Advanced Cannabis Solutions Inc: Fill & Download for Free

First of all, I believe you are probably looking to invest in order to take advantage of the large recreational pot smokers. I’m not going to lecture you on the risks (pot is illegal, ect). I’m also not going to lecture you on portfolio construction and active management. I’m going to analyze some companies for you, so here it goes:This is how I analyze companies:Business Strategy: How do they make money? Why are they special?Current Fundamentals: How much money have they made? How much money do they make each year? Is this growing or falling? How much do they own? How much do they owe? Is this growing or falling?Technical Analysis: What has their stock been doing recently? What’s the trend? What has it done in the past? What is it likely to do in the future?Is the Return Worth The Risk? How much money could I make?This may not be the best way or even the smartest way, but this is my way. Now let’s see how this works with they extremely young marijuana industry.Business StrategySince it’s illegal (on the federal level) to grow and sell marijuana (in the US), how do you take advantage of marijuana legalization?There seems to be two large groups of companies (and a few smaller random ideas):Pharmaceuticals: Use cannabis to help fight disease, but some of these companies create products such as edibles.Suppliers To Growers: Create equipment that growers of marijuana will/do need.RandomPharmaceuticalsCBD Pharmaceuticals & Consumer Cannabidiol Products | CV Sciences (Ticker:CVSI)GWPharma - Welcome (Ticker: GWPH), and Cannabis Sativa (CBDS) are three I’ve looked at in this area.CVSI has two divisions: pharmaceuticals and consumer products. Pharmaceutical Division is developing synthetically‐formulated cannabidiol‐based medicine, pursuing the approval of the U.S. Food and Drug Administration (FDA). Consumer Division is engaged in the development, manufacturing, marketing and distribution of consumer products containing plant-based cannabidiol (CBD), which is refined into its portfolio brands: PlusCBD Oil and Purified Liquid (vape eliquids). Their pharmaceutical is a chewing gum that is cannabis based. They could be the Nicorette of Marijuana and with the growth of e-cigs, they could be big there too. What makes them special: Their Purified Liquids vape juice. 7/10GWPH is the marijuana pharmaceutical company. They have been around since 1998. With one successful product already, Sativex, and 6 more in the pipeline, they are legimate. They make money just like every other pharmaceutical company, they research drugs, get these drugs approved, sell the drugs to help fight disease. The only thing that makes them special is the fact that they are established with legitimate scientists. 7/10CBDS is a mess of a business model. It owns five subsidiaries: three “pharmaceuticals”, a customer rewards card, and a website (CBDS.com: All Things CBD). The pharmaceuticals are facial creams, balms, and water (yes drinkable water) that is infused with cannabis. The water kinda sounds interesting: CBD Water by Wild Earth Naturalsbut most of this is more of a “natural products” play than a “marijuana is legal” play. They also offer a “benefits card” that helps with prescription products some how. The website isn’t really live and it’s trying to be the Wikipedia of pot…..which doesn’t seem like a good business idea. 3/10SuppliersIf you can’t grow it, supply those who do. That’s the business model behind a lot of companies currently in the public markets. American Cannabis Co (AMMJ), General Cannabis (CANN), Marijuana Packaging & Supplies (KSHB), Surna | Water-Chilled Climate Control Systems (SRNA), and GrowBlox Sciences OTCQB: GBLX are the ones I’ve found in this space.AMMJ provides end-to-end consulting and product solutions for the medical, adult use and low-THC regulated cannabis markets both nationally and internationally. They tell people who actually work in the marijuana industry how to start, grow, protect, and sell their product. They sell everything from soil to retail marketing. With some big name clients (like OrganiGram), they seem legit. However, they also seem like goobers. If you look up the owners and senior management, they just seem like a bunch of ex-ski instructor hippies that were good at growing weed in college and somehow have turned it into a business. Maybe it’s working though. They have a lot of stuff. Solutions - American Cannabis Company including weed “fatheads”. Fuck. Idk. Their differentiation is only their experience, which I’m not big on. 5/10CANN pretty much does the exact same thing. They help new and established growers and sellers stream-line their business through their various products. They have a greenhouse consultant, security firm, brand development, and apparel line. The only one that sees unique to me is the Greenhouse consultant. Security is security no matter what you are guarding. Brand development is brand development no matter what you are selling. Pot heads are already wearing clothes and have their brands developed already (however, their apparel line does have 3,000+ likes on facebook: https://www.facebook.com/chieftonsupply/ ) They have management that has done shit before and a semi-independent board of directors. Their value proposition is in their experience, which I do believe in, but I feel like they should eliminate some of their services and specialize. Maybe they will after marijuana is legal? 