IM Cannabis Company – IMCC Stock – Is it worth staying in?

I am in the process of rebuilding my cannabis stocks portfolio as the shifts we have all been waiting for are now here.  Some stocks I want to buy more of whereas other stocks I want to target exits and reallocate my funds.  IMCC is one of the considerations for putting on the chopping block.

I got in to IMCC stock because of the acquisition of MYM Nutraceuticals – memory makes me think it was in summer 2021.  They were a Canadian cannabis stock that had some solid initial numbers.  After the merge, I felt there would be solid moves higher in the new company’s numbers.  That never materialized.

IM Cannabis Company is primarily focused in Israel & Germany.  This makes everything a tough decision because I believe both of these locations are going to be big.  But, do I want to wait for things to turn around?  Or, is it best to cut the losses and move onward?

Revenue Projections

2023 was not exactly fruitful for IM Cannabis. In fact, revenues dropped for IMCC.  But, analysts expect a return to growth for IMCC in the coming two years.  There appears to be very broad optimism for revenue growth over the next two years across the board for many within the industry.  Because of such a broad optimism, the pessimist in me wonders if that is actually a possibility.  I do not see much in the way of evidence that suggest this will actually occur so far.  But, Q2 2023 has been a record quarter so far.  However, there are seasonality factors involved, so I question everything overall.

If IM Cannabis can achieve the revenue increases this would go far to add to the bottom line.

EBITDA Profits

Slowly but surely, IM Cannabis is getting closer to break-even with EBITDA profits.  This is the very first metric that many would look toward to understand if the business plan is working.  If a company can scale up to a point where they are at least break even with EBITDA, then core business costs are covered.  This is why achieving this goal is so important.  IM Cannabis has not achieved this despite acquiring retail pharmacy businesses throughout Israel.  I wonder on the wisdom of this and if there will be a turnaround in profitability at some point.

Total Equity

Here is the next area that I consider when considering an investment in a company. The important things I want to know are if a company is overburdened with costs.  In the case of IMCC, the company is dwindling its assets versus liabilities.  This would be the future of the company and if it is dwindling, wouldn’t the future be doing the same?  Granted, many companies are sliding lower.  But, at the very least there is a clear path forward with revenue & profits and this would balance out the future of the equity picture.  A company that has to finance the bill continuously with more and more debt will eventually be overburdened and have a difficult time moving forward.

IMCC Stock Chart

The chart here effectively sums everything up for me with IMCC stock.  again, I inherited this company after an acquisition and I figured I would give them a shot.  During that time the entire industry was burdened within a bear market.  So, the moves themselves are not different than many others.  But, there have been positive developments within the industry with the announcement of rescheduling by the US Federal Government.  I would have hoped for a big move higher with IMCC stock at the same time.  Nothing.

I would have wanted to wait until November 27th to sell off IMCC stock.  If we did not get any kind of moves higher with IMCC during the announcement of rescheduling of cannabis, or the recommendation thereof, I do not see how the actual announcement will do the same.

I am going to sell out of this stock.  I do not see any real upside from here.  Time is money and if there is any potential moves upward, they are more likely to be the US MSOs versus IMCC.  While I believe IMCC will see revenue growth, time is money.  And, an investment in IMCC means limited resources cannot be invested elsewhere.  For these reasons, I am tapping out.

IM Cannabis Company Financial Charts