LGP released their 4C today and their share price rose 30% on the news!

Highlights

• Revenue of $10.2 million up 40% on prior quarter 
• cashflow positive quarter of $0.6 million
• They are getting some traction in the European market with 60% increase in flower sales into Europe with over 110% increase in French oil sales
• Scale emerging with 30% increase in cash receipts but <15% increase in operating cash costs
• Cash in bank of $4.8 million, up from $4.3 million
• Seven of original 20 cannabis peers from 2022 currently delisted or suspended from ASX: LGP one of only two companies with positive operating cashflow, and of these the only one with growth

This is the best quarter in the companies history and they appear to be in a strong position to emerge from the rubble of cannabis companies in Australia. LGP have strong branding and this is helping sales.

I sold out of this stock (just a couple of weeks before this pop!) for two reasons:

1. This is a commoditised product (despite the strong branding) and Canadian producers have been dumping onto the Australian market. LGP does not have a durable business advantage.
2. There is increasing pushback from Australian college of general practitioners and psychiatrists and government regulation is becoming more likely in this area. See here.

For me this is an example of making the right decision for the right reason but getting the wrong outcome.