6/10KSHB is a one-stop shop for any business looking to get started in the legal cannabis trade. It has built itself a first-mover advantage by providing cannabis enterprises across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law. They create packaging to store, ship, and safely secure marijuana. They also sell stuff you can smoke it out of too. It is an interesting play because it can be used by both legal/illegal distributors, users, and other suppliers. They have a huge following and are featured on CNBC and INC. With locations in CA, CO, and WA these guys are legit. Their special because they were the first ones to start this and it’s proved to be big. 9/10SRNA engineers and manufactures innovative technology and products that address the energy and resource intensive nature of indoor cultivation. Surna’s current focus lies in supplying industrial solutions to commercial indoor cannabis cultivation facilities. They make indoor greenhouses for marijuana. This is an industry that will grow exponentially when marijuana is legalized. Growing weed outside is cheaper, but also harder to secure and control. While weed may one day be an outdoor cash crop like cotton, it will start indoors. They are unique because they use water-chilled climate control systems. Instead of having huge electric bills to run the AC in these greenhouses, they use water. This technology may have the potential to be used in any commercial buildings. Products | Surna is an easy way to see how they are special. 8/10GBLX creates a few things: turn-key marijuana (they grow it, you buy it wholesale), high tech “grow boxes” (you use their tech to grow it yourself), and a pharmaceutical line (skin creams and such). I’m not huge on their pharmaceutical line, because it’s an overplayed space. Where GBLX wins is in their science. They have ammassed a huge amount of information on how to grow the best pot (starting at the seed Cultivation Science and moving to the end-user phase intellectual Property & Regulatory). These guys are balls smart. They have a lot of ways to distribute their our products for revenue. 9/10GrowingI’ve found two companies that are “vertically integrated” to grow the marijuana (usually in Canada) and sell in America through their subsidiaries: OrganiGram - Products (Ticker: OGRMF) and Terra Tech Corp. (TRTC). There are more out there, but they all fall under one of these business models (and I like these two the best).OGRMF is technically a Canadian company (where it is legal to grow for medical purposes). They grow the weed and ship it to you. However, I think (I can’t seem to find anywhere that tells me it does or doesn’t) they only ship to Canadians (and you have to have your medical prescription). It’s the 1–800 Contacts of the medical marijuana world. I bet they would be more than happy to ship to US citizens once pot was federally legal (and they could confirm your birth date). Probably not a bad business model at all. Special because they ship it directly to you. 8/10TRTC is an American company that: “Through multiple subsidiaries…. are committed to cultivating and providing the highest quality medical cannabis consistently delivered to qualified, registered medical marijuana establishments in the safest and most secure manner. Our commitment to advancing research within the medical cannabis industry will lead our approach in cultivating and cross-breeding strains of medical cannabis that treat a variety of ailments.” They are a grow, package, and deliver company. They grow through their MediFarm brand. They package their brands as either IVXX or EDIBLE GARDEN. They have multiple weed shops through their brand called Blüm (in CA & NV). I’m sure they would be happy to open their doors to non-medical patients if it was legal. Special because of their multiple brands and locations in CA & NV. 9/10Social MediaMassRoots (MSRT) is a social media just for pot smokers…….With more than 900,000 users, MassRoots is one of the largest and fastest growing platforms for cannabis enthusiasts. I don’t know why someone would use a pot specific social media over a generic social media site. They make money by selling ads. I don’t like it. 2/10TestingDigipath Inc. - Digipath Inc. (DIGP) tests marijuana. Just like any drug, food, beverage, or anything, it must be tested to ensure it is not harmful. DIGP is doing that and from what I’ve found, they are the only one. If weed becomes legal, FDA and other government entities will need standards. Then they will need a way to measure to these standards. DIGP and it’s equipment will be the answer. Dr. Cindy Orser, Ph.D., a 20-year biotech and diagnostic industry veteran, leads these efforts on behalf of Digipath, serving as Chief Science Officer and assists cannabis providers and regulatory agencies, as well as working in academia in several key roles. In addition to her work, she holds 18 patents and authored 41 peer-reviewed publications. Yea. They are legit. 8/10FundamentalsWhen looking into a company’s financial statements, I first look for safety. Are they going to go bankrupt soon? Can they pay their debts? What would it be worth if they were to go bankrupt tomorrow?The Altman Z-score is a terrific way to judge bankruptcy potential, but that would take me a long time, so I’m not going to do calculate that. Instead, I’m using the quick ratio (to judge liquidity) and the debt/equity ratio (to judge solvency). I’ll be using price to book to estimate bottom line value.The next thing I do is try and figure out where the market has priced their growth (aka valuation). I’m using price-to-sales to figure out this (because so many of them have a net loss).Finally, I’ll look at cash flow from operations to see if they are profitable.We are going to look at everyone we gave a 6/10 or higher on the business strategy: CVSI, GWPH, CANN, KSHB, GBLX, OGRMF, TRTC, DIGP.LiquidityCVSI is fine with quick ratio around 1. 6/10GWPH is not using enough of it’s cash. It has $254 Million in cash. Use it. Obviously, it can pay it’s debts. 8/10CANN is in trouble. 2/10KSHB is getting close to trouble with barely over .5 quick ratio. 