Average trading multiples for U.S.-focused operators expanded to 1.9X 2020 sales and 10.1X 2020 EBITDA from last week’s 1.7X and 8.1X, respectively, because of a decline in estimates as the average stock price was flattish.
Canada-focused operators still trade at a premium on sales compared to U.S. operators, despite a smaller market and lower margins, but they now trade in line on EBITDA at 4.5X 2020 sales and 10.2X 2020 EBITDA, compared with last week’s 3.5X and 8.1X, respectively.
The only problem with saying they trade in line is that most of the Canadian operators don’t have positive EBITDA to even calculate the multiple – supporting our contention that U.S.-focused operators are fundamentally more attractive.
Twelve of the 17 U.S. operators on our sheet have an EBITDA multiple for 2020, while only three of the 16 Canadian operators have a multiple.
While these valuations are low compared to past weeks, they are reasonable for normal industrial- and consumer-focused companies.
The average stock price for U.S.-focused vertically integrated operators was flat for the week and remains down 48% year to date, while the average for Canadian-focused vertically integrated operators increased 13% for the week and remains down 46% year to date.
For context, the S&P 500 increased 6% for the week and is down 19% year to date.
This week, we removed CannTrust because it is halted indefinitely and its multiples fall into the “not meaningful” category. This removal will improve the performance metrics of the stock prices.
We also updated MedMen for its recapitalization and have assumed it will raise another $50 million through the credit facility. We also assumed Hexo will raise the CA$40 million in equity as required by its credit facility.
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 investorintelligence@mjbizdaily.com 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 March 30, 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 | $ 166 | $ 211 | 2.1X | 20.1X | $ 102 | 303% | 10% |
| Acreage Holdings | ACRGF | $ 327 | $ 327 | 1.1X | n.m. | $ 289 | 86% | 1% |
| Cansortium | CNTMF | $ 14 | $ 103 | 1.1X | 4.1X | $ 95 | 215% | 27% |
| Columbia Care | CCHWF | $ 491 | $ 491 | 2.2X | n.m. | $ 220 | 184% | -6% |
| Cresco Labs | CRLBF-US | $ 1,391 | $ 1,391 | 2.7X | 13.1X | $ 521 | 298% | 20% |
| Curaleaf Holdings | CURLF | $ 3,042 | $ 3,124 | 4.1X | 19.4X | $ 764 | 246% | 21% |
| Green Thumb Industries | GTBIF | $ 784 | $ 890 | 2.0X | 8.2X | $ 441 | 104% | 25% |
| Harvest Health & Recreation | HRVSF | $ 387 | $ 580 | 2.2X | 11.8X | $ 269 | 126% | 18% |
| iAnthus Capital Holdings | ITHUF | $ 96 | $ 200 | 0.9X | 6.5X | $ 220 | 153% | 14% |
| Liberty Health Sciences | LHSIF | $ 117 | $ 119 | n.m. | n.m. | n.m. | n.m. | n.m. |
| Medicine Man Technologies | MDCL | $ 135 | $ 195 | 1.3X | 5.0X | $ 151 | 5% | 26% |
| MedMen Enterprises | MMNFF | $ 514 | $ 514 | 2.1X | n.m. | $ 242 | 51% | -23% |
| MJardin Group | MJARF | $ 8 | $ 145 | 3.3X | 26.4X | $ 44 | 84% | 12% |
| Planet 13 Holdings | PLNHF | $ 139 | $ 139 | 1.5X | 5.1X | $ 93 | 46% | 29% |
| Slang Worldwide | SLGWF-US | $ 34 | $ 34 | 0.3X | 1.8X | $ 114 | 375% | 17% |
| Trulieve Cannabis Corp. | TCNNF | $ 988 | $ 1,060 | 2.7X | 6.8X | $ 397 | 58% | 39% |
| Vireo Health International | VREOF | $ 51 | $ 51 | 0.6X | 3.8X | $ 88 | 203% | 16% |
| Average – US-Focused Vertically Integrated Operators | $ 511 | $ 563 | 1.9X | 10.1X | $ 253 | 159% | 15% | |
| 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 | $ 20 | $ 20 | 1.0X | n.m. | $ 20 | 151% | -11% |
| Aphria | APHA-TSE | $ 818 | $ 849 | 1.9X | 18.2X | $ 454 | 53% | 10% |
| Aurora Cannabis | ACB | $ 1,178 | $ 1,478 | 5.7X | n.m. | $ 261 | 32% | -22% |
| Auxly Cannabis Group Inc. | XLY-CNQ | $ 156 | $ 160 | 2.7X | n.m. | $ 59 | n.m. | -9% |
