) 974-8162

Source: ACCO Brands Corporation


The GameStop Stock Split Dividend is More Genius than it Appears



Image Credit: Ryan (Flickr - modifications made)


The GameStock Stock Split May Serve to Chase out Institutional Short-Sellers

GameStop announced a three-share dividend for each share held. This is somewhat different than a four-for-one stock split from a tax standpoint and for those that are short GameStop. The move has an immediate impact on those that own the stock (largely individual investors), and on the many that are still short the stock (largely institutional investors). The announced split, or the split dividend, where holders would receive three additional shares of (GME) after the market close on July 21, has caused some confusion among the retail holders of the stock – and is likely causing some pain among those that are short GameStop. Shares are up near 8% today (July 7) on the news. 


Source: Gamestop.com


What to Know

GameStop shareholders voted in June in favor of allowing expanded share authorization to one billion outstanding shares from 300 million. This authorization allows for the announced split. During the spring, management asked for authorization saying the split would “provide flexibility for future corporate needs.”

The foreshadowing of this split should have made the high percentage of short-interest in GME retreat some. Recent Morningstar data shows that 21% of GameStop’s entire stock float was being shorted. A short interest percentage above 15% is generally considered to be elevated. Short-sellers are responsible for compensating the lending broker for all dividends. This is generally simple with cash dividends but could be messy when the dividend is stock shares.

The additional shares will be distributed on July 21, and Gamestop stock will begin trading on a split-adjusted basis on Friday, July 22.

The dividend will have the effect of reducing the cost of each share after the split,  this will make it easier for smaller investors to purchase shares of the company. The heightened access to shares could positively impact the market value of all shares outstanding post dividend-split.

 

Management Difference

Ryan Cohen became the chairman of GameStop’s board a year ago. The company has been modernizing by adding executives and employees with backgrounds in technology, e-commerce, and blockchain. It’s a classic fight for survival for the company that began its lifecycle as cutting edge and later found itself stodgy and old. Newer products are being added to the company’s line-up designed to put them back as a solid competitor in today’s gaming retail world.

Following the appointment of Cohen, the company invested in fulfillment and customer care, as well as expanding its offerings to include TVs, computer supplies, and even a marketplace for NFTs.

Management’s decision to provide a split in the form of a dividend raises additional challenges for short sellers of GME. The value of stocks tend to rise after a split welcomes smaller buyers that may have been locked out. This could serve to cause a squeeze on short players already forced by rising margin interest rates. As a dividend, rather than a split, there is an obligation for short sellers to make those they borrowed the stock from whole. This could cause many short positions to be closed out before the record date of the dividend.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://news.gamestop.com/news-releases/news-release-details/gamestop-announces-four-one-stock-split

https://www.thestreet.com/memestocks/gme/why-gamestop-stock-is-on-a-verge-of-a-short-squeeze#:~:text=Short%20interest%3A%20The%20latest%20data,stock%20float%20was%20being%20shorted.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1326380/000132638022000100/gme-20220706.htm

https://www.thestreet.com/memestocks/gme/gamestop-stock-is-there-still-short-squeeze-potential


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Bassett Furniture (BSET) – Bests 2Q22 Consensus, But What About Going Forward?

Tuesday, July 05, 2022

Bassett Furniture (BSET)
Bests 2Q22 Consensus, But What About Going Forward?

Bassett Furniture Industries, Incorporated manufactures, markets, and retails home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of September 16, 2017, the company operated a network of 91 company-and licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. In addition, the company owns and leases retail store properties. It also distributes its products through other multi-line furniture stores, Bassett galleries or design centers, specialty stores, and mass merchants. Bassett Furniture Industries was founded in 1902 and is based in Bassett, Virginia.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q22 Results. Revenue for the fiscal second quarter ended May 28th was $128.7 million, up 17.0% over the prior year period and up from $117.1 million in the fiscal first quarter. Wholesale revenue rose 15.3% to $87.5 million, while Retail revenue rose 21.0% to $75.6 million. Bassett reported net income from continuing operations of $7.7 million, or $0.81 per share, compared to net income from continuing operations of $5.1 million, or $0.51 per share, in the prior year. We had forecast revenue of $116 million and EPS from continuing operations of $0.46.