5/10GBLX is in trouble 2/10OGRMF is in the perfect sweet spot. 10/10TRTC is kinda sketch but not in trouble. 4/10DIGP is in the perfect sweet spot. 10/10SolvencyHow leveraged do you want to be is always a hard question to answer. Average, if you avoid the negatives, is 0.33. Anything under that is conservative. Anything above that is aggressive.CVSI is good 8/10GWPH is good 8/10CANN has negative stockholders equity. It means the company not only has been losing money, but has lost more money than its owners put into the company in the first place. Start-ups commonly lose money for a while as they lay the groundwork for success. Once a company breaks into the black, it can begin to erase the deficit. We are going to assume this is an industry issue (since GBLX also has negative stockholders equity) for the older companies. Possibly they believed marijuana was going to be legalized earlier and started their companies a little bit too early, suffering losses since they opened their doors. CANN started in 2011. 2/10KSHB is good 8/10GBLX has negative stockholders equity. Opened their doors in 2004. 2/10OGRMF is about double the average, so they are taking more risk (or growing faster) using debt. Could be good, could be bad. Since they are the only company that has a positive cash flow from operations, I’m going to say it’s good. 10/10TRTC is good 8/10DIGP is surprisingly low. Maybe they aren’t growing enough? 6/10ValuationCVSI has a competitive valuation by both Price/Book and Price/Sales. 9/10GWPH has a somewhat high Price/Book but an extremely high Price/Sales. 4/10CANN has a relatively high valuation on both fronts. 4/10KSHB has a high valuation. 4/10GBLX has a normal Price/Book but has ZERO REVENUES. That’s sketch. 2/10OGRMF has a solid Price/Book but has a high Price/Sales. 6/10TRTC is competitive in both valuations. 7/10DIGP is competitive in both. 7/10ProfitabilityEveryone has a negative cash flow EXCEPT for OGRMF (maybe because of their Canadian clients?). It’s possible that OGRMF is what the future profitability looks like for the US based companies. OGRMF gets 9/10GWPH and TRTC have such a deficit, it scares me. They get 2/10. Everyone else gets 5/10.Overall, OGRMF has the highest fundamental value.CVSI & DIGP have the second highest fundamental value.GWPH, KSHB, & TRTC are the third teir.CANN & GBLX aren’t pretty from a fundamental standpoint. This doesn’t mean they aren’t candidates for investments, it just means they hold more risk than the others.TechnicalIt’s always a good idea to look at the current trend of prices, historical highs,and historical lows. Also, given that we had a similar situation back in 2014 (the legalization of marijuana), it’s not a bad idea to see what the stock did on that news. I’m basing my ratings off the possibility of having a huge run-up if pot is legalized during the 2016 elections/votes.OGRMF has been ripping up the last 3 months. People are buying. Going from around $0.75 to $1.25. It was not around when the last marijuana bull rush came. It’s historical high was $2.15. It seems to spike once a month around the 8th. Probably just random. Looks like sentiment is positive. 7/10CVSI has been falling the last three months with a big drop this last month. It’s fallen over the last year and the last three years. HOWEVER, it had a high of $180 back in 2014 during the last marijuana bull rush. It jumped from $12 in March of 2013 to $180 in February of 2014. Sentiment lately has been negative, but it has a history of massively positive overbuying during big news events. 6/10DIGP has been relatively flat over the last three months. However, it’s been up slightly so far this year. It was around during 2014 and jumped from $2.29 in July of 2014 to $29.50 later that month. Flat sentiment lately, but history of big jumps. 7/10GWPH has ripped up during this past month. Before that it was relatively flat. It was around during 2013/2014. It doesn’t show any kind of massive jump during that time frame. It has had steady growth, but nothing huge. It’s not a penny stock, so it won’t have the same kind of volatility (up or down). 5/10KSHB has only been around since January of this year. Since then it has lost money, but over the last three months it has had a significant growth upwards. I would say sentiment is going upwards. With no historical price, it is hard to say if it will spike or not. 7/10TRTC has fallen over the last month, but risen over the last three months. I’m going to say that people are torn on it. Year to date, it has had significant growth, so it’s more positive than negative. It was around during the last marijuana bull rush. It went from $0.50 to $1.42. Not as big of a spike as expected, but still a significant spike. 6/10CANN has seen huge buying over the last month but has been flat over the last three months. Year to date, it is up. I would say there is positive sentiment around it. It was around during the last spike, going from $4.15 to $25.55. With a positive sentiment and a history of big spikes, it is a technical winner. 9/10GBLX has a negative 1 month and 3 month, but a positive year to date (nearly doubling). It was around during the last rush, it went from $0.50 to $8. That’s huge. Negative sentiment with a history of big jumps. 