• Ted Ohashi

Clarification of Sunniva's guidance on sales of branded products

Here is some additional information or clarification to Sunniva’s guidance on sales of branded products of $55 to $60 million in California this year. To clarify, this does not include revenue from other sources such as Natural Health Services and Full-Scale Distributors that totalled $13.3 million in the first nine months of the current fiscal year. The term “guidance” suggests management will provide further updates if conditions change for better or worse moving forward.

The source of the clean biomass being used at the present time is purchased from strategic suppliers. Starting around midyear, the Cathedral City production facility will begin to contribute biomass which means expected profit margins will also increase. Finally, Sunniva continues to consider the spinoff and/or strategic alternatives for their Canadian assets. There is no reason to change the mid-2019 timeline for this to be resolved.

Recently, I commented on Kevin Jackson’s report on Seeking Alpha that included a price expectation for SNN of USD $10 to $20 per share. These were some of his reasons for expressing that opinion.

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