Record Retail. The second quarter was an all-time record sales and profitability performance for the Retail segment. Basset continues to refine it’s store network and the move to open regional fulfillment centers should expand the addressable market as consumers seeking an “immediate” option will now be able to shop Bassett….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Virtual Roadshow Replay – Schwazze (SHWZ) CEO Justin Dye and CFO Nancy Huber


Schwazze CEO Justin Dye and CFO Nancy Huber make a formal corporate presentation. Afterwards they are joined by Noble Capital Markets Senior Research Analyst Joe Gomes for a Q & A session.

Research, News, and Advanced Market Data on SHWZ


Information on upcoming live virtual roadshows


Schwazze (OTCQX: SHWZ) is building the premier vertically integrated cannabis company in Colorado and plans to take its operating system to other states where it can develop a differentiated leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices. Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc.

Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

Revlon Caught WallStreetBets Attention and is Soaring



Image Credit: Diverse Stock Photos (Flickr)


Will Bankrupt Revlon Get a Makeover from a Self-Directed Investor Frenzy?

The 80% increase in Revlon’s (REV) price Tuesday (June 21) shows that strong influence remains in the hands of retail investors. The company, which declared bankruptcy last week, is now up 461% since that announcement. At play is the same social media communication network that helped drive up GameStop (GME) in early 2021, provided capital to AMC Theaters (AMC), and elevated values of cruise lines that sat mostly idle during the pandemic. This time, it’s again with a household name that was getting a large amount of short-seller attention.

Revlon hit a low last week of $1.08 and has since rocketed up to $6.06 which it hit yesterday (June 21). The impetus seems to have begun with a Reddit post.  A member of r/wallstreetbets compared the current setup in Revlon to Hertz (HTZ) in 2020, noting that the company has an iconic 90-year-old brand and also has a high short interest of 37%. Today, Revlon’s short interest as a percentage of the total float increased to more than 50%, and Fintel identified the company as a top short-squeeze candidate.

The Reddit post asked, “Is there a chance [Revlon] becomes a meme stock?”


Source: Koyfin

The strong buying by self-directed individual investors is reflected as it’s one of Fidelity’s top ten-traded tickers. The broker showed Revlon as the ninth most popular stock traded by their customers on Tuesday, with buying pressure outweighing selling pressure.


Image: upikatruuu (r/wallstreetbets)

Hertz was able to quickly resolve its bankruptcy as its market value and access to capital increased and protection from lenders allowed it to shed over $5 billion in debt.

This is a possible attempt to replicate the magic of Hertz, which soared nearly ten-fold in June 2020 after the company filed for bankruptcy, this activity could provide Revlon with more options.

For now, the stock is acting in a similar fashion to Hertz and other meme stocks. The rally has been intense and supported by volume. The company is using the bankruptcy process to reorganize its capital structure as it has high debt and struggles with declining sales due to people staying inside during the pandemic, the continued work-from-home environment, and competition from Kim Kardashian West and Kylie Jenner’s makeup brands, among others.

One unanswered question equity investors in Revlon may wish to resolve, is if Revlon’s equity holders will be left with anything after the bankruptcy proceedings or if the courts and company prioritize paying back notes and other loans. For now, retail investors are betting there might just be some equity value remaining, and that momentum carries the stock price even higher.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://investors.revlon.com/news-releases/news-release-details/revlon-takes-step-towards-reorganizing-capital-structure-company

https://www.bloomberg.com/news/articles/2022-06-16/revlon-files-for-bankruptcy-facing-high-debt-supply-chain-pain

https://www.reddit.com/r/wallstreetbets/comments/vdx78t/what_do_we_think_of_revlon/

https://www.vandatrack.com/

https://eresearch.fidelity.com/eresearch/gotoBL/fidelityTopO

https://investorplace.com/2022/06/revlon-is-bankrupt-what-comes-next-for-rev-stock/

https://markets.businessinsider.com/news/stocks/revlon-stock-price-chapter-11-bankruptcy-meme-stock-retail-investors-2022-6

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Vera Bradley (VRA) – Shares in the Discount Bin; Initiating Coverage with An Outperform Rating

Thursday, June 16, 2022

Vera Bradley (VRA)
Shares in the Discount Bin; Initiating Coverage with An Outperform Rating

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating Coverage. We are initiating research coverage on Vera Bradley, Inc. with an Outperform rating and an $8.00 12-month price target. Vera Bradley is the owner of two unique lifestyle brands. With the recent overall market sell-off, VRA shares are selling at all-time lows, outside of the COVID induced panic in mid-2020. With significant organic and inorganic growth opportunities, we believe VRA shares present an attractive risk/reward situation.

