|Shares Out. (in M):||20||P/E||13||12|
|Market Cap (in $M):||531||P/FCF||0||0|
|Net Debt (in $M):||200||EBIT||68||73|
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Thesis: The upheaval in vaping has taken the buzz out of TPB (and accordingly, SDI) and provided the market with an inexpensive tobacco stock and a free option on their NewGen (Vaping/CBD) segment, which includes vaping distribution; CBD; and a proprietary pod vaping system. The technicals here are pretty obvious: this traded up as a fast-money, public-market way to play vaping and CBD. And now the story is clouded, and fast money is dumping without regard to valuation.
Since the late 1990s/early '00s routinely in North America with the commercialization of cheap vaporizors (if you are aware of this type of thing.... think "Vapor Brothers" or "vapor Doc"; these were veeerrrryyy popular in 2002-2003)
With SB420 in CA, and the later CA AG memo on the definition of "marijuana" under SB420 that included concentrates (and excluded edibles) under the umbrella of weight standards and the accompanying explosion of solvent extracts, vaporization on very high THC content extracts became incredibly popular, basically everywhere, but certainly in CA.
No epidemics of severe hospitalizations....
Anecdotal stories of emergency room visits from people smoking/vaporizing "oil"... yes. But anecdotes. Handfulls of people over decades, not hundreds in a matter of months.
The problem is the advent of Cartridge vaporizers.
They require dilution of the cannabis extract (which is otherwise as thick as frozen molasses) to function properly.
Vitamin E has been used as a "supposed" safe solvent/stabilizer/suspension producing additive in the supplement and neutraceutical world for non polar/lipophilic molecules that people eat (example: conezyme Q10 suspended in either vitamin E and/or fish oil, or pattented liposome encapsulation)
Should we be surprised this was the go to?
No. These companies rarely have full blown scientists as CTO/CSOs informing them... that....
Vaporizing Vitamin E is like inhaling the fumes from a boiling hot pan of cooking oil."
Resolution of vaping issues that avoid worst case that is priced in currently.
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