Cansortium (OTC: CNTMF) (CSE: TIUM.U)
Cansortium, Inc.
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Cansortium is a multi-state operator of cannabis cultivation and dispensary licenses in the USA. They have large presences in FL, PA, MI, and TX. Their main brand is Fluent. They are headquartered in Miami, Florida.
Is CNTMF a buy opportunity?
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Cansortium, Inc. Fundamental Analysis
Profile
HQ: Miami, FL, USA
Founded: 2018
Symbol: CNTMF (OTC), TIUM.U (CSE)
Focus: Strong
Cansortium is a cultivator of cannabis with manufacturing facilities for concentrate and infused products along with dispensary locations for distribution and retail. Their largest and most known brand is Fluent.
Size: Neutral
Market Cap: US $93.1 million
Enterprise Value: $165.1 million
# of employees: 350
Markets: Strong
Secondary: Michigan, Texas, Pennsylvania
Subsidiaries, Interests:
Majority: Cansortium FL LLC, Cansortium PN LLC, Spirit Lake Rd Nursery, Cansortium Health Partners, Cansortium Holdings
Operations: Neutral
Cultivation:
Present Productions: Cultivation sites in Michigan, Texas, and Florida. Their new 43,000 sqft facility in Sweetwater, FL just received approval and opened.
Future production: They are concentrating on their FL operations now with focus on increasing dispensary locations.
Distribution:
Direct sales: Yes, and home delivery in Texas and Florida
Store networks: 3 dispensaries in PA open soon, 26 in Florida
Supply agreements: None
Integration/Diversification:
Vertically integrated: Yes
Horizontally diversified: No
Financials: Neutral
Revenue (ttm): $60.57 million
Outstanding shares (diluted): 126.2 million
Valuation: Neutral
Current share price: US $0.743
52 week high/low: $0.549-1.35
Price to Sales: 3.31
EV/Revenue: 2.88
Price/book: 3.25
Financing: Weak
They cancelled convertible notes by converting promissory notes issued in Feb. 2019 for $10 million into common shares and redeeming $5 million of the notes with cash. They did this with 8.4 million common shares at $0.60. They have $26 million of total cash with almost $77 million of total debt.
Risks: High
The risks of investing in any cannabis company are currently high given the newness of the market. The risks of investing in this company are very high, given their poor financial health, focus on only one market, and tight revenue margins.
Cansortium Investor Presentation
Cansortium Technical Analysis
Should I Buy Cansortium Stock?
Follow Stephen Goldman as he evaluates Cansortium with triple moving averages, the CCI, and the Awesome Oscillator.
Is there a buy opportunity with CNTMF?
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Bottom Line: Should I Buy Cansortium Stock?
Recommendation: Strong
Cansortium is a vertically operated cannabis company with operations focusing in Florida but with minor operations in PA, MI, and TX. They previously had operations in Puerto Rico, Canada, and Colombia but these were all recently discontinued after extremely unhealthy financials were the result.
They have done a lot of fundraising through issuing shares. In April 2021 they issued 11.8 million shares, in one offering with another 5.2 million in another. They also secured a loan for $71 million in April 2021 with interest at 13% per annum, payable quarterly. They’ve done this because they are not profitable.
Q1 2020 net losses were almost $14 million. The good news is that Q1 2021 net losses were only $5 million, a significant improvement. With the divesture of their international operations, and significant debt restructuring, they do have the opportunity to get expenses under control and get closer to profitability.
We like the strong presence they have in Florida, one of the largest and most profitable cannabis markets in the USA. We also like the stock price does have some value built in, given P/S, Price/Book, and EV/Revenue are all less than 3.50. The stock does have some room to run as long as the management team can continue cutting costs and increasing revenue. For all these reasons we rate CNTMF as Strong .