Comp tables as of Jan. 27: Multiple expansion reverses

Investment sentiment is on the rise in the wake of confirmation that MedMen is attempting to pay vendors with equity – leading to further unknown dilution, the potential for a vicious circle and multiple compression as equity holders worry about cash flow.

We have assumed an extra 14 million shares for MedMen assuming the company pays 10% of its $55 million in accounts payable using equity at the current price of $0.39 per share, for 621 million total shares.

Average trading multiples for U.S.-focused operators are 2.7X 2020 sales and 13.4X 2020 EBITDA, down from last week’s 2.9X and 14.4X, respectively.

Canada-focused operators still trade at a premium at 5.3X 2020 sales and 17.1X 2020 EBITDA, down from 6.0X and 18.7X, respectively.

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 and 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 as well as ancillary products and services) and lists the equity market capitalization, enterprise value (EV), sales and EBITDA estimates, and 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.

Prices as of Jan. 27, 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  $          271  $             316 2.7X 15.7X  $        118 153% 17%
Acreage Holdings ACRGF  $          736  $             736 1.9X 21.5X  $        392 143% 9%
Cansortium CNTMF  $             37  $             126 1.3X 5.0X  $           95 215% 27%
Columbia Care CCHWF  $          885  $             885 3.0X 20.0X  $        299 265% 15%
Cresco Labs CRLBF-US  $       2,589  $         2,589 4.6X 20.7X  $        557 324% 22%
Curaleaf Holdings CURLF  $       4,713  $         4,795 5.2X 18.0X  $        928 300% 29%
Green Thumb Industries GTBIF  $       2,039  $         2,100 4.4X 16.8X  $        475 119% 26%
Harvest Health & Recreation HRVSF  $       1,369  $         1,668 2.6X 12.0X  $        634 429% 22%
iAnthus Capital Holdings ITHUF  $          240  $             344 1.4X 8.4X  $        247 177% 17%
Liberty Health Sciences LHSIF  $          175  $             181 n.m. n.m.  n.m. n.m. n.m.
Medicine Man Technologies MDCL  $          251  $             359 2.0X 10.1X  $        179 5% 20%
MedMen Enterprises MMNFF  $          242  $             741 2.6X n.m.  $        285 62% -10%
MJardin Group MJARF  $             10  $             148 3.1X 24.9X  $           48 84% 12%
Planet 13 Holdings PLNHF  $          238  $             238 2.5X 8.7X  $           93 46% 29%
Slang Worldwide SLGWF-US  $             62  $               62 0.5X 3.0X  $        122 375% 17%
Trulieve Cannabis Corp. TCNNF  $       1,197  $         1,270 3.2X 8.0X  $        397 59% 40%
Vireo Health International VREOF  $          129  $             129 1.4X 8.8X  $           94 203% 16%
Average – US-Focused Vertically Integrated Operators  $          893  $             982 2.7X 13.4X  $        310 185% 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  $             47  $               47 1.7X 19.1X  $           28 181% 9%
Aphria APHA-TSE  $       1,303  $         1,307 2.7X 26.2X  $        485 55% 10%
Aurora Cannabis ACB  $       1,954  $         2,303 5.6X n.m.  $        413 72% -4%
Auxly Cannabis Group XLY-CNQ  $          313  $             317 5.0X n.m.  $           63 n.m. -9%
CannTrust Holdings TRST-CA  $          192  $             192 n.m. n.m.  n.m. n.m. n.m.
Canopy Growth Corp. CGC  $       8,055  $         8,055 16.0X n.m.  $        503 80% -42%
Cronos Group CRON  $       2,689  $         2,689 23.0X n.m.  $        117 230% -33%
Emerald Health Therapeutics EMHTF  $             36  $               52 1.3X n.m.  $           39 83% -37%
Flowr Corp. FLWPF  $          158  $             158 2.6X n.m.  $           61 911% -8%
The Green Organic Dutchman Holdings TGODF  $          140  $             140 2.5X n.m.  $           57 592% -21%
GTEC Holdings GTEC-TSX  $             15  $               20 n.m. n.m.  n.m. n.m. n.m.
Harvest One Cannabis HRVOF  $             19  $               19 0.5X 29.5X  $           37 152% 2%
Hexo Corp. HEXO  $          366  $             366 4.1X n.m.  $           88 90% -29%
Organigram Holdings OGI  $          441  $             459 3.8X 14.5X  $        120 64% 26%
Tilray TLRY  $       2,072  $         2,352 7.8X n.m.  $        303 74% -14%
Village Farms International VFF  $          292  $             366 1.4X 6.5X  $        267 39% 21%
WeedMD WMD-CA  $          100  $             121 1.5X 6.7X  $           83 281% 22%
Average – Canada-Focused Vertically Int. Ops.  $       1,070  $         1,115 5.3X 17.1X  $        178 207% -7%

