Comp Tables as of March 16, 2020: Market swoon compresses multiples

Average trading multiples for U.S.-focused operators compressed to 1.6X 2020 sales and 7.1X 2020 EBITDA from last week’s 2.0X and 9.9X, respectively, as markets in general collapsed on recession and coronavirus fears.

Canada-focused operators still trade at a premium on sales compared to U.S. operators, despite a smaller market and lower margins, with the multiple compressing to 3.5X 2020 sales and 7.7X 2020 EBITDA from last week’s 3.9X and 8.8X, respectively.

These valuations are actually reasonable for normal industrial and consumer-focused companies.

The average decline for U.S.-focused vertically integrated operators is 22% for the week and 59% year to date, while the average decline for the Canadian-focused vertically integrated operators is 16% for the week and 57% year to date.

For context, the S&P 500 declined 13% for the week and 26% year to date.

This week, we added some new features to our comp tables:

  • We are including both the “reported” fully diluted shares outstanding and market capitalization alongside our Investor Intelligence pro forma fully diluted share counts. The differences highlight the adjustments made and the dramatic divergences that some companies face due to subsequent offerings, warrants and pending deals.
  • We added the stock performance of both cannabis stocks and the broader markets (large cap S&P 500, small cap Russell 2000 and tech-focused Nasdaq Composite). This will give investors a sense of which stocks are down the most and provide context within the broader market declines.

As we noted last week in commenting 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 for more details about each company, including estimates for 2020 and 2021. We are updating the code for the sortable spreadsheet and will have a new version available soon.

Priced as of March 16, 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  $          142  $             187 n.m. n.m.  n.m. n.m. n.m.
Acreage Holdings ACRGF  $          237  $             237 0.8X n.m.  $      289 86% 1%
Cansortium CNTMF  $             13  $             103 1.1X 4.1X  $        95 215% 27%
Columbia Care CCHWF  $          435  $             435 2.0X n.m.  $      223 187% -5%
Cresco Labs CRLBF-US  $       1,122  $         1,122 2.1X 9.3X  $      536 308% 22%
Curaleaf Holdings CURLF  $       2,488  $         2,570 2.9X 10.0X  $      901 300% 28%
Green Thumb Industries GTBIF  $          849  $             910 1.9X 7.5X  $      470 116% 26%
Harvest Health & Recreation HRVSF  $          391  $             584 1.0X 4.7X  $      597 399% 21%
iAnthus Capital Holdings ITHUF  $             62  $             165 0.7X 4.2X  $      235 168% 17%
Liberty Health Sciences LHSIF  $             97  $             100 n.m. n.m.  n.m. n.m. n.m.
Medicine Man Technologies MDCL  $          117  $             226 1.5X 5.7X  $      151 5% 26%
MedMen Enterprises MMNFF  $             78  $             577 2.4X n.m.  $      242 51% -23%
MJardin Group MJARF  $               6  $             144 3.2X 25.7X  $        45 84% 12%
Planet 13 Holdings PLNHF  $          128  $             128 1.4X 4.7X  $        93 46% 29%
Slang Worldwide SLGWF-US  $             36  $               36 0.3X 1.8X  $      115 375% 17%
Trulieve Cannabis Corp. TCNNF  $          684  $             757 1.9X 4.8X  $      395 58% 40%
Vireo Health International VREOF  $             30  $               30 0.3X 2.2X  $        89 203% 16%
Average – US-Focused Vertically Integrated Operators  $          407  $             489 1.6X 7.1X  $      299 173% 17%
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  $             23  $               23 1.1X n.m.  $        21 152% -11%
Aphria APHA-TSE  $          580  $             607 1.3X 12.9X  $      456 52% 10%
Aurora Cannabis ACB  $          952  $         1,251 4.7X n.m.  $      264 33% -22%
Auxly Cannabis Group XLY-CNQ  $          116  $             120 2.0X n.m.  $        59 n.m. -9%
CannTrust Holdings TRST-CA  $             85  $               85 n.m. n.m.  n.m. n.m. n.m.
Canopy Growth Corp. CGC  $       3,841  $         3,841 8.0X n.m.  $      481 72% -41%
Cronos Group CRON  $       2,019  $         2,019 17.9X n.m.  $      113 223% -38%
Emerald Health Therapeutics EMHTF  $             21  $               37 n.m. n.m.  n.m. n.m. n.m.
Flowr Corp. FLWPF  $             28  $               28 0.5X n.m.  $        53 992% -8%
The Green Organic Dutchman Holdings TGODF  $             65  $               65 2.9X n.m.  $        23 180% -69%
GTEC Holdings GTEC-TSX  $               7  $               12 n.m. n.m.  n.m. n.m. n.m.
Harvest One Cannabis HRVOF  $               6  $                 8 0.6X n.m.  $        14 54% -52%
Hexo Corp. HEXO  $          211  $             211 2.5X n.m.  $        85 84% -33%
Organigram Holdings OGI  $          270  $             290 2.4X 9.4X  $      119 62% 26%
Tilray TLRY  $          366  $             676 2.7X n.m.  $      250 50% -27%
Village Farms International VFF  $          144  $             219 0.9X 4.5X  $      232 23% 21%
WeedMD WMD-CA  $             48  $               69 0.9X 3.9X  $        80 323% 22%
Average – Canada-Focused Vertically Int. Ops.  $          517  $             562 3.5X 7.7X  $      161 177% -16%

