I made Alcanna (CLIQ.TO; $6.15) a top pick on BNN three weeks ago. I hadn’t written it up yet because I wanted to meet with management first and that didn’t happen until after my appearance. Post my meeting with senior management a few days ago I bought a sizeable position. Alcanna sells alcohol and marijuana at more than 200 retail locations, mostly in Alberta. The stock cratered last year because the company was being harassed by deep-discount boozer retailers. It responded by using its financial muscle (balance sheet, loaded with cash from an investment by Aurora Cannabis at $15/share) to slash its own prices to money-losing levels. This drove one deep discounter to join forces with CLIQ (in the form of a joint venture that CLIQ owns 70% of) and drove another into bankruptcy, after which the joint venture bought the assets at fire-sale prices.
There is still one big deep discounter to contend with, but I understand it’s on the ropes and that it’s a matter of time before it either dies or joins the JV. Already, however, CLIQ has been raising prices. I believe this stock can double in 12-18 months if everything works as planned. The stock isn’t on anyone’s radar, so it’s cheap.
I will send a more detailed report when I’m back from vacation in two weeks.
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