
One of my top picks is VEXT Sciences. They are a small company out of Arizona and expanding in to Ohio. They are profitable, albeit they are small and not well known. The ‘not well known’ aspects are a benefit. As the industry transitions in to a different legalization landscape, newer investors are going to be looking for companies that make sense to invest in. So, being unpopular, for now at least, is likely to be short lived. Once investors catch wind of what VEXT Sciences has to off as a potential investment, these investors will likely scoop up shares quickly.
While I am rebuilding my Top Picks pages, I wanted to highlight these better positioned stocks going forward. VEXT Sciences has a lot of potential because it is profitable and undervalued. And, they are continually expanding. Analyst expectations are for sizable gains in the coming two years. Hopefully, this will jolt VEXTF stock higher.

Revenue

Revenues are starting to inch back upward after moving sideways. With more expansion in to new markets, this will start to drive revenues higher – projected revenues are just below. The Arizona operations may be difficult to grow simply because of the lack of new licenses for dispensaries, but VEXT Sciences is also expanding in to Ohio. This expansion is interesting because Ohio is not adult-use legal just yet. However, if VEXT Sciences can get a foothold in this state and then the state flips – as many states have, that foothold is a race forward versus others. Continuously, there will be a drive higher in revenue.
But, more can be done and likely will be done. If the Ohio operations really take off, real growth and can push revenues – VEXT has just agreed to acquire two more dispensaries in Ohio.
Projected Revenue

Projected revenues are looking solid for the next two years, and this does not include the two new dispensaries they are acquiring in Ohio – revenue may exceed this. With increased revenue, this will likely add to the bottom line further as economies of scale through more volume as well as a higher utilization of products are likely to push revenues further.
The $65M is an ~52.5% increase year-over-year in revenue increase. If VEXT can increase its revenue while maintaining profitability, this really pushes the bottom line more.
EBITDA

EBITDA profits have moved sideway along with gross revenue. But, with the new dispensaries, perhaps there will be a push higher here as more revenue will increase gross profits & operating profits, which these will trickle downward.
A company just starting out would want to push for this all-too-crucial milestone as quickly as possible. Positive EBITDA shows that a company is producing better and better results and can pay its core business expenses. We still do not know the existing output of the two new dispensaries. They will likely be EBITDA profitable. But, the percentage of the total level will matter. As VEXT will want to slash costs, there are opportunities to cut costs overall after the acquisition.
Net Earnings

Over the past 12 quarters, VEXT Science has been net earnings profitable. While the company tries to scale Arizona upward more and more, there are limitations as they are not able to add in too many additional dispensaries. But, if VEXT could add in more dispensaries there, this would really push their profits. In the meantime, VEXT is downsizing its Arizona footprint to cut costs and increase profits.
Total Equity

Positive and increasing total equity is such an important thing for a business such as a cannabis company that is still building its footprint. With positive cash flow, VEXT will be able to leverage its equity, borrow against it, and ultimately push to expand its footprint with dispensaries. If the borrowing costs can be covered by profits from running an additional dispensary, this enables a company to continually expand operations.
Being net earnings positive is such an important milestone. This really sets VEXT apart because nearly all other cannabis stocks because VEXT can borrow against its current equity as cash flow will pay for the debt.
VEXTF Stock

No one is really paying attention to VEXTF stock. That is fine with me as I continually build up positions at these deflated prices. With the removal of 280E, VEXT Science will become more profitable and VEXTF stock will have the ability to move even higher. For now, a lot of the attention is being paid to the bigger stocks and these smallish cannabis stocks are being ignored – there are a handful.
I will continue to add to this position with VEXTF stock.