Scott Simpson 
Member since Aug 19, 2013



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Re: “Whistler Medical Marijuana Corp. sells in deal worth up to $175M

Here is where Aurora is overpaying for Whistler
Auroras stock rose more than 6 percent (compared with the ETFMG at +1.7 percent) when the letter of intent was announced. So it is easy to conclude that investors are wholeheartedly behind the deal. But did Aurora overpay in order to make the deal happen? We arent condemning Terry Booth, but the evidence says yes indeed with only one caveat.

Whistler Medical Marijuana Corp. is a private company, so there is not a lot of data available. The biggest question out there is what is Aurora gaining for their $132+ million that could not have been accomplished differently.

Lets start by looking at production levels. Whistler is scheduled to open a second production facility in September at which time it will have 5,000 kilograms of annual capacity of the highest quality Certified Organic cannabis. That suggests Aurora is paying $26.4 per gram for Whistler production. As of the first quarter of 2019, Aroras cash cost to produce per gram of dried cannabis sold was $1.45.

Why not contract to purchase all the production of Whistler and agree to finance their expanded production? Even if the price per gram were $9, this would be more cost-effective.

So what is Aurora gaining for what seems like an enormous premium?

To begin there is the value of Whistler being Certified Organic. Secondly is the brand name value and cache of Whistler. Then there are certain unknowns like the number and benefit of any patents Whistler holds. At the end of the first quarter of 2019, Aurora carried $67 million in active patents on their balance sheet and having the right technology is a no doubt a valuable asset. But could it be worth $100 million or even $50 million: very doubtful.

As for the value of the Whistler brand, it holds excellent value according to Rebecca Brown CEO of advertising firm Crowns Agency. As paraphrased in MarketWatch she said, the words organic and Whistler are also a declarative, clear statement of the brand, and Whistler, the British Columbia resort town, is associated with positive things and as a place brand Canadians are very familiar with it.

[Marijuana stocks weekend investor roundup: Analysis of the week's most important events in the cannabis industry (January 12)]

With no disrespect to anyone, the transferability of the Whistler brand attributes and connection to cannabis outside of Canada are far more modest, thus far less valuable.

Just because Aurora is overpaying, at this point in its financial evolution one thing should be mentioned: they can afford to. After all, Whistler is being bought with Aurora equity that at $7.4 billion in public market value may be Terry Booths cheapest currency.

One thing can be stated with confidence. Neither Berkshire Hathaway or Warren Buffett would pay $132 million for 5,000 kilograms of even the best and purest Certified Organic cannabis.

2 likes, 0 dislikes
Posted by Scott Simpson on 01/17/2019 at 8:24 AM

Re: “World Ski and Snowboard Festival founder critical of new direction of event

Vail doesn't want the brown baggers that made this town what it is today.

7 likes, 0 dislikes
Posted by Scott Simpson on 12/13/2018 at 10:50 AM

Re: “The price of dithering?

The politicians are only part of the problem. It's the leadership at the RMOW led by a man with zero business experience.

With Jack at the helm for the next four years, and a council that will displace this current one, nothing will happen.

4 likes, 0 dislikes
Posted by Scott Simpson on 09/20/2018 at 11:30 AM

Re: “Province commits to RMI as 'ongoing' program

"That funding is so important to us, and without it we would be drastically reducing some of our programs and projects, so we're very pleased to hear that news."

Nope. She said taxes would increase.

Without RMI funds, Whistler would "be looking at an 18- to 20-per-cent property tax increase to make up those moneys,"…

Posted by Scott Simpson on 09/13/2018 at 10:00 AM

Re: “Smokers will have to butt out on all Whistler Blackcomb property as of May 31

They do realize that marijuana as a medicine is protected under the constitution, don't they. At a time when marijuana becomes more acceptable as a cure for diseases, here comes Whistler Blackcomb.

2 likes, 2 dislikes
Posted by Scott Simpson on 05/21/2015 at 9:18 AM

Re: “Illegal nightly rentals contributing to housing crunch: hotel association

wow. go after people trying to fill a gap instead of coming up with solutions. way to go hotels and nancy themayor #epic fail

13 likes, 6 dislikes
Posted by Scott Simpson on 12/31/2014 at 6:55 PM

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