Special Report

Recently, KeyStone analysts attended the 34th Annual ROTH Conference in California which included just under 500 publicly traded companies. Prior to the event, our analysts reviewed each attending company and screened the group with our growth-at-a-reasonable-price (GARP) model. Approximately 24 met a threshold of our model and we scheduled in person interviews with management teams from each company. Within this report we have provided statistical analysis on each company as well as summary Monitor reports on a number of companies we are monitoring from the event and Company Update reports on companies that we interviewed and are currently in coverage. While the research did not produce any new recommendations, we uncovered a number of interesting businesses that may enter our BUY coverage over the course of the next 12-months.

KeyStone has reviewed the public North American Cannabis market since inception. At legalization in Canada, we rejected all candidates as uninvestable due to a lack of profitability, high valuations and a significant production capacity overbuild. Over the ensuing year, Cannabis stocks across the board plummeted. In late 2019, a very select number of U.S. operating Cannabis stocks had emerged into profitability and one name finally met our criteria. The stock was recommended at $15.99 and reiterated less than a month later at $13.35 as a SPEC BUY. We have since added two smaller Cannabis operators in the U.S. market.  We continued to monitor players with operations primarily in the Canadian market but broadly speaking the operational struggles continued. Within this report we conduct statistical analysis on 31 Canadian Cannabis Operators, break down 8-10 of the businesses in more detail and make 3 recommendations in the U.S. Cannabis space.