Comp Tables as of March 9, 2020: Stocks drop 22% on average, compressing multiples further

Average trading multiples for U.S.-focused operators compressed to 2.0X 2020 sales and 9.9X 2020 EBITDA from last week’s 2.2X and 11.9X, respectively.

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 3.9X 2020 sales and 8.8X 2020 EBITDA from last week’s 4.6X and 12.1X, respectively.

The large compression in the Canadian multiple is due to Harvest One dropping off the table with a shift to negative EBITDA for 2020, removing last week’s 17.5X.

The declines in stock prices also compressed multiples. The average decline for U.S.-focused vertically integrated operators is 19% for the week and 43% year to date, while the average decline for the Canadian-focused vertically integrated operators is 24% for the week and 48% year to date.

For context, the S&P 500 declined 12.3% for the week and 14.8% year to date.

We have also added a list of cannabis-focused special purpose acquisition companies (SPAC or “blank-check companies”). These are publicly traded equities of shell companies with only a management team and capital that are looking to acquire companies operating in the cannabis sector.

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 spreadsheet for more details about each company, including estimates for 2020 and 2021.

Priced as of March 9, 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  $          174  $             219 1.9X 10.9X  $        118 153% 17%
Acreage Holdings Inc. ACRGF  $          525  $             525 1.7X 35.7X  $        311 100% 5%
Cansortium Inc. CNTMF  $             23  $             112 1.2X 4.5X  $         95 215% 27%
Columbia Care Inc. CCHWF  $          755  $             755 2.3X 11.4X  $        327 296% 20%
Cresco Labs Inc. CRLBF-US  $       1,969  $         1,969 3.7X 16.4X  $        529 303% 23%
Curaleaf Holdings Inc. CURLF  $       3,830  $         3,913 4.4X 16.1X  $        884 288% 28%
Green Thumb Industries Inc. GTBIF  $       1,405  $         1,466 3.1X 12.2X  $        471 117% 26%
Harvest Health & Recreation Inc. HRVSF  $       1,045  $         1,343 2.1X 9.8X  $        634 430% 22%
iAnthus Capital Holdings Inc. ITHUF  $          146  $             250 1.1X 6.8X  $        234 168% 16%
Liberty Health Sciences Inc. LHSIF  $          138  $             141 n.m. n.m.  n.m. n.m. n.m.
Medicine Man Technologies Inc. MDCL  $          158  $             266 1.8X 6.8X  $        151 5% 26%
MedMen Enterprises Inc. MMNFF  $          155  $             654 2.6X n.m.  $        252 53% -18%
MJardin Group Inc. MJARF  $               8  $             145 3.1X 24.9X  $          47 84% 12%
Planet 13 Holdings Inc. PLNHF  $          253  $             253 2.7X 9.2X  $          93 46% 29%
SLANG Worldwide Inc. SLGWF-US  $             47  $               47 0.4X 2.3X  $        121 375% 17%
Trulieve Cannabis Corp. TCNNF  $       1,034  $         1,107 2.8X 7.1X  $        395 58% 40%
Vireo Health International Inc. VREOF  $             72  $               72 0.8X 5.0X  $          93 203% 16%
Average – US-Focused Vertically Integrated Operators  $          690  $             779 2.2X 11.9X  $        297 181% 19%
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  $             33  $               33 1.6X n.m.  $           21 154% -11%
Aphria Inc. APHA-TSE  $          931  $             944 2.0X 19.4X  $        475 53% 10%
Aurora Cannabis Inc. ACB  $       1,738  $         2,028 7.7X n.m.  $        264 32% -23%
Auxly Cannabis Group Inc. XLY-CNQ  $          205  $             209 3.4X n.m.  $           62 n.m. -9%
CannTrust Holdings Inc. TRST-CA  $          118  $             118 n.m. n.m.  n.m. n.m. n.m.
Canopy Growth Corp. CGC  $       6,957  $         6,957 14.5X n.m.  $        479 71% -41%
Cronos Group Inc. CRON  $       2,227  $         2,227 19.6X n.m.  $        113 221% -34%
Emerald Health Therapeutics Inc. EMHTF  $             28  $               44 1.1X n.m.  $           39 87% -15%