The Brands. The iconic Vera Bradley brand is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. The Company operates through a network of retail, wholesale and e-commerce sites. Pura Vida is is a rapidly growing, digitally native lifestyle brand. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Cannabis Tourist Destinations Growing


Image Credit: Teodor Savin (Pexels)


Cannabis Tourism: How a New Travel Trend is Taking Off

Legal cannabis consumption rose in the US and Europe during the COVID pandemic, with some people turning to marijuana to help them cope with lockdowns and broken routines. Meanwhile, fewer people today view the drug as harmful compared to previous decades.

These factors may have contributed to a trend toward cannabis-related tourism, with destinations developing new holiday products to tempt customers and rising travel bookings to destinations where cannabis is legal. But there are risks for both destinations and tourists in embracing this trend.

Work by MMGY Travel Intelligence found that 29% of leisure travelers are interested in cannabis-related tourism. A study by the Dutch government revealed that 58% of international tourists choose Amsterdam in order to consume drugs. And business in Dutch coffee shops has increased since the start of the pandemic.

Nine months after Illinois legalized recreational cannabis in January 2020, nearly 30% of purchases were by non-residents. Thailand has just announced it has legalized cannabis and is hoping this will boost tourism.

The tourism sector and specific destinations have reacted quickly to the demand for cannabis, hemp, and CBD-related products by designing experiences that include those elements. They are also responding to the expected economic potential related to increased hotel occupancy, tax revenues, increased land values, business expansion, jobs, and public health and safety benefits that could be connected to cannabis sales.

Yet, although tourism to other destinations with legalized cannabis is growing in popularity, data is only beginning to be collected. And so far, no destination is ready to be labeled as the “next Amsterdam”.

Big Potential

While cannabis-related travelers are believed to be high-spending and well-educated, authorities don’t want to replicate the Dutch model, which led to a massive concentration of cannabis coffee shops in Amsterdam and raised concerns over hard drug use and criminality.

New business models are focusing on agri-tourism (meet-the-farmer sessions) and culinary tourism, and events such as cannabis festivals. Tourists can choose from farm tours, “bud and breakfast” hotels, city tours, cannabis festivals, cannabis trails, food, wine and marijuana pairings, “ganja yoga,” and packages that combine accommodation and cannabis experiences.

The potential for cannabis tourism is widespread around the world. More than 19 US states and Washington DC have now legalized recreational cannabis, along with Canada, Mexico, Uruguay, and others. In Europe, Luxembourg allows the consumption of personally cultivated cannabis, while Switzerland is trialing cannabis sales from pharmacies for recreational purposes.

Malaysia and Thailand have made initial steps toward legalizing recreational use. Costa Rica and Morocco have also approved legalization for medicinal purposes.

Risks for Tourists

However, few countries have clarified the legality of cannabis use by tourists with legislation directed at recreational use by residents. This means tourists risk breaking the law unintentionally by interacting with street dealers and police as well as the health implications of consuming real and fake drugs.

There is some evidence cannabis can improve some mental health conditions and provide pain relief. But tourists with pre-existing mental health disorders, for example, may risk their physical and psychological wellbeing. Cannabis-related mental health events, including depression, can also occur among those who have not been diagnosed with mental health issues.

A patchwork of complicated laws and regulations regarding recreational cannabis use by overseas tourists means questions remain about the legality of consumption, the transport of cannabis vape pens overseas as well as issues of insurance cover and health care during and after travel.

While Uruguay is planning to allow consumption by tourists, countries like Portugal, where cannabis has been decriminalized since 2001, still doesn’t allow them to buy it legally. In Spain, cannabis clubs allow visitors to donate to the club instead of purchasing a product. But Spain and other large markets like South Africa are focused on domestic cannabis tourism rather than international visitors.

Few countries have carried out a cost-benefit analysis around legal cannabis and tourism or fully discussed issues of land and water use, police powers, and benefits to local communities. While cannabis tourism can generate tourism and jobs, and reduce the power of organized crime, the goal of sustainable development is threatened by theft, racism, and a market stacked against small local operators who often can not secure funding or insurance. There are also possible increases in pollution and public health and safety concerns.

