Planting Mindset Capital's Flag
Mindset reports a 12% stake in LEEF Brands
Warning: The following column is about a microcap company. Microcaps by definition can be illiquid and experience wild gyrations. It is important to do your own due diligence, rely on your own research and understand that microcaps can be very volatile. Please proceed reading using your highest levels of caution. That being said…
Mindset Capital now owns over 12% of LEEF Brands after leading the company’s latest financing round. Why would we take such a large stake in such a small company?
Here is why:
The financial impact of LEEF fully activating Salisbury Canyon Ranch next year is not yet reflected in the company’s valuation. Our own estimate is that cash flow should jump to $15 million per year once this ranch is brought online.
No cannabis company offers greater upside from interstate commerce or exports than LEEF, largely due to its tiny enterprise value of just $75 million relative to the potential of selling its product for as much as 8 times more in other states or countries. Consider that at full scale, every $0.10 per gram increase in distillate prices could generate as much as $7 million in additional annual cash flow for LEEF — and in New Jersey, prices are $7 per gram higher than in California.
Investors may not fully appreciate the sheer scale of what LEEF is building. The company is working towards being capable of producing approximately 2 million pounds of cannabis biomass and 70 million grams of vape distillate — and is actively working to expand that to as many as 4–5 million pounds of cannabis biomass and over 100 million grams of distillate. At that scale, LEEF could become the largest cannabis producer in the world.
This is why we now own such a large stake in LEEF and hold warrants to acquire even more. We believe LEEF’s stock price could increase more than 10 times from its current level.
As always, please do your own due diligence. This is a long-term holding for Mindset Capital and its investors. We have planted a flag in what we believe could be one of the most important cannabis companies in the world.
If you would like to research LEEF further, please check out our deep dive research report on the company: