There are a few things happening here, IMO:
1) Lack of legal storefronts is THE major concern. CA has a similar number of stores as CO; yet, its market is 6 times the size. CA locals will buy wherever it is convenient and if a municipality does not allow stores, locals will not go out of their way to a town with legal stores if they have a black market connection. More legal stores => good for SIGO and bad news for black market. Black market does not have the industrialization to create innovative products.
2) With the above condition, growers rightfully so are sounding the alarm, which gets potential new entrants thinking twice about entering the market => good for SIGO
3) SIGO seems to have done a good job of being conservative and maintaining a small operational footprint. SIGO haters used to call out SIGO's cost-saving measures saying their operations are third-rate and would compare to large, heavily capitalized players with cutting edge (expensive) technology, etc. However, being BIG in CA right now may not be a good thing. BIG operations equals BIG costs. I would be more concerned if SIGO had gone ahead and spent a big chunk of their financing on building the second greenhouse. They seem to have stayed small and nimble, which could be a benefit for us later.
4) Finally, SIGO haters & stock manipulators appear to be creating, 'out of thin air,' a short catalyst (May 17) around a potential visit. Same players leading the way with other tools feeding the fear by providing links and stressing the new 52-week low. They all want the share price to go down so their $70 can buy more shares. Not surprised with who is feeding this fear.
There is certainly a lot of risk around our SIGO investment, but that risk is not so much SIGO-related, as it is market related. My hope is that SIGO can stay afloat with 'minimally-viable' operations, while also streamlining their oil operations, increase quality, reduce risk of bad harvests that don't pass testing, and keep Building Relationships with other key license holders. The 2017 10-K mentioned SIGO focusing on oil operations since that has the highest profit margins. I'm okay if SIGO's flowers never see a storefront and are all converted to cannabis oil.
1) Lack of legal storefronts is THE major concern. CA has a similar number of stores as CO; yet, its market is 6 times the size. CA locals will buy wherever it is convenient and if a municipality does not allow stores, locals will not go out of their way to a town with legal stores if they have a black market connection. More legal stores => good for SIGO and bad news for black market. Black market does not have the industrialization to create innovative products.
2) With the above condition, growers rightfully so are sounding the alarm, which gets potential new entrants thinking twice about entering the market => good for SIGO
3) SIGO seems to have done a good job of being conservative and maintaining a small operational footprint. SIGO haters used to call out SIGO's cost-saving measures saying their operations are third-rate and would compare to large, heavily capitalized players with cutting edge (expensive) technology, etc. However, being BIG in CA right now may not be a good thing. BIG operations equals BIG costs. I would be more concerned if SIGO had gone ahead and spent a big chunk of their financing on building the second greenhouse. They seem to have stayed small and nimble, which could be a benefit for us later.
4) Finally, SIGO haters & stock manipulators appear to be creating, 'out of thin air,' a short catalyst (May 17) around a potential visit. Same players leading the way with other tools feeding the fear by providing links and stressing the new 52-week low. They all want the share price to go down so their $70 can buy more shares. Not surprised with who is feeding this fear.
There is certainly a lot of risk around our SIGO investment, but that risk is not so much SIGO-related, as it is market related. My hope is that SIGO can stay afloat with 'minimally-viable' operations, while also streamlining their oil operations, increase quality, reduce risk of bad harvests that don't pass testing, and keep Building Relationships with other key license holders. The 2017 10-K mentioned SIGO focusing on oil operations since that has the highest profit margins. I'm okay if SIGO's flowers never see a storefront and are all converted to cannabis oil.
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