6/10Is The Return Worth The Risk? TL;DRGWPH is the safest in my opinion. They also have the least amount of upside. Currently trading right around $100, I would be shocked if it got a pop above $130 if legalization passes. Typical pharmaceutical business plan. Financials are ok, but not comforting (their large cash position helps). Their technicals are boring. If you want a pharmaceutical that happens to research marijuana, this may be your play. If you want a marijuana company, this is not your play. I’m not investing in it because that’s not what I want.OGRMF is the second safest in my opinion. If only invested in one marijuana company for the rest of your life, this would be my bet. They are creating a profit with their operations, have positive sentiments, and have a proven business model. This is a true marijuana grower. If that’s what you want, I would invest in this one.TRTC is the other grower. They are unique because they already have boots on the ground in two states that are voting over marijuana (CA and NV). Residents in These 8 States Are Set to Vote on Marijuana This November -- The Motley Fool. I think it pops more than 3x if CA and NV legalize. If it doesn’t go legal, it’s not going to look pretty though. I think TRTC pops more than OGRMF if pot is legalized, but it is riskier. If you are swinging for the fences and want a pot grower/distributor, this is your stock.KSHB is a legitimate company. They will be a long-term supplier to distributors everywhere. Their fundamentals may lag once it is legalized (because distributors will have to open up shop, and then order from KSHB), but they will see profitable growth. However, it is a pretty popular marijuana stock so I imagine it will pop on the news. This is a stock that you could buy for the next 3 months or the next 5 years. Both time periods will prove to be profitable. The time between (after legalization to profitability) may be rough.DIGP is similar to KSHB. It’s financial statements will see a lag from legalization to profit (because growers will need to pop up and then start contracting DIGP for their services). However, it has strong fundamentals and a history of pops with news. I imagine it will be a good play in the next 3 months or the next 5 years.CVSI is a unique company because of it’s vape line of products. With the popularity of the ecig (in a demographic that seems to be marijuana friendly). It is quite possible that it’s vape line takes off big. If that’s the case, it will be a home run. Even if that isn’t the case, it has fine fundamentals and has a history of jumping with good news. I would buy now, sell after the news, and maybe buy back into it once marijuana vapes seem to be a thing. More of a 3 month play than a long-term play.CANN is going to jump on the news, but it has bad fundamentals. This is a news-only play. I imagine their services will get commoditized pretty quickly (it seems like a well written blog would eliminate a lot of their advice). However, it could be a huge jump come November. If you are swinging for the fences, go with CANN and be prepared to sell fast after the news.GBLX has no revenue. It hasn’t sold a single thing. It’s the most legitimate sketch company I’ve seen. It has a history of huge jumps and if they do sell their stuff, it seems like good stuff. A company full of smart people (on paper) and smart research (on paper) with no revenue isn’t always a bad http://thing….it’s just scary. This is a coin-flip. It may go bankrupt or it may jump 16x. The investing public will decide. If they dig deep into the company, they will probably avoid it (at least for the long run). If they just see it’s associate with marijuana and buy, it will blow up. Humans are lazy, so I’m betting on the later situation.If you are looking for a long-term marijuana portfolio, I would go with KSHB, DIGP, and OGRMF.If you are looking for a short-term news oriented marijuana bet, I would go with TRTC, CANN, and GBLX.After doing all of this, I just noticed I forgot SRNA. My bad. I’ll try and get to it later and update the post.I haven’t spell checked this, so if you find an error, let me know.Full disclosure: I own shares in CVSI, CANN, GBLX, and DIGP. I will probably be buying TRTC later.

I think I can help you out here, sir. Here’s a few things I found after much research:Book of Strains, Second Edition: The 65 Strains Most Commonly Found at Dispensaries by Justin GriswellBuilding Soil: A Down-to-Earth Approach: Natural Solutions for Better Gardens & Yards by Elizabeth MurphyCannabis Indica: The Essential Guide to the World's Finest Marijuana Strains by S. T. OnerCannabis Sativa: The Essential Guide to the World's Finest Marijuana Strains by S. T. OnerCultivating Exceptional Cannabis: An Expert Breeder Shares His Secrets (Marijuana Tips Series) by DJ ShortGrow Great Marijuana: An Uncomplicated Guide to Growing the World's Finest Cannabis by Logan EdwardsGrowing Medical Marijuana: Securely and Legally by Dave DeWittHow to Get Started in the Lucrative Business of Medical Marijuana by Mr. Freddie NellJoint Ventures: Inside America's Almost Legal Marijuana Industry by Trish ReganLet it Rot!: The Gardener's Guide to Composting (Third Edition) by Stu CampbellMarijuana 101 by Professor LeeMarijuana Botany: An Advanced Study: The Propagation and Breeding of Distinctive Cannabis by Robert Connell ClarkeMarijuana Business: How To Open And Successfully Run A Marijuana Dispensary And Grow Facility by J. D. RockefellerMarijuana Chemistry: Genetics, Processing, Potency by Michael StarksMarijuana Garden Saver: Handbook for Healthy Plants by J. C. StitchMarijuana Grower's Handbook: Your Complete Guide for Medical and Personal Marijuana Cultivation by Ed RosenthalMarijuana Grower's Insider's Guide by Mel FrankMarijuana Growing Mastery: The Complete Guide To Advanced Marijuana Growing Methods & Techniques by Adam HolmesMarijuana Horticulture: The Indoor/Outdoor Medical Grower's Bible by Jorge CervantesMarijuana Pest and Disease Control: How to Protect Your Plants and Win Back Your Garden by Ed RosenthalMaster Gardener's Medical Cannabis Secrets: Learn to Grow Marijuana Nor-Cal Style! by Bodhi MoonPot, Inc.: Inside Medical Marijuana, America’s Most Outlaw Industry by Greg CampbellSecrets to Great Soil (Storey's Gardening Skills Illustrated) by Elizabeth StellSoil Science Simplified by Helmut Kohnke, D. P. FranzmeierStart With the Soil: The Organic Gardener's Guide to Improving Soil for Higher Yields, More Beautiful Flowers, and a Healthy, Easy-Care Garden by Grace GershunyTeaming with Microbes: A Gardener's Guide to the Soil Food Web by Jeff Lowenfels, Wayne LewisThe Best of Ask Ed: Your Marijuana Questions Answered by Ed RosenthalThe Big Book of Buds: Marijuana Varieties from the World's Great Seed Breeders by Ed RosenthalThe Cannabible by Jason KingThe Cannabis Breeder's Bible: The Definitive Guide to Marijuana Genetics, Cannabis Botany and Creating Strains for the Seed Market by Greg GreenThe Cannabis Encyclopedia: The Definitive Guide to Cultivation & Consumption of Medical Marijuana by Jorge CervantesThe Cannabis Grow Bible: The Definitive Guide to Growing Marijuana for Recreational and Medical Use by Greg GreenThe Cannabis Health Index: Combining the Science of Medical Marijuana with Mindfulness Techniques To Heal 100 Chronic Symptoms and Diseases by Uwe BleschingThe Great Book of Hemp: The Complete Guide to the Environmental, Commercial, and Medicinal Uses of the World's Most Extraordinary Plant by Rowan RobinsonThe New Organic Grower: A Master's Manual of Tools and Techniques for the Home and Market Gardener, 2nd Edition by Eliot ColemanThe Organic Gardener's Handbook of Natural Pest and Disease Control: A Complete Guide to Maintaining a Healthy Garden and Yard the Earth-Friendly Way by Fern Marshall Bradley, Barbara W. Ellis, Deborah L. MartinThe Pot Book: A Complete Guide to Cannabis by Julie Holland M.D.The Secrets of the West Coast Masters 2nd Edition by Dru WestThe Soul of Soil: A Soil-Building Guide for Master Gardeners and Farmers, 4th Edition by Joseph Smillie, Grace GershunyTrue Living Organics: The Ultimate Guide to Growing All-Natural Marijuana Indoors by The RevAnd if you need help boiling them down, grow sites like growweedeasy.com have book reviews to help you find books that have had their grow techniques tried: Marijuana Grow Books Review

First of all, I believe you are probably looking to invest in order to take advantage of the large recreational pot smokers. I’m not going to lecture you on the risks (pot is illegal, ect). I’m also not going to lecture you on portfolio construction and active management. I’m going to analyze some companies for you, so here it goes:This is how I analyze companies:Business Strategy: How do they make money? Why are they special?Current Fundamentals: How much money have they made? How much money do they make each year? Is this growing or falling? How much do they own? How much do they owe? Is this growing or falling?Technical Analysis: What has their stock been doing recently? What’s the trend? What has it done in the past? What is it likely to do in the future?Is the Return Worth The Risk? How much money could I make?This may not be the best way or even the smartest way, but this is my way. Now let’s see how this works with they extremely young marijuana industry.Business StrategySince it’s illegal (on the federal level) to grow and sell marijuana (in the US), how do you take advantage of marijuana legalization?There seems to be two large groups of companies (and a few smaller random ideas):Pharmaceuticals: Use cannabis to help fight disease, but some of these companies create products such as edibles.Suppliers To Growers: Create equipment that growers of marijuana will/do need.RandomPharmaceuticalsCBD Pharmaceuticals & Consumer Cannabidiol Products | CV Sciences (Ticker:CVSI)GWPharma - Welcome (Ticker: GWPH), and Cannabis Sativa (CBDS) are three I’ve looked at in this area.CVSI has two divisions: pharmaceuticals and consumer products. Pharmaceutical Division is developing synthetically‐formulated cannabidiol‐based medicine, pursuing the approval of the U.S. Food and Drug Administration (FDA). Consumer Division is engaged in the development, manufacturing, marketing and distribution of consumer products containing plant-based cannabidiol (CBD), which is refined into its portfolio brands: PlusCBD Oil and Purified Liquid (vape eliquids). Their pharmaceutical is a chewing gum that is cannabis based. They could be the Nicorette of Marijuana and with the growth of e-cigs, they could be big there too. What makes them special: Their Purified Liquids vape juice. 7/10GWPH is the marijuana pharmaceutical company. They have been around since 1998. With one successful product already, Sativex, and 6 more in the pipeline, they are legimate. They make money just like every other pharmaceutical company, they research drugs, get these drugs approved, sell the drugs to help fight disease. The only thing that makes them special is the fact that they are established with legitimate scientists. 7/10CBDS is a mess of a business model. It owns five subsidiaries: three “pharmaceuticals”, a customer rewards card, and a website (CBDS.com: All Things CBD). The pharmaceuticals are facial creams, balms, and water (yes drinkable water) that is infused with cannabis. The water kinda sounds interesting: CBD Water by Wild Earth Naturalsbut most of this is more of a “natural products” play than a “marijuana is legal” play. They also offer a “benefits card” that helps with prescription products some how. The website isn’t really live and it’s trying to be the Wikipedia of pot…..which doesn’t seem like a good business idea. 3/10SuppliersIf you can’t grow it, supply those who do. That’s the business model behind a lot of companies currently in the public markets. American Cannabis Co (AMMJ), General Cannabis (CANN), Marijuana Packaging & Supplies (KSHB), Surna | Water-Chilled Climate Control Systems (SRNA), and GrowBlox Sciences OTCQB: GBLX are the ones I’ve found in this