How to assess marijuana deals without traditional metrics

(This story is part of MJBizDaily’s premium subscription service, Investor Intelligence.)

Cannabis companies are issuing equity, debt and warrants for acquisitions at a rapid pace right now, moves that require answers to key questions for keen investors.

  • Do the deals provide management an opportunity to create or destroy shareholder value?
  • Are the deals accretive or dilutive to your ownership stake?

Those questions can be difficult to answer when there are scant traditional financial metric details such as EBITDA, EPS or free cash flow to analyze.

But there are two quick methods to get your arms around deal economics with just some basic financial information:

  • Return on capital (ROC).
  • EBITDA per share.

Read more about how to apply these assessments to cannabis deals at Investor Intelligence.

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