Hi there
FAF is a retail chain of cannabis products - so it's not a producer, but a retailer. Worth nothing, I much prefer this type of exposure than the exposure on the production side which is still fraught with many issues.
It is also seeing considerable revenue growth. As it increases the number of locations, revenue is growing alongside. It is quickly establishing itself as one of the largest chains in the country and as of last update, it had 71 licensed stores (67 cannabis retail stores, 4 accessory stores) in operation.
It also recently launched its Hifyre's Spark Perks™ member program which now has 183,000 members. A strong member program can be a competitive advantage as we've seen with other leading member programs in different industries. I've tried researching, but i believe it is the largest program of its kind in the cannabis industry.
Another positive - the company achieved positive adjusted EBITDA last quarter - first time in history. The company is seeing triple digit revenue growth and currently trades at 1.9 times sales and has an EV to EBITDA ratio of 2.25. Expectation is for 75% revenue growth next year (fiscat 2022), which gives it a forward P/S ratio of only 1.60.
I am liking what I am seeing out of the company. It is starting to become a reliable performer and has beat expectations in the last few quarters. It is growing revenue at a nice clip, the strategic partnership with ATD adds credibility and can lead to significant expansion and it is priced at reasonable valuations. Although the lockdowns has led to certain store closures, its Hifyre One platform has soften the blow due to its e-commerce and data analytics capabilities.
There is however, still plenty of risk with such a small cap stock and there still remains plenty of negative sentiment towards the industry as a whole. That being said, it seems to be one of the best capitalized, has a clear path to growth and seems well managed.
Mat