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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Cannabis specialist fund returned 65.6% in 2024 versus MSOS down 85% over three years, capitalizing on market inefficiencies from lack of institutional research. Largest holding Grown Rogue expected to show triple-digit cash flow growth in 2025 while trading at 5x estimates."
The Mindset Value Wellness Fund returned 65.6% in 2024 despite a 4.9% Q4 decline, significantly outperforming the MSOS cannabis benchmark which fell 85% over the three-year period since 2022. Manager Aaron Edelheit believes cannabis presents exceptional alpha opportunities due to minimal institutional participation and lack of fundamental research following federal illegality constraints. The fund's largest position, Grown Rogue, is expected to deliver triple-digit cash flow growth by Q3 2025 while trading at only 5x estimated cash flow. Cannabis beverages represent 11% of the portfolio, growing over 100% annually and potentially capturing 20% of the $250 billion alcohol market as consumers adopt zebra striping consumption patterns. The Glass House preferred investment continues generating 22% annual returns through payment-in-kind interest and warrants. With declining institutional competition and persistent market inefficiencies, the manager remains bullish on cannabis opportunities while focusing on unit economics and operational excellence rather than federal reform timing.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
Very high conviction evidenced by concentrated portfolio with named largest position (Grown Rogue), specific return expectations (triple-digit cash flow growth), precise valuations (5x cash flow), and material position sizing (11% in beverages, 8% Glass House preferreds). Manager provides specific catalysts and timeframes.
Growth Outlook
Manager expresses strong bullish sentiment on cannabis opportunities, stating 'we remain as bullish as ever' and calling it 'a wonderful time to invest in cannabis.' Sees tremendous opportunity in market inefficiencies and declining institutional competition.
Risk Appetite
Portfolio maintains concentrated positions with largest holding in Grown Rogue and 11% in private cannabis beverages. Manager shows willingness to make outsized investments like Glass House preferreds, indicating moderate to high risk appetite.
Capital Deployment
No specific information provided about cash level changes or deployment activity during the quarter. Letter focuses on existing positions and forward outlook rather than recent capital allocation decisions.
Forward Guidance
Manager expects 2025 to be a breakout year for Grown Rogue and anticipates busy year for cannabis beverage sector. Expresses confidence in fundamental performance despite macro uncertainty around Trump administration policy.
Language Signal
Language is overwhelmingly positive with terms like 'tremendous opportunity,' 'excited,' 'breakout year,' 'wonderful time to invest,' and 'bullish.' Risk language is minimal and focused on policy uncertainty rather than fundamental concerns.
Perceived Risk
Manager acknowledges uncertainty about Trump administration cannabis policy but frames this as manageable rather than systemic risk. Primary focus is on opportunity rather than downside scenarios, with minimal discussion of potential negative outcomes.
Opportunity Density
Manager sees abundant opportunities across cannabis sector, particularly in beverages growing 100%+ annually and targeting $50 billion potential market. Emphasizes market inefficiencies, declining institutional competition, and multiple portfolio companies breaking out.
Time Horizon
Manager demonstrates multi-year investment horizon with Glass House preferred investment spanning two and half years, focus on long-term cannabis adoption trends, and willingness to hold through volatility. Specific near-term catalysts mentioned but within context of longer-term thesis.
