Marijuana Business Magazine February 2020

Mike Regan is an equity research analyst for Investor Intelligence. Reach him at miker@mjbizdaily.com. Craig Behnke is an equity research analyst for Investor Intelligence. Reach him at craigb@mjbizdaily.com EBITDA A major difference where the risk-reward profile clearly favors U.S. companies is EBITDA levels and EBITDA margin. U.S. companies are projected to be slightly EBITDA positive in 2019, unlike the Canadian companies, which collectively are expected to report negative EBITDA. U.S. companies are projected to produce 2019 EBITDA of $64 million (a 5.4%margin) versus Canadian companies at negative-$510 million (-34.9%margin). U.S. operators are clearly much closer to profit than their Canadian counterparts and are estimated to remain much farther ahead for the next couple of years. Consensus estimates call for U.S. companies to produce $1.8 billion of EBITDA in 2021 (30.4% margin) versus the Canadian companies at $351 million of EBITDA (9.5% margin). Total Addressable Market Another major difference between the U.S. and Canadian companies is the estimated size of their addressable market: The U.S. cannabis market dwarfs the Canadian sector. Marijuana Business Daily estimates the 2019 legal cannabis market in the United States at $11.8 billion and growing to approximately $20.6 billion in 2021. That’s compared with Canada’s estimated legal cannabis market of $2.1 billion in 2019 and $3.4 billion in 2021. Simply put, based on current valuations and analyst estimates through 2021, the U.S. integrated operators offer a superior investment risk/reward profile compared to their Canadian counterparts. Accurate. Reliable. Consistent. YOU’RE CONFDIENT. ARE THEY? Specialized Vitamin E Acetate, Glyphosate & Myclobutanil Testing for Vape Products ACSLabCannabis.com Let’s Talk: 877-666-8012