No longer applying Section 280E of the Internal Revenue Code to the legal cannabis industry would be a big benefit to companies and investors, right?
Yes, but not in the way most investors expect.
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What marijuana investors can learn from GameStop trading frenzy
Last week’s meteoric rise of GameStop’s shares made headlines, but what should be made of it? And what can we learn from it for marijuana? What happened with GameStop is a short squeeze. The same thing happened to Tilray in 2018, Volkswagen in 2008 and supermarket operator Piggly Wiggly in the 1920s. While it is possible to […]
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Cannabis firm Weedmaps aims for 175% revenue growth via higher ad prices, wider footprint
Cannabis advertising giant Weedmaps hopes to boost its revenue over the next three years by a whopping 175% – and investors are wagering the California-based company can deliver on that goal. Since announcing its acquisition of Weedmaps on Dec. 10, Silver Spike Acquisition Corp. has seen its shares more than double, resulting in a Weedmaps […]
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Post-election marijuana stock price moves show benefit of public liquidity
While marijuana legalization was a major winner in the U.S. general election, Canadian firms appear to be reveling in the post-election boost more than U.S. cannabis companies.
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Before election, focus on fundamentals, not emotions, in cannabis investing
Since we last looked at the performance of U.S. and Canadian operators on July 10, publicly traded cannabis companies have seen some interesting stock price trends as candidates running for the top offices in the U.S. take positions on marijuana reform. For a week in October, sentiment improved and cannabis stocks rallied on four words […]
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Cannabis companies with specific plans for new funding find success at raising capital
Capital markets remain very tight, but they started to open up again for marijuana companies in the third quarter of 2020, as shown in Viridian Capital Advisors’ deal tracker. Yet demand remains much greater than the supply of available funding, driven by the capital intensity of the industry and the limited participation by most institutional […]
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US marijuana companies outperform Canada’s to erase discount in second-quarter earnings season
The stocks of U.S.-focused operators have rallied while Canada-focused operators have underperformed in the second-quarter earnings season, closing the valuation gap on enterprise value-to-2021 sales. The rally in the United States bodes well for the thawing of the capital markets for U.S. operators – at least for those that can show strong and profitable revenue […]
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Tight capital markets – worsened by COVID-19 – derail Schwazze’s cannabis acquisitions
Already struggling capital markets further tightened by the coronavirus, a declining stock price and an improving legalization outlook for cannabis have combined to derail five of the 10 planned deals in Schwazze’s strategy to consolidate the Colorado market. While COVID-19 actually has improved the long-term investment case for the marijuana industry after state governments deemed […]
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As cannabis investor reset continues, estimates at risk of further cuts in 2Q earnings season
Though revenue and profit estimates for the cannabis industry have declined, the upcoming second-quarter earnings season brings the risk of further estimate cuts. California-based KushCo Holdings might be a forewarning for the industry given that it already reported its financials for the quarter that ended in May and supplies many larger cannabis companies. KushCo’s results […]
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Comp tables as of April 14, 2020: US multiples above consumer troughs for 2020 but down for 2021
Average trading multiples for U.S.-focused operators were up slightly versus last week, while the average stock price remained flattish. Canada-focused operators still trade at a premium on sales compared to U.S. operators.
KushCo reserves legacy customer sales, highlights pending write-off risk for sector
KushCo Holdings is a canary in the coal mine for the cannabis industry with regards to how bad debts are likely to impact profitability in the sector.
Comp tables as of April 7, 2020: US valuations flat, Canada expands
Average trading multiples for U.S.-focused operators were roughly flat versus last week because of a decline in estimates. Canada-focused operators still trade at a premium on sales compared to U.S. operators.