Mexico and Canada have promised funding for indigenously owned businesses to aid social and racial equality, while New York plans to create a US$200 million (£162 million) public-private fund to support social equity goals. Resident support and continual conversations with communities on how to plan the sustainable development of cannabis tourism should be a vital part of the development of the sector.

While it appears that the COVID pandemic helped stimulate and legitimize the use of marijuana, with dispensaries declared an essential service in parts of the US during the pandemic, tourism could expand and normalize acceptance of its use.

Perceived risks may fade and tourist guilt may dissipate. Cannabis tourism is likely to become just another segment of the holiday industry.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of Michael O’Regan, Senior Lecturer in International Tourism Management, Swansea University.


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Release – ACCO Brands Corporation Announces Participation in Virtual 2022 East Coast Ideas Conference



ACCO Brands Corporation Announces Participation in Virtual 2022 East Coast Ideas Conference

Research, News, and Market Data on ACCO Brands

06/09/2022

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today announced that its management will participate in the virtual 2022 East Coast IDEAS Investor Conference. The company’s virtual presentation will be available on June 16 at 8:00 a.m. EDT.

The presentation will be webcast and will be accessible through the Investor Relations section of 
www.accobrands.com, through the conference website 
www.threepartadvisors.com/east-coast, and through the host’s main website www.IDEASconferences.com. The presentation will be archived for 90 days following the event.

About ACCO Brands
Corporation

ACCO Brands Corporation (NYSE: ACCO) is one of the world’s largest designers, marketers and manufacturers of branded academic, consumer and business products. Our widely recognized brands include Artline®, AT-A-GLANCE®, Barrilito®, Derwent®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, Wilson Jones® and many others. Our products are sold in more than 100 countries around the world. More information about ACCO Brands, the Home of Great Brands Built by Great People, can be found at www.accobrands.com.

View source version on 
businesswire.comhttps://www.businesswire.com/news/home/20220609005383/en/

Neal Fenwick
Investor Relations
(847) 796-4740

Julie McEwan
Media Relations
(937) 974-8162

Source: ACCO Brands Corporation


Consolidation and Vertical Integration Within the Cannabis Industry



Image Credit: Marco Verch (Flickr) Creative Commons License


There’s a Reason the Marijuana Industry’s M&A is Just Beginning

Consolidation within an industry refers to combining companies to form fewer but larger businesses. Vertical integration is the corporate buzzword for a business owning a major part or all or part of its supply chain. Within the marijuana industry, a vertically integrated cannabis company typically means they own from seed to store. That could include cultivation, lab and extraction, product design, manufacturing, and retail sales. This allows the company control of product consistency and allows streamlining. It may also reduce the overall cost of production.

The cannabis industry both in the U.S. and in other countries is experiencing a period of acquisitions and mergers as the benefits of size, and control of supply and quality, are part of the natural growth of any growing industry. While not all states allow complete vertical integration in marijuana products, those that do are experiencing consolidation across the production stages. For investors in this space, it’s helpful to be clear about what stages companies you are considering investing in are involved. And whether your company may potentially be a target for an acquisition or be more likely to acquire another.  

 

Product Stages of Cannabis Vertical Integration

Flower – the cultivation stage is where life begins for the final product. Companies involved in cultivation are becoming more precise with handling everything from germination through the flower stage.

Extraction – During the lab and extraction stage, the cannabis plant goes through processes to remove the cannabinoids for edibles or production of concentrates.

Manufacturing – Companies involved in producing from extracted cannabis make the final product the wholesale or retail customer receives, usually including packaging. If the final product is in plant form, it will be weighed and labeled.

Retail/Medical – Once products are labeled in compliance with relevant laws, products can be shipped to retail or medical shelves.

Shipping or delivery is not generally viewed as a product stage.

Vertical Integration Laws

In some cannabis-legal states, vertical integration is mandated because it allows for better oversight of the seed-to-sale process. State regulators claim it helps reduce retail facilities from purchasing black market products since businesses are required to produce, manufacture and sell their own products. It has also been argued it helps address federal tax issues since cannabis businesses can’t deduct regular business expenses. Plus, vertically integrated businesses may be able to overlap costs like rent and utilities.

While some states require and others ban vertical integration of cannabis products, a handful of states leave the choice up to the businesses.