space.AMMJ provides end-to-end consulting and product solutions for the medical, adult use and low-THC regulated cannabis markets both nationally and internationally. They tell people who actually work in the marijuana industry how to start, grow, protect, and sell their product. They sell everything from soil to retail marketing. With some big name clients (like OrganiGram), they seem legit. However, they also seem like goobers. If you look up the owners and senior management, they just seem like a bunch of ex-ski instructor hippies that were good at growing weed in college and somehow have turned it into a business. Maybe it’s working though. They have a lot of stuff. Solutions - American Cannabis Company including weed “fatheads”. Fuck. Idk. Their differentiation is only their experience, which I’m not big on. 5/10CANN pretty much does the exact same thing. They help new and established growers and sellers stream-line their business through their various products. They have a greenhouse consultant, security firm, brand development, and apparel line. The only one that sees unique to me is the Greenhouse consultant. Security is security no matter what you are guarding. Brand development is brand development no matter what you are selling. Pot heads are already wearing clothes and have their brands developed already (however, their apparel line does have 3,000+ likes on facebook: https://www.facebook.com/chieftonsupply/ ) They have management that has done shit before and a semi-independent board of directors. Their value proposition is in their experience, which I do believe in, but I feel like they should eliminate some of their services and specialize. Maybe they will after marijuana is legal? 6/10KSHB is a one-stop shop for any business looking to get started in the legal cannabis trade. It has built itself a first-mover advantage by providing cannabis enterprises across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law. They create packaging to store, ship, and safely secure marijuana. They also sell stuff you can smoke it out of too. It is an interesting play because it can be used by both legal/illegal distributors, users, and other suppliers. They have a huge following and are featured on CNBC and INC. With locations in CA, CO, and WA these guys are legit. Their special because they were the first ones to start this and it’s proved to be big. 9/10SRNA engineers and manufactures innovative technology and products that address the energy and resource intensive nature of indoor cultivation. Surna’s current focus lies in supplying industrial solutions to commercial indoor cannabis cultivation facilities. They make indoor greenhouses for marijuana. This is an industry that will grow exponentially when marijuana is legalized. Growing weed outside is cheaper, but also harder to secure and control. While weed may one day be an outdoor cash crop like cotton, it will start indoors. They are unique because they use water-chilled climate control systems. Instead of having huge electric bills to run the AC in these greenhouses, they use water. This technology may have the potential to be used in any commercial buildings. Products | Surna is an easy way to see how they are special. 8/10GBLX creates a few things: turn-key marijuana (they grow it, you buy it wholesale), high tech “grow boxes” (you use their tech to grow it yourself), and a pharmaceutical line (skin creams and such). I’m not huge on their pharmaceutical line, because it’s an overplayed space. Where GBLX wins is in their science. They have ammassed a huge amount of information on how to grow the best pot (starting at the seed Cultivation Science and moving to the end-user phase intellectual Property & Regulatory). These guys are balls smart. They have a lot of ways to distribute their our products for revenue. 9/10GrowingI’ve found two companies that are “vertically integrated” to grow the marijuana (usually in Canada) and sell in America through their subsidiaries: OrganiGram - Products (Ticker: OGRMF) and Terra Tech Corp. (TRTC). There are more out there, but they all fall under one of these business models (and I like these two the best).OGRMF is technically a Canadian company (where it is legal to grow for medical purposes). They grow the weed and ship it to you. However, I think (I can’t seem to find anywhere that tells me it does or doesn’t) they only ship to Canadians (and you have to have your medical prescription). It’s the 1–800 Contacts of the medical marijuana world. I bet they would be more than happy to ship to US citizens once pot was federally legal (and they could confirm your birth date). Probably not a bad business model at all. Special because they ship it directly to you. 8/10TRTC is an American company that: “Through multiple subsidiaries…. are committed to cultivating and providing the highest quality medical cannabis consistently delivered to qualified, registered medical marijuana establishments in the safest and most secure manner. Our commitment to advancing research within the medical cannabis industry will lead our approach in cultivating and cross-breeding strains of medical cannabis that treat a variety of ailments.” They are a grow, package, and deliver company. They grow through their MediFarm brand. They package their brands as either IVXX or EDIBLE GARDEN. They have multiple weed shops through their brand called Blüm (in CA & NV). I’m sure they would be happy to open their doors to non-medical patients if it was legal. Special because of their multiple brands and locations in CA & NV. 9/10Social MediaMassRoots (MSRT) is a social media just for pot smokers…….With more than 900,000 users, MassRoots is one of the largest and fastest growing platforms for cannabis enthusiasts. I don’t know why someone