TGOD CN

The Green Organic Dutchman Holdings Ltd

Healthcare, Consumer, Industrial/Transportation


Presented:09/18/2018
Price:CA$7.71
Cap:$1.53B
Current Price:CA$0.03
Cap:$0.00B

Presented

Date09/18/2018
PriceCA$7.71
Market Cap$1.53B
Ent Value$0.85B
P/E RatioN/A
Book ValueCA$1.30
Div Yield0%
Shares O/S247.90M
Ave Daily Vol1,468,243
Short IntN/A

Current

PriceCA$0.03
Market Cap$0.00B
Green Organic Dutchman Holdings Ltd. produces farm grown and pharma grade organic cannabis. It is wholly owned subsidiary of TGOD. The company operates through the production of medical cannabis. Green Organic Dutchman was founded on November 16, 2016 and is headquartered in Mississauga, Canada.

Publicly traded companies mentioned herein: Aurora Cannabis Inc (ACB CN; ACBFF), Cronos Group (CRON), Green Organic Dutchman Holdings Ltd/The (TGOD CN, TGODF)

Highlights

The presenter is short shares of The Green Organic Dutchman (TGOD) and feels it has an overly ambitious international business plan to expand to 12 different countries on three continents as it is still pre-production/ pre-revenue yet has a ~C$2B market cap. The research and development company is a late arrival to the industry and has no provincial agreements in place, and with just one supply agreement (with Aurora), it is likely to be just a wholesaler. The presenter notes that with industry supply projected to outstrip demand by 3x, pricing should fall over the intermediate term. If TGOD achieves a pro rata utilization equal to ⅓ of its planned supply (195k kgs), or 64 kgs, at a wholesale price of C$2.25/gram and a projected retail price of C$4 - 5/gram, it would generate C$150MM in revenue (vs C$440MM of revenue at 100% capacity). At 15x projected future revenue, and assuming a 10% FCF margin and 20x multiple, he sees the stock worth just C$1 (versus C$7.75 on 9/18). If it achieves 100% capacity utilization and the same assumptions are used, he gets to C$2.67/share of value.

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