Examples of Consolidating Cannabis Companies

In a C-Suite interview recorded in late May 2022, Justin Dye, CEO of Schwazze (SHWZ) sat down with Noble Capital Markets, Senior Equity Analyst Joe Gomes to discuss the company’s overall business strategies and their appetite for M&A. The states Schwazze operates in allow vertical integration,

Mr. Dye and Mr. Gomes discuss how Schwazze currently fills 50% of its own production needs through in-house cultivation, and also the benefits of working with outside suppliers. The company has its own extraction labs and owns 33 stores. Schwazze has been expanding aggressively in the states it serves, and recently (June 1) closed a transaction on a large cultivation facility and dispensary in Colorado. The C-Suite interview, available here, provides insights on the benefits of being a vertically integrated company in this space. The video also helps investors understand Schwazze’s “House of Brands” concept. Schwazze operates in Colorado and New Mexico.

A California-focused retail consolidator and the owner of Mankind Dispensary is GABY (GABLF) Mankind is one of the oldest licensed dispensaries in California. GABY, founded by CEO Margot Micallef is a pioneer in the industry with a multi-vertical retail foundation, and a strong management team with experience in retail, consolidation, and cannabis. Mankind is a well-known, and highly respected dispensary with deep roots in the California cannabis community operating in San Diego, California. GABY is poised to grow its retail both organically and through acquisition. The company curates and sells a diverse portfolio of products. Hear what GABY CEO said in April in her presentation at NobleCon18, available
here
. The company distributes its proprietary brands through its wholly-owned subsidiary, GABY Manufacturing. GABY reported first-quarter results today (June 6), Read what Senior Research Analyst Joe Gomes wrote in a research note about the state of the industry and GABY’s results, get
the report
.

Take Away

Consolidation within the cannabis industry is strong; mergers and acquisitions in the U.S. last year totaled 209 with a total value of $10.1 billion. Some of the M&A which is still running at near last year’s pace is to provide full vertical integration or improved integration within’ the firm’s specialties.

Ongoing integration is of interest to investors as there are cost savings and improvements that can be had by controlling the production process to lower cost, improve flexibility in the production processes, retain strict consistency, and quickly adjust to changes in demand for particular strains. 

Public companies that become acquisition targets can deliver outsized returns to investors. Research posted on Channelchek of Small and Microcap stocks may help identify the strengths and attractiveness of companies involved in the cannabis industry and others covered by Noble Capital Markets veteran equity analysts. Sign-up today for emails and access.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://www.gabyinc.com/

https://mjbizdaily.com/marijuana-mergers-acquisitions-sizzled-in-2021-and-poised-for-a-hot-2022/

https://jcannabisresearch.biomedcentral.com/articles/10.1186/s42238-021-00087-9

https://vangst.com/blog/vertical-integration-cannabis

https://www.cannabisbusinesstimes.com/article/hort-how-to-grow-for-genetic-fit-cannabis-varieties-indoor-greenhouse/

https://mjbizdaily.com/marijuana-mergers-acquisitions-sizzled-in-2021-and-poised-for-a-hot-2022/

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GABY (GABLF) – Reports First Quarter 2022 Results

Monday, June 06, 2022

GABY (GABLF)
Reports First Quarter 2022 Results

GABY Inc. is a California-focused retail consolidator and the owner of Mankind Dispensary, one of the oldest licensed dispensaries in California. Mankind is a well-known, and highly respected dispensary with deep roots in the California cannabis community operating in San Diego, California. GABY curates and sells a diverse portfolio of products, including its own proprietary brands, Lulu’s™ and Kind Republic™ through Mankind, manufactures Kind Republic, and distributes all its proprietary brands through its wholly owned subsidiary, GABY Manufacturing. A pioneer in the industry with a multi-vertical retail foundation, and a strong management team with experience in retail, consolidation, and cannabis, GABY is poised to­­­ grow its retail operations both organically and through acquisition.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q22 Results. GABY reported first quarter revenue of $7.3 million (all figures in CAD$), up from $3.4 million reported last year, driven by the acquisition of Mankind, but down from the $8.2 million in 4Q21. We had estimated revenue of $8.5 million. Variable gross margin for the quarter improved to 47.6% compared to our 47.5% projection. GABY recorded adjusted EBITDA of $0.5 million in the quarter, compared to $0.86 million in 4Q21. Net income for the quarter totaled $1.5 million, or $0.00 per share, driven by one-time items, versus a net loss of $3.9 million, or $0.01 per share, in 4Q21.