 

Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Hemp / CBD
cbdMD YCBD  $             35  $               35 0.5X n.m.  $           65 109% -5%
Charlotte’s Web Holdings CWBHF  $          373  $             373 2.5X 20.3X  $        146 48% 13%
CV Sciences CVSI  $             56  $               56 0.9X 6.4X  $           61 13% 14%
Elixinol Global ELLXF  $             28  $               28 1.5X n.m.  $           18 0% -53%
Emerald Health Therapeutics EMHTF  $             21  $               37 n.m. n.m.  n.m. n.m. n.m.
Green Growth Brands GGBXF  $             28  $             128 1.0X n.m.  $        122 167% -17%
Neptune Wellness Solutions NEPT-CA  $          105  $             105 1.7X n.m.  $           61 179% -2%
Average – Hemp / CBD  $             92  $             109 1.4X 13.3X  $           79 86% -8%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Pharmaceutical
Arena Pharmaceuticals ARNA  $       1,854  $         1,854 n.m. n.m.  $             7 -99% n.m.
Cara Therapeutics CARA  $          463  $             463 23.9X n.m.  $           19 -2% n.m.
Corbus Pharmaceuticals Holdings CRBP  $          246  $             246 28.3X n.m.  $             9 -76% n.m.
GW Pharmaceuticals GWPH  $       2,227  $         2,227 4.2X n.m.  $        536 72% -4%
MediPharm Labs Corp. MEDIF  $          139  $             139 1.0X 3.8X  $        134 40% 27%
Ultragenyx Pharmaceutical RARE  $       2,019  $         2,019 11.2X n.m.  $        180 73% n.m.
Zynerba Pharmaceuticals ZYNE  $             70  $               70 n.m. n.m.  $            – n.m. n.m.
Average – Pharmaceutical  $       1,002  $         1,002 13.7X 3.8X  $        126 1% 11%
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  $             61  $               61 2.9X n.m.  $           21 69% -51%
Canopy Rivers CNPOF  $          105  $             105 3.5X 6.3X  $           30 129% 55%
Greenlane Holdings GNLN  $             51  $               51 0.3X n.m.  $        174 -6% -2%
GrowGeneration Corp. GRWG  $          114  $             114 0.8X 7.8X  $        137 72% 11%
Innovative Industrial Properties IIPR  $          949  $             768 6.8X 8.1X  $        113 154% 84%
KushCo Holdings KSHB  $             58  $               69 0.4X n.m.  $        194 26% -6%
MediPharm Labs Corp. LABS-CA  $          135  $             135 1.0X 3.7X  $        134 40% 27%
New Age Beverages Corp. NBEV  $             95  $             109 0.4X n.m.  $        271 7% -5%
Scotts Miracle-Gro Co. SMG  $       5,169  $         7,339 2.2X 12.4X  $     3,375 5% 17%
Supreme Cannabis Co. FIRE-CA  $             49  $             116 2.0X n.m.  $           59 73% -4%
The Valens Co. VGWCF  $          198  $             198 1.6X 3.6X  $        127 151% 43%
Average – Ancillary Products & Services  $          635  $             824 2.0X 7.0X  $        421 66% 15%

 

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.