would use a pot specific social media over a generic social media site. They make money by selling ads. I don’t like it. 2/10TestingDigipath Inc. - Digipath Inc. (DIGP) tests marijuana. Just like any drug, food, beverage, or anything, it must be tested to ensure it is not harmful. DIGP is doing that and from what I’ve found, they are the only one. If weed becomes legal, FDA and other government entities will need standards. Then they will need a way to measure to these standards. DIGP and it’s equipment will be the answer. Dr. Cindy Orser, Ph.D., a 20-year biotech and diagnostic industry veteran, leads these efforts on behalf of Digipath, serving as Chief Science Officer and assists cannabis providers and regulatory agencies, as well as working in academia in several key roles. In addition to her work, she holds 18 patents and authored 41 peer-reviewed publications. Yea. They are legit. 8/10FundamentalsWhen looking into a company’s financial statements, I first look for safety. Are they going to go bankrupt soon? Can they pay their debts? What would it be worth if they were to go bankrupt tomorrow?The Altman Z-score is a terrific way to judge bankruptcy potential, but that would take me a long time, so I’m not going to do calculate that. Instead, I’m using the quick ratio (to judge liquidity) and the debt/equity ratio (to judge solvency). I’ll be using price to book to estimate bottom line value.The next thing I do is try and figure out where the market has priced their growth (aka valuation). I’m using price-to-sales to figure out this (because so many of them have a net loss).Finally, I’ll look at cash flow from operations to see if they are profitable.We are going to look at everyone we gave a 6/10 or higher on the business strategy: CVSI, GWPH, CANN, KSHB, GBLX, OGRMF, TRTC, DIGP.LiquidityCVSI is fine with quick ratio around 1. 6/10GWPH is not using enough of it’s cash. It has $254 Million in cash. Use it. Obviously, it can pay it’s debts. 8/10CANN is in trouble. 2/10KSHB is getting close to trouble with barely over .5 quick ratio. 5/10GBLX is in trouble 2/10OGRMF is in the perfect sweet spot. 10/10TRTC is kinda sketch but not in trouble. 4/10DIGP is in the perfect sweet spot. 10/10SolvencyHow leveraged do you want to be is always a hard question to answer. Average, if you avoid the negatives, is 0.33. Anything under that is conservative. Anything above that is aggressive.CVSI is good 8/10GWPH is good 8/10CANN has negative stockholders equity. It means the company not only has been losing money, but has lost more money than its owners put into the company in the first place. Start-ups commonly lose money for a while as they lay the groundwork for success. Once a company breaks into the black, it can begin to erase the deficit. We are going to assume this is an industry issue (since GBLX also has negative stockholders equity) for the older companies. Possibly they believed marijuana was going to be legalized earlier and started their companies a little bit too early, suffering losses since they opened their doors. CANN started in 2011. 2/10KSHB is good 8/10GBLX has negative stockholders equity. Opened their doors in 2004. 2/10OGRMF is about double the average, so they are taking more risk (or growing faster) using debt. Could be good, could be bad. Since they are the only company that has a positive cash flow from operations, I’m going to say it’s good. 10/10TRTC is good 8/10DIGP is surprisingly low. Maybe they aren’t growing enough? 6/10ValuationCVSI has a competitive valuation by both Price/Book and Price/Sales. 9/10GWPH has a somewhat high Price/Book but an extremely high Price/Sales. 4/10CANN has a relatively high valuation on both fronts. 4/10KSHB has a high valuation. 4/10GBLX has a normal Price/Book but has ZERO REVENUES. That’s sketch. 2/10OGRMF has a solid Price/Book but has a high Price/Sales. 6/10TRTC is competitive in both valuations. 7/10DIGP is competitive in both. 7/10ProfitabilityEveryone has a negative cash flow EXCEPT for OGRMF (maybe because of their Canadian clients?). It’s possible that OGRMF is what the future profitability looks like for the US based companies. OGRMF gets 9/10GWPH and TRTC have such a deficit, it scares me. They get 2/10. Everyone else gets 5/10.Overall, OGRMF has the highest fundamental value.CVSI & DIGP have the second highest fundamental value.GWPH, KSHB, & TRTC are the third teir.CANN & GBLX aren’t pretty from a fundamental standpoint. This doesn’t mean they aren’t candidates for investments, it just means they hold more risk than the others.TechnicalIt’s always a good idea to look at the current trend of prices, historical highs,and historical lows. Also, given that we had a similar situation back in 2014 (the legalization of marijuana), it’s not a bad idea to see what the stock did on that news. I’m basing my ratings off the possibility of having a huge run-up if pot is legalized during the 2016 elections/votes.OGRMF has been ripping up the last 3 months. People are buying. Going from around $0.75 to $1.25. It was not around when the last marijuana bull rush came. It’s historical high was $2.15. It seems to spike once a month around the 8th. Probably just random. Looks like sentiment is positive. 7/10CVSI has been falling the last three months with a big drop this last month. It’s fallen over the last year and the last three years. HOWEVER, it had a high of $180 back in 2014 during the last marijuana bull rush. It jumped from $12 in March of 2013 to $180 in February of 2014. Sentiment lately has been negative, but it has a history of massively positive overbuying during big news events. 6/10DIGP has been relatively flat over the last three months. However, it’s been up slightly so far this year. It was around during 2014 and jumped from $2.29 in July of 2014 to $29.50 later that month. Flat sentiment lately, but history of big jumps. 