Return to Normalcy, Challenging Market Impact Results. The sequential decline in revenue was driven by a return to post-COVID normalcy in cannabis sales and a challenging California market, as we have highlighted previously. Revenues are now back close to pre-COVID levels. …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Release – Schwazze Closes Acquisition of Assets of Urban Health & Wellness, Inc.



Schwazze Closes Acquisition of Assets of Urban Health & Wellness, Inc.

Research, News, and Market Data on Schwazze


DENVER, June 1, 2022 /CNW/ – Schwazze, (OTCQX: SHWZ) (NEO: SHWZ) (“Schwazze” or the “Company”), announced today that it closed the transaction to acquire substantially all the assets of Urban Health & Wellness, Inc. (“Urban”).  The transaction includes the adult use Urban Dispensary, located at West 38th Avenue and Clay Street, in Denver’s vibrant Highlands neighborhood as well as a 7,200 square foot indoor cultivation facility (2,700 square feet of canopy) located in Denver, Colorado. This purchase continues Schwazze’s aggressive expansion in Colorado and brings the Company’s total number of Colorado dispensaries to 23 and grow facilities to four. The acquired assets included state and local retail marijuana and marijuana cultivation licenses supporting the adult use dispensary and indoor cultivation facility acquired in the transaction.

 

“Urban’s strategically located dispensary
and grow facility will be excellent additions to our expanding portfolio of
assets in Colorado.  Delivering our brands and our excellent customer
service into new neighborhoods is a Schwazze hallmark as we continue to go deep
in Colorado and New Mexico.” 
said Nirup Krishnamurthy, Schwazze’s COO.    

The consideration for the acquisition was US$3.2 million, which was paid $1.3M in cash and $1.9M in Company common stock upon closing, of which $288,000 of this common stock consideration was held back by the Company for indemnification claims. The common stock consideration was  split 65% to 35% between the two equityholders of Urban.   At closing, each equityholder that received common stock consideration was required to execute a standard lock-up agreement providing for limitations on resale of the stock consideration received.  There were no finder’s fees or similar arrangements in connection with the transaction.

Since April 2020, Schwazze has acquired or announced the planned acquisition of 33 cannabis dispensaries as well as seven cultivation facilities and two manufacturing assets in Colorado and New Mexico. In May 2021, Schwazze announced its BioSciences division and in August 2021, it commenced home delivery services in Colorado.

About Schwazze
Schwazze (OTCQX:SHWZ, NEO:SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.  The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition.  Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes.  The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector.  Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices.  Medicine Man Technologies, Inc. was Schwazze’s former operating trade name.  The corporate entity continues to be named Medicine Man Technologies, Inc.

Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

Forward-Looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “plan,” “will,” “may,”, “predicts,” or similar words. Forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and outside the state, (vii) our ability to consummate the acquisition described in this press release or to identify and consummate future acquisitions that meet our criteria, (viii) our ability to successfully integrate acquired businesses and realize synergies therefrom, (ix) the ongoing COVID-19 pandemic, * the timing and extent of governmental stimulus programs, (xi) the uncertainty in the application of federal, state and local laws to our business, and any changes in such laws, and * out ability to satisfy the closing conditions for the private finding described in this press release. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.

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SOURCE Medicine Man Technologies, Inc.


FAT Brands Inc. (FAT) – A Tuck-in Acquisition to Improve Factory Utilization and Expand Market Share

Thursday, May 26, 2022

FAT Brands Inc. (FAT)
A Tuck-in Acquisition to Improve Factory Utilization and Expand Market Share

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Acquisition. Yesterday, FAT Brands announced that it agreed to acquire the franchised chain of stores known as Nestlé Toll House Café by Chip from Crest Foods, Inc. While the acquisition increases the Company’s presence in the cookie segment, we believe the driving force to be the opportunity to increase the capacity utilization of the manufacturing business, which currently manufactures cookie dough and pretzel mix for FAT Brands, as well as conducts distribution services for other products used in those operations. Recall, the factory is currently operating at roughly one-third of capacity. At full capacity, the factory could more than double its EBITDA contribution.

Who, and What, Is Nestlé Toll House Café by Chip from Crest Foods, Inc.? While terms of the acquisition were not released, Nestle Toll House Café currently franchises approximately 85 cafés across the U.S., with a concentration in Texas. The very first Nestle Toll House Café by Chip opened in August 2000, in Frisco, Texas and the brand touches over 60 million customers per year. Cafes are commonly found in shopping malls or shopping centers….



This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.