| Canopy Growth Corp. | CGC | $ 5,403 | $ 5,403 | 11.3X | n.m. | $ 477 | 71% | -41% |
| Cronos Group | CRON | $ 2,379 | $ 2,379 | 22.7X | n.m. | $ 105 | 341% | -39% |
| Emerald Health Therapeutics | EMHTF | $ 28 | $ 44 | n.m. | n.m. | n.m. | n.m. | n.m. |
| Flowr Corp. | FLWPF | $ 40 | $ 40 | 0.8X | n.m. | $ 47 | 870% | -7% |
| The Green Organic Dutchman Holdings | TGODF | $ 60 | $ 60 | 2.7X | n.m. | $ 22 | 176% | -69% |
| GTEC Holdings | GTEC-TSX | $ 9 | $ 12 | n.m. | n.m. | n.m. | n.m. | n.m. |
| Harvest One Cannabis | HRVOF | $ 11 | $ 12 | 0.9X | n.m. | $ 14 | 53% | -52% |
| Hexo Corp. | HEXO | $ 253 | $ 253 | 3.4X | n.m. | $ 74 | 70% | -32% |
| Organigram Holdings | OGI | $ 342 | $ 363 | 3.1X | 11.7X | $ 118 | 61% | 26% |
| Tilray | TLRY | $ 919 | $ 1,116 | 4.5X | n.m. | $ 246 | 47% | -28% |
| Village Farms International | VFF | $ 175 | $ 250 | 1.2X | 6.1X | $ 217 | 19% | 19% |
| WeedMD | WMD-CA | $ 61 | $ 82 | 1.0X | 4.6X | $ 79 | 323% | 22% |
| Average – Canada-Focused Vertically Int. Ops. | $ 741 | $ 782 | 4.5X | 10.2X | $ 157 | 175% | -17% | |
| Name | Ticker | Market Cap | Enterprise Value | EV/Sales 2020E | EV/EBITDA 2020E | Sales 2020E | Sales Growth 2020E | EBITDA Margin 2020E |
| Hemp / CBD | ||||||||
| cbdMD | YCBD | $ 51 | $ 51 | 0.8X | n.m. | $ 65 | 109% | -5% |
| Charlotte’s Web Holdings | CWBHF | $ 530 | $ 530 | 3.5X | n.m. | $ 152 | 39% | -8% |
| CV Sciences | CVSI | $ 74 | $ 74 | 2.3X | n.m. | $ 32 | -41% | -26% |
| Elixinol Global | ELLXF | $ 24 | $ 24 | 1.3X | n.m. | $ 18 | 0% | -53% |
| Emerald Health Therapeutics | EMHTF | $ 28 | $ 44 | n.m. | n.m. | n.m. | n.m. | n.m. |
| Green Growth Brands | GGBXF | $ 33 | $ 133 | 1.1X | n.m. | $ 120 | 167% | -17% |
| Neptune Wellness Solutions | NEPT-CA | $ 113 | $ 113 | 1.9X | n.m. | $ 60 | 178% | -2% |
| Average – Hemp / CBD | $ 122 | $ 138 | 1.8X | n.m. | $ 74 | 75% | -19% | |
| Name | Ticker | Market Cap | Enterprise Value | EV/Sales 2020E | EV/EBITDA 2020E | Sales 2020E | Sales Growth 2020E | EBITDA Margin 2020E |
| Pharmaceutical | ||||||||
| Arena Pharmaceuticals | ARNA | $ 2,196 | $ 2,196 | n.m. | n.m. | $ 7 | -99% | n.m. |
| Cara Therapeutics | CARA | $ 621 | $ 621 | 32.0X | n.m. | $ 19 | -2% | n.m. |
| Corbus Pharmaceuticals Holdings | CRBP | $ 404 | $ 404 | 33.0X | n.m. | $ 12 | -66% | n.m. |
| GW Pharmaceuticals | GWPH | $ 2,617 | $ 2,617 | 4.9X | n.m. | $ 536 | 72% | -4% |
| MediPharm Labs Corp. | MEDIF | $ 160 | $ 160 | 1.6X | 8.3X | $ 98 | 8% | 20% |
| Ultragenyx Pharmaceutical | RARE | $ 2,647 | $ 2,647 | 14.7X | n.m. | $ 180 | 73% | n.m. |
| Zynerba Pharmaceuticals | ZYNE | $ 86 | $ 86 | n.m. | n.m. | $ – | n.m. | n.m. |
| Average – Pharmaceutical | $ 1,247 | $ 1,247 | 17.2X | 8.3X | $ 122 | -2% | 8% | |
| 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 | $ 72 | $ 72 | 3.4X | n.m. | $ 21 | 69% | -51% |
| Canopy Rivers | CNPOF | $ 115 | $ 115 | 3.9X | 7.0X | $ 30 | 127% | 55% |
| Greenlane Holdings | GNLN | $ 83 | $ 83 | 0.6X | n.m. | $ 135 | -27% | -8% |
| GrowGeneration Corp. | GRWG | $ 171 | $ 171 | 1.3X | 13.4X | $ 133 | 67% | 10% |
| Innovative Industrial Properties | IIPR | $ 1,337 | $ 1,158 | 10.7X | 12.3X | $ 108 | 141% | 88% |
| KushCo Holdings | KSHB | $ 82 | $ 93 | 0.6X | n.m. | $ 169 | 14% | -8% |
| MediPharm Labs Corp. | LABS-CA | $ 157 | $ 157 | 1.6X | 8.2X | $ 98 | 8% | 20% |
| New Age Beverages Corp. | NBEV | $ 118 | $ 139 | 0.5X | n.m. | $ 257 | 1% | -8% |
| Scotts Miracle-Gro Co. | SMG | $ 6,035 | $ 8,205 | 2.4X | 13.9X | $ 3,401 | 6% | 17% |
| Supreme Cannabis Co. | FIRE-CA | $ 74 | $ 141 | 2.4X | n.m. | $ 58 | 72% | -4% |
| The Valens Co. | VGWCF | $ 226 | $ 226 | 1.8X | 4.2X | $ 125 | 149% | 43% |
| Average – Ancillary Products & Services | $ 770 | $ 960 | 2.7X | 9.8X | $ 412 | 57% | 14% | |
| 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.
