While an extreme situation – such as the current COVID-19 pandemic – can uncover weaknesses we weren’t aware of in some companies, it also serves to further highlight problems that existed before.
Investor Intelligence: Analysis
Detailed analysis and meaningful insight from industry experts.
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.
Trulieve beats estimates, iAnthus defaults on debt, Harvest in multiple lawsuits & KushCo’s massive reserve for losses
The latest round of cannabis earnings highlight the potential long-term impacts of current conditions, driven by back-to-back crises and other events.
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.
Florida Cannabis Market Update: Demand and market share steady
Consumers in Florida engaged in some pantry stocking of cannabis products a couple of weeks ago, but after last week’s expected decrease in total milligrams sold, demand and market shares held relatively stable this week.
MedMen and Green Growth restructure, Acreage pulls guidance & Canntrust trading halts
It was a week of reckoning for many in the cannabis industry as the coronavirus outbreak has become the straw that broke the cash-challenged camel’s back – or the material adverse change companies are using to change plans made in different times.
Does Acreage’s pull of positive EBITDA guidance signal trouble executing funding plan amid coronavirus?
Abandoning the targets outlined only a month ago on its fourth-quarter call (the transcript is available here) shows how rapidly the COVID-19 situation is affecting Acreage.
Comp tables as of March 30, 2020: Multiples expand as US estimates decline
These comp tables provide a benchmark for private investors to evaluate existing and future investments, a way for companies to judge their own valuations for current and future capital raises as well as a menu for public investors to peruse.
Is MedMen’s restructuring through equitized debt a template for the industry?
MedMen Enterprises is undergoing a slow-motion restructuring of its capital structure and operations in public view as its lenders, led by Gotham Green Partners, equitized the company’s credit facility into something resembling preferred equity.
Florida Cannabis Market Update: Stockpiling for coronavirus?
Florida cannabis total milligrams sold declined week-over-week, but we believe that is a product of panic buying because of coronavirus concerns.
Hexo needs more capital; shareholders to be further diluted
Hexo Corp. (TSX: HEXO) disclosed that it needs to raise an additional CA$23.6 million – at least – just to satisfy cash needs for fiscal 2020, which total CA$105 million.
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