 

Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Hemp / CBD
cbdMD YCBD  $             66  $               66 0.8X n.m.  $           81 135% -3%
Charlotte’s Web Holdings CWBHF  $          832  $             832 5.7X 45.2X  $        147 48% 13%
CV Sciences CVSI  $          125  $             125 1.7X 8.7X  $           75 34% 19%
Elixinol Global ELLXF  $          104  $             104 3.1X n.m.  $           34 31% -26%
Emerald Health Therapeutics EMHTF  $             36  $               52 1.3X n.m.  $           39 83% -37%
Green Growth Brands GGBXF  $          157  $             257 1.3X 21.3X  $        193 265% 6%
Neptune Wellness Solutions NEPT-CA  $          259  $             259 2.8X 11.6X  $           91 235% 25%
Average – Hemp / CBD  $          226  $             242 2.4X 21.7X  $           94 119% -1%
Name Ticker Market Cap Enterprise Value EV/Sales 2020E EV/EBITDA 2020E Sales 2020E Sales Growth 2020E EBITDA Margin 2020E
Pharmaceutical
Arena Pharmaceuticals ARNA  $       2,286  $         2,286 n.m. n.m.  $           11 -99% n.m.
Cara Therapeutics CARA  $          762  $             762 28.7X n.m.  $           27 28% n.m.
Corbus Pharmaceuticals Holdings CRBP  $          446  $             446 49.8X n.m.  $             9 -76% n.m.
GW Pharmaceuticals GWPH  $       3,429  $         3,429 6.3X n.m.  $        542 77% 11%
MediPharm Labs Corp. MEDIF  $          335  $             335 2.0X 7.3X  $        164 54% 28%
Ultragenyx Pharmaceutical RARE  $       3,345  $         3,345 16.9X n.m.  $        198 97% -146%
Zynerba Pharmaceuticals ZYNE  $          121  $             121 n.m. n.m.  $            – n.m. n.m.
Average – Pharmaceutical  $       1,532  $         1,532 20.8X 7.3X  $        136 14% -36%
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  $          116  $             116 4.2X n.m.  $           28 115% -25%
Canopy Rivers CNPOF  $          185  $             185 13.5X 3.1X  $           14 5% 443%
Greenlane Holdings GNLN  $          114  $             114 0.6X n.m.  $        183 -2% -3%
GrowGeneration Corp. GRWG  $          195  $             195 1.4X 13.5X  $        135 68% 11%
Innovative Industrial Properties IIPR  $       1,418  $         1,172 9.8X 11.4X  $        120 197% 85%
KushCo Holdings KSHB  $          200  $             211 0.9X n.m.  $        247 44% -1%
MediPharm Labs Corp. LABS-CA  $          332  $             332 2.0X 7.2X  $        164 54% 28%
New Age Beverages Corp. NBEV  $          141  $             155 0.5X n.m.  $        295 13% -1%
Scotts Miracle-Gro Company Class A SMG  $       6,224  $         7,856 2.4X 13.3X  $     3,329 4% 18%
Supreme Cannabis Company FIRE-CA  $          138  $             176 1.9X 13.4X  $           93 95% 14%
Valens GroWorks Corp. VGWCF  $          360  $             360 2.7X 6.2X  $        133 168% 43%
Average – Ancillary Products & Services  $          856  $             988 3.6X 9.7X  $        431 69% 56%