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 stand at 2.0X 2020 sales and 10.3X 2020 EBITDA, up slightly versus last week’s 1.9X and 9.7X, respectively. The average stock price remained flattish.

Canada-focused operators still trade at a premium on sales compared to U.S. operators, despite a smaller market and lower margins, expanding to 5.7X 2020 sales and 13.5X 2020 EBITDA from last week’s 5.0X and 12.0X, respectively.

As noted in our recent Virtual Briefing and shown on slides 20-26 of the deck, consumer stocks bottomed at an average of 2.4X sales and 7.5X EBITDA in the past two market corrections.

This implies risk to multiples for 2020, though for 2021, U.S.-focused operators average only 1.3X sales and 4.8X EBITDA – implying multiple upsides as long as the 2021 estimates do not get cut dramatically.

The average stock price for U.S.-focused vertically integrated operators was flat for the week and remains down 53% year-to-date, while the average for Canadian-focused vertically integrated operators was flat for the week and down 50% year-to-date.

For context, the S&P 500 increased 2% for the week and is down 12% year-to-date.

As we noted in our commentary on the correction, cannabis stocks are “high beta,” meaning they will move more than the market in both good times and bad.

These comp tables provide a benchmark for private investors to evaluate existing and future investments and 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.

Tracking the multiples and estimates over time can show how the returns of the stock are decomposed in changes in expectations (sales and EBITDA estimates) and the cost of capital (i.e., multiples applied to those estimates).

The shares outstanding and net debt levels for most companies have been adjusted for future dilution by including in-the-money warrants, options, convertible debt and shares to be issued in pending acquisitions.

The comp tables organize companies into groups based on the main business model (U.S.-focused vertically integrated operators, Canada-focused vertically integrated operators, hemp/CBD, pharmaceutical and ancillary products and services).

These tables also list the equity market capitalization, enterprise value (EV), sales and EBITDA estimates as well as the EV/sales and EV/EBITDA multiples on those projections.

Everything is converted, calculated into and listed as U.S. dollars.

Nonmeaningful outliers are removed before the averages by group are calculated.

These comp tables compute enterprise value as the greater of market capitalization or market capitalization plus net debt.

This is a middle road. It does not penalize companies that have high gross debt and high gross cash levels, but it also reflects that companies with high net cash levels will be using that cash in their operations.

Are there companies missing from this table? A metric you believe is relevant to include? A feature you’d like to see?

Email us at [email protected] and let us know.

Download the PDF or the sortable excel spreadsheet for more details about each company, including estimates for 2020 and 2021.

Priced as of April 14, 2020.

Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
US-Focused Vertically Integrated Operators
4Front Ventures Corp. FFNTF  $          135  $             181 1.8X 17.2X  $      102 303% 10%
Acreage Holdings ACRGF  $          233  $             233 0.9X n.m.  $      246 58% -3%
Cansortium CNTMF  $             18  $             108 1.1X 4.3X  $        95 215% 27%
Columbia Care CCHWF  $          487  $             487 2.2X n.m.  $      220 184% -6%
Cresco Labs CRLBF-US  $       1,433  $         1,433 2.7X 13.5X  $      521 298% 20%
Curaleaf Holdings CURLF  $       2,832  $         2,914 4.7X 18.6X  $      621 181% 25%
Green Thumb Industries GTBIF  $          740  $             846 1.9X 7.9X  $      440 103% 24%
Harvest Health & Recreation HRVSF  $          330  $             523 2.2X n.m.  $      238 104% 4%
iAnthus Capital Holdings ITHUF  $             31  $             135 0.7X 5.2X  $      197 139% 13%
Liberty Health Sciences LHSIF  $          106  $             108 n.m. n.m.  n.m. n.m. n.m.
Medicine Man Technologies MDCL  $          144  $             203 1.3X 5.2X  $      151 5% 26%
MedMen Enterprises MMNFF  $          377  $             377 1.6X n.m.  $      242 51% -23%
MJardin Group MJARF  $               8  $             145 3.2X 26.0X  $        45 84% 12%
Planet 13 Holdings PLNHF  $          155  $             155 1.7X 5.6X  $        93 47% 29%
Slang Worldwide SLGWF-US  $             27  $               27 n.m. n.m.  n.m. n.m. n.m.
Trulieve Cannabis Corp. TCNNF  $       1,032  $         1,105 2.7X 6.5X  $      408 61% 41%
Vireo Health International VREOF  $             43  $               43 0.5X 3.1X  $        89 203% 16%
Average – US-Focused Vertically Integrated Operators  $          478  $             531 2.0X 10.3X  $      247 136% 14%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Canada-Focused Vertically Integrated Operators
48North Cannabis Corp. NCNNF  $             18  $               18 0.9X n.m.  $        21 152% -11%
Aphria APHA-TSE  $          981  $         1,007 2.2X 22.5X  $      453 51% 10%
Aurora Cannabis ACB  $       1,020  $         1,318 5.1X n.m.  $      256 30% -23%
Auxly Cannabis Group XLY-CNQ  $          151  $             155 6.3X n.m.  $        25 461% -38%
Canopy Growth Corp. CGC  $       5,754  $         5,754 12.3X n.m.  $      467 68% -42%
Cronos Group CRON  $       2,252  $         2,252 36.8X n.m.  $        61 158% -105%
Emerald Health Therapeutics EMHTF  $             22  $               38 n.m. n.m.  n.m. n.m. n.m.
Flowr Corp. FLWPF  $             39  $               39 0.8X n.m.  $        47 876% -7%
The Green Organic Dutchman Holdings TGODF  $             55  $               55 2.4X n.m.  $        23 180% -69%
GTEC Holdings GTEC-TSX  $             11  $               15 n.m. n.m.  n.m. n.m. n.m.
Harvest One Cannabis HRVOF  $               8  $               10 0.7X n.m.  $        14 55% -52%
Hexo Corp. HEXO  $          170  $             172 2.4X n.m.  $        73 68% -31%
Organigram Holdings OGI  $          269  $             289 2.7X 11.5X  $      108 53% 23%
Tilray TLRY  $          979  $         1,175 4.8X n.m.  $      243 45% -28%
Village Farms International VFF  $          155  $             230 1.2X 15.7X  $      188 3% 8%
WeedMD WMD-CA  $             57  $               77 1.0X 4.3X  $        80 323% 22%
Average – Canada-Focused Vertically Int. Ops.  $          746  $             788 5.7X 13.5X  $      147 180% -25%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Hemp / CBD
cbdMD YCBD  $             52  $               52 0.8X n.m.  $        65 109% -5%
Charlotte’s Web Holdings CWBHF  $          536  $             536 3.5X n.m.  $      153 39% -8%
CV Sciences CVSI  $             72  $               72 2.3X n.m.  $        32 -41% -26%
Elixinol Global ELLXF  $             33  $               33 1.8X n.m.  $        19 4% -53%
Emerald Health Therapeutics EMHTF  $             22  $               38 n.m. n.m.  n.m. n.m. n.m.
Green Growth Brands GGBXF  $             20  $             120 1.0X n.m.  $      122 167% -17%
Neptune Wellness Solutions NEPT-CA  $          192  $             192 3.6X n.m.  $        53 148% 2%
Average – Hemp / CBD  $          133  $             149 2.2X n.m.  $        74 71% -18%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Pharmaceutical
Arena Pharmaceuticals ARNA  $       2,585  $         2,585 n.m. n.m.  $         7 -99% n.m.
Cara Therapeutics CARA  $          683  $             683 35.2X n.m.  $        19 -2% n.m.
Corbus Pharmaceuticals Holdings CRBP  $          445  $             445 36.3X n.m.  $        12 -66% n.m.
GW Pharmaceuticals GWPH  $       3,036  $         3,036 5.7X n.m.  $      530 70% -5%
MediPharm Labs Corp. MEDIF  $          174  $             174 1.9X 10.5X  $        92 1% 18%
Ultragenyx Pharmaceutical RARE  $       3,511  $         3,511 19.6X n.m.  $      179 73% n.m.
Zynerba Pharmaceuticals ZYNE  $             96  $               96 n.m. n.m.  $        – n.m. n.m.
Average – Pharmaceutical  $       1,504  $         1,504 19.7X 10.5X  $      120 -4% 7%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Ancillary Products & Services
Akerna Corp. KERN  $          111  $             111 5.2X n.m.  $        21 69% -51%
Canopy Rivers CNPOF  $          108  $             108 3.6X 6.5X  $        30 129% 55%
Greenlane Holdings GNLN  $             77  $               77 0.6X n.m.  $      135 -27% -8%
GrowGeneration Corp. GRWG  $          184  $             184 1.4X 14.4X  $      133 67% 10%
Innovative Industrial Properties IIPR  $       1,275  $         1,095 10.2X 11.6X  $      108 141% 88%
KushCo Holdings KSHB  $             81  $               91 0.6X n.m.  $      149 3% -13%
MediPharm Labs Corp. LABS-CA  $          173  $             173 1.9X 10.4X  $        92 1% 18%
New Age Beverages Corp. NBEV  $          143  $             164 0.6X n.m.  $      257 1% -8%
Scotts Miracle-Gro Co. SMG  $       6,471  $         8,642 2.5X 14.6X  $    3,401 6% 17%
Supreme Cannabis Co. FIRE-CA  $             76  $             143 2.4X n.m.  $        59 73% -4%
The Valens Co. VGWCF  $          242  $             242 2.0X 4.8X  $      122 144% 41%
Average – Ancillary Products & Services  $          813  $         1,003 2.8X 10.4X  $      410 55% 13%

 

Cannabis Special Purpose Acquisition Corporations
Name Ticker Exchange
Merida Merger Corp. I MCMJ Nasdaq
Greenrose Acquisition Corp. GNRSU Nasdaq
Stable Road Acquisition Corp. SRACU Nasdaq
Silver Spike Acquisition Corp. SSPKU Nasdaq
Tuscan Holdings Corp. II THCA Nasdaq
Tuscan Holdings Corp. THCB Nasdaq
New Providence Acquisition Corp. NPAUU Nasdaq
Act II Global Acquisition Corp. ACTT Nasdaq
Subversive Real Estate Acquisition REIT SVX.UT-NEOE NEO
Collective Growth Corp. CGROU Nasdaq

Source: FactSet financial data and analytics, company filings and Investor Intelligence analysis.