Flowr Corp. FLWPF  $             40  $               40 0.7X n.m.  $           56 992% -8%
Green Organic Dutchman Holdings Ltd. TGODF  $             96  $               96 1.7X n.m.  $           55 585% -21%
GTEC Holdings Ltd. GTEC-TSX  $             11  $               16 n.m. n.m.  n.m. n.m. n.m.
Harvest One Cannabis Inc. HRVOF  $             11  $               11 0.3X 17.5X  $           36 151% 2%
HEXO Corp. HEXO  $          305  $             305 3.6X n.m.  $           85 84% -32%
OrganiGram Holdings Inc. OGI  $          381  $             400 3.4X 12.8X  $        119 63% 26%
Tilray Inc. TLRY  $       1,736  $         2,015 7.6X n.m.  $        267 60% -21%
Village Farms International Inc. VFF  $          223  $             297 1.3X 6.0X  $        235 24% 21%
WeedMD Inc. WMD-CA  $             67  $               88 1.1X 5.0X  $           82 281% 22%
Average – Canada-Focused Vertically Int. Ops.  $          889  $             931 4.6X 12.1X  $        159 204% -9%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Hemp / CBD
cbdMD Inc. YCBD  $             48  $               48 0.7X n.m.  $           65 109% -5%
Charlotte’s Web Holdings Inc. CWBHF  $          504  $             504 3.4X 27.4X  $        146 48% 13%
CV Sciences Inc. CVSI  $             73  $               73 1.0X 8.3X  $           71 28% 12%
Elixinol Global Ltd. ELLXF  $             29  $               29 1.5X n.m.  $           19 8% -53%
Emerald Health Therapeutics Inc. EMHTF  $             28  $               44 n.m. n.m.  n.m. n.m. n.m.
Green Growth Brands Inc. GGBXF  $             52  $             151 1.2X n.m.  $        126 169% -17%
Neptune Wellness Solutions Inc. NEPT-CA  $          158  $             158 2.5X n.m.  $           63 181% -2%
Average – Hemp / CBD  $          127  $             144 1.7X 17.9X  $           82 90% -9%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Pharmaceutical
Arena Pharmaceuticals Inc. ARNA  $       2,248  $         2,248 n.m. n.m.  $             7 -99% n.m.
Cara Therapeutics Inc. CARA  $          647  $             647 33.3X n.m.  $           19 -2% n.m.
Corbus Pharmaceuticals Holdings Inc. CRBP  $          300  $             300 33.5X n.m.  $             9 -76% n.m.
GW Pharmaceuticals Plc GWPH  $       2,679  $         2,679 5.0X n.m.  $        536 72% -4%
MediPharm Labs Corp. MEDIF  $          204  $             204 1.5X 5.5X  $        138 40% 27%
Ultragenyx Pharmaceutical Inc. RARE  $       2,727  $         2,727 15.2X n.m.  $        180 73% n.m.
Zynerba Pharmaceuticals Inc. ZYNE  $             80  $               80 n.m. n.m.  $            – n.m. n.m.
Average – Pharmaceutical  $       1,269  $         1,269 17.7X 5.5X  $        127 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  $             65  $               65 3.1X n.m.  $           21 69% -51%
Canopy Rivers Inc. CNPOF  $          102  $             102 3.3X 5.9X  $           31 133% 55%
Greenlane Holdings Inc. GNLN  $             68  $               68 0.4X n.m.  $        174 -6% -2%
GrowGeneration Corp. GRWG  $          167  $             167 1.2X 11.4X  $        137 72% 11%
Innovative Industrial Properties Inc. IIPR  $       1,387  $         1,201 10.4X 12.1X  $        115 159% 86%
KushCo Holdings Inc. KSHB  $          102  $             113 0.5X n.m.  $        242 42% -1%
MediPharm Labs Corp. LABS-CA  $          204  $             204 1.5X 5.5X  $        138 40% 27%
New Age Beverages Corp. NBEV  $          133  $             147 0.5X n.m.  $        295 13% -1%
Scotts Miracle-Gro Co. SMG  $       6,360  $         8,530 2.5X 14.5X  $     3,353 5% 18%
Supreme Cannabis Co. Inc. FIRE-CA  $             65  $             132 2.2X n.m.  $           61 72% -4%
Valens GroWorks Corp. VGWCF  $          280  $             280 2.1X 5.0X  $        131 158% 43%
Average – Ancillary Products & Services  $          812  $         1,001 2.5X 9.1X  $        427 69% 16%

 

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.