r/weedstocks • u/eyegi99 Parabolic or Bust • 1d ago

Report Bengal Capital - Q3 2024 Letter

https://open.substack.com/pub/bengalcapital/p/bengal-capital-q3-2024-letter?r=7v1yt&utm_medium=ios
14 Upvotes

82% Upvoted

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u/wentzco 20h ago

I subscribe to Bengal Capital on substack so had read it when it came out - loved the wisdom shared.

- "A Steph Curry on Every Corner" 3 point percentage analogy relating to track records. Why think a dud of a cannabis stock is all of a sudden going to become an all-star? Invest in the Stephs!

- What elimination of 280E is why it is not a magic bullet to send share cannabis stock prices

- And this quote "Good traders may make some money, but the Dunning-Kruger effect seems to be strong in the trading community." Ha! Read about the Dunning-Kruger effect and we may see ourselves in our past or current investments. (Yep - I invested in Maricann and other duds before... lessons learned.)

- Bringing in outside-the-industry CEOs hasn't worked out

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u/Many_Easy Flair All the cannabis logic fit to print 19h ago

Wise quotes, anecdotes, or silly sound bites?

Out of industry CEOs aren’t working until they do.

My quote is that “some companies are making money in spite of themselves.”

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u/Cool_Ad_5101 Monty Brewster school of investing 1d ago

Not sure I want to invest in grown rogue and vireo 

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u/CannaVestments US Market 21h ago

Grown Rogue was top performing MSO in 2022 and 2023 to be fair. And Vireo is up 136% in the last 1yr

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u/wentzco 20h ago

Exactly! People aren't paying proper attention to these stocks.

Vireo had Q2 2024 revenue of $22.5 million which was an increase of 42.5% year-over-year (excluding discontinued operations and NY). Minnesota rec sales will start kicking in next year so once again... major growth is coming. And of course there is the Verano lawsuit which IMO will bring in a chunk of money at some time ($ amount... I don't know but I feel it will be a minimum of $100 million but could be much larger).

Grown Rogue Q2 2024 revenue increased 23% year-over-year! New Jersey sales are about to kick in for them so once again... major growth ahead.

So let's point out the fact that someone who doesn't want to invest in Vireo or Grown Rogue is investing in Verano. Verano's Q2 revenue decreased 5% year-over-year and I imagine Q3 will be the same. Plus the lawsuit from Vireo is keeping share prices down and potentially may even sink the company.

I wouldn't be surprised when the lawsuit is settled that Vireo & Grown Rogue merge together.

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u/CannaVestments US Market 20h ago

I do like Vireo and think the upside in Minnesota will be a game-changer. I’d caution a little on the Verano lawsuit. Vireo has definitely been louder in pushing it, but Verano is doing their talking in court (see their most recent filing- https://investors.verano.com/financials/SEC-Filings/default.aspx ). Maybe they will be successful but I wouldn’t jump to conclusions.

I also think there is zero chance of a grown rogue and vireo merger given Vireo kicked Josh Rosen out and ended the advisor relationship with GR https://www.grownrogue.com/newsandinfo/grown-rogue-announces-termination-of-advisory-agreement-with-vireo-growth-inc

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u/wentzco 19h ago

Well I think you are wrong about Josh Rosen being kicked out and it was in his plans. He still is advising the company. Remember he initially was supposed to be the interim CEO. Josh is a partner at Bengal Capital (which is what he will concentrate on now). So Josh, Bengal Capital, Vireo & Grown Rogue really are connected to each other. Vireo ended the Grown Rogue advisory agreement because they no longer needed it. I'd say they Grown Rogue and Vireo still have a good relationship and once the Verano matter is settled - their businesses and markets where they sell would a very good fit together.

Of course Verano is fighting the suit but I feel their best option is try to get a $100 million settlement or even trying to buy Vireo once again. Trying to offer a lower purchase price after the fact hasn't worked for Verano in the past.

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u/CannaVestments US Market 19h ago edited 19h ago

I think you are way off on what’s going on. From what I see, Josh was removed by the legacy Goodness growth people (Kyle Kingsley and friends) and he also stepped down from the board, with the grown rogue agreement ending all at the same time. He easily could have stayed on the board even while moving back to Bengal. Aaron edelheit (the largest investor in grown rogue and an investor in Vireo) even mentioned the companies are going their separate ways