7/10GWPH has ripped up during this past month. Before that it was relatively flat. It was around during 2013/2014. It doesn’t show any kind of massive jump during that time frame. It has had steady growth, but nothing huge. It’s not a penny stock, so it won’t have the same kind of volatility (up or down). 5/10KSHB has only been around since January of this year. Since then it has lost money, but over the last three months it has had a significant growth upwards. I would say sentiment is going upwards. With no historical price, it is hard to say if it will spike or not. 7/10TRTC has fallen over the last month, but risen over the last three months. I’m going to say that people are torn on it. Year to date, it has had significant growth, so it’s more positive than negative. It was around during the last marijuana bull rush. It went from $0.50 to $1.42. Not as big of a spike as expected, but still a significant spike. 6/10CANN has seen huge buying over the last month but has been flat over the last three months. Year to date, it is up. I would say there is positive sentiment around it. It was around during the last spike, going from $4.15 to $25.55. With a positive sentiment and a history of big spikes, it is a technical winner. 9/10GBLX has a negative 1 month and 3 month, but a positive year to date (nearly doubling). It was around during the last rush, it went from $0.50 to $8. That’s huge. Negative sentiment with a history of big jumps. 6/10Is The Return Worth The Risk? TL;DRGWPH is the safest in my opinion. They also have the least amount of upside. Currently trading right around $100, I would be shocked if it got a pop above $130 if legalization passes. Typical pharmaceutical business plan. Financials are ok, but not comforting (their large cash position helps). Their technicals are boring. If you want a pharmaceutical that happens to research marijuana, this may be your play. If you want a marijuana company, this is not your play. I’m not investing in it because that’s not what I want.OGRMF is the second safest in my opinion. If only invested in one marijuana company for the rest of your life, this would be my bet. They are creating a profit with their operations, have positive sentiments, and have a proven business model. This is a true marijuana grower. If that’s what you want, I would invest in this one.TRTC is the other grower. They are unique because they already have boots on the ground in two states that are voting over marijuana (CA and NV). Residents in These 8 States Are Set to Vote on Marijuana This November -- The Motley Fool. I think it pops more than 3x if CA and NV legalize. If it doesn’t go legal, it’s not going to look pretty though. I think TRTC pops more than OGRMF if pot is legalized, but it is riskier. If you are swinging for the fences and want a pot grower/distributor, this is your stock.KSHB is a legitimate company. They will be a long-term supplier to distributors everywhere. Their fundamentals may lag once it is legalized (because distributors will have to open up shop, and then order from KSHB), but they will see profitable growth. However, it is a pretty popular marijuana stock so I imagine it will pop on the news. This is a stock that you could buy for the next 3 months or the next 5 years. Both time periods will prove to be profitable. The time between (after legalization to profitability) may be rough.DIGP is similar to KSHB. It’s financial statements will see a lag from legalization to profit (because growers will need to pop up and then start contracting DIGP for their services). However, it has strong fundamentals and a history of pops with news. I imagine it will be a good play in the next 3 months or the next 5 years.CVSI is a unique company because of it’s vape line of products. With the popularity of the ecig (in a demographic that seems to be marijuana friendly). It is quite possible that it’s vape line takes off big. If that’s the case, it will be a home run. Even if that isn’t the case, it has fine fundamentals and has a history of jumping with good news. I would buy now, sell after the news, and maybe buy back into it once marijuana vapes seem to be a thing. More of a 3 month play than a long-term play.CANN is going to jump on the news, but it has bad fundamentals. This is a news-only play. I imagine their services will get commoditized pretty quickly (it seems like a well written blog would eliminate a lot of their advice). However, it could be a huge jump come November. If you are swinging for the fences, go with CANN and be prepared to sell fast after the news.GBLX has no revenue. It hasn’t sold a single thing. It’s the most legitimate sketch company I’ve seen. It has a history of huge jumps and if they do sell their stuff, it seems like good stuff. A company full of smart people (on paper) and smart research (on paper) with no revenue isn’t always a bad http://thing….it’s just scary. This is a coin-flip. It may go bankrupt or it may jump 16x. The investing public will decide. If they dig deep into the company, they will probably avoid it (at least for the long run). If they just see it’s associate with marijuana and buy, it will blow up. Humans are lazy, so I’m betting on the later situation.If you are looking for a long-term marijuana portfolio, I would go with KSHB, DIGP, and OGRMF.If you are looking for a short-term news oriented marijuana bet, I would go with TRTC, CANN, and GBLX.After doing all of this, I just noticed I forgot SRNA. My bad. I’ll try and get to it later and update the post.I haven’t spell checked this, so if you find an error, let me know.Full disclosure: I own shares in CVSI, CANN, GBLX, and DIGP. I will probably be buying TRTC later.