Here are MJResearchCo we are resuming the publishing of comparison tables for the marijuana, hemp/CBD, and ancillary services.
We will update these weekly for MJResearchCo Members Only (to join click here), usually with some commentary on the moves in the multiples and estimates.
A PDF of the comp table priced as of December 7, 2020 can be downloaded here:
Comp Table Priced December 7, 2020Multiples expand to 5.0X Sales in US, 6.5X Sales in Canada
As shown in the PDF, the US focused operators trade at an average of 5.0X sales and 16.5X EBITDA on 2021sales, up from 3.6X and 12.7X respectively on October 16, 2020. This is due to the post-election rally, with the US operators up an average of 21% in the past moth.
The Canadian operators have also rallied 19% on average and continue to command a premium to the US operators at 6.5X sales (and few relevant EBITDA multiples given their lower profitability), despite a smaller market, greater competition, lower margins, and fewer benefits from US legalization.
Not your average comp table
These comp tables have a heavy focus on getting the capital structure correct, given the complicated structures in cannabis companies with warrants, options, convertible debt, and pending acquisitions.
These tables dynamically adjust share counts and capital structures to include only in-the-money warrants, options, and treats in-the-money convertible debt as equity and out of the money as debt.
The are also pro forma for pending acquisitions and earn-outs per the terms of the deal. For example, a deal that calls for “$100 million of consideration paid in shares of XYZ” changes the number of shares with the current stock price.
No Excess Cash in Cannabis
As I have said before, there is no excess cash in the cannabis sector.
Though there are companies with strong balance sheets and net cash, I think this cash will be invested to drive additional growth at high returns by good operators and burned at negative returns by those that can’t turn a profit.
To account for this, these comp tables do not deduct net cash from enterprise values, though I conservatively add net debt. Debt is also usually counted at the face value, since the liabilities for warrants are accounted for in-the-money securities in the shares and cash.
Sales and EBITDA estimates are calendarized sell side consensus estimates in US Dollars provided by Sentieo. Stock prices are all in US Dollars regardless of the trading currency.
| Name | Ticker | EV/S 2021E | EV/EBITDA 2021E | Sales 2021E | EBITDA Margin 2021E |
| US-Focused Operators | |||||
| 4Front Ventures Corp | FFNT:CN | 3.8X | 12.2X | $ 153 | 30.9% |
| AYR Strategies Inc | AYR.A:CN | 3.4X | 7.7X | $ 304 | 43.9% |
| Columbia Care Inc | CCHW:CN | 3.0X | 15.0X | $ 444 | 20.3% |
| Cresco Labs Inc | CL:CN | 4.7X | 14.7X | $ 809 | 31.9% |
| Curaleaf Holdings Inc | CURA:CN | 6.6X | 20.9X | $ 1,261 | 31.7% |
| Green Thumb Industries Inc | GTII:CN | 5.8X | 16.7X | $ 841 | 34.8% |
| Harvest Health & Recreation Inc | HARV:CN | 2.2X | 9.8X | $ 368 | 22.6% |
| Jushi Holdings Inc | JUSH:CN | 5.6X | 26.8X | $ 190 | 20.8% |
| Planet 13 Holdings Inc | PLTH:CN | 8.1X | 27.4X | $ 142 | 29.7% |
| Schwazze (fka Medicine Man Tech.) | SHWZ | 1.6X | 8.7X | $ 104 | 18.1% |
| Terrascend Corp | TER:CN | 10.8X | 27.6X | $ 284 | 39.1% |
| Trulieve Cannabis Corp | TRUL:CN | 4.8X | 10.7X | $ 786 | 44.9% |
| Average – US-Focused Operators | 5.0X | 16.5X | $ 474 | 30.7% | |
| Canada-Focused Operators | |||||
| Aphria Inc | APHA:CN | 4.5X | 33.2X | $ 614 | 13.5% |
| Aurora Cannabis Inc | ACB:CN | 6.7X | n.m. | $ 281 | 1.5% |
| Canopy Growth Corp | CGC | 19.1X | n.m. | $ 575 | -18.8% |
| Cronos Group Inc. | CRON | n.m. | n.m. | $ 84 | -92.0% |
| Green Organic Dutchman Holdings Ltd | TGOD:CN | 2.5X | n.m. | $ 49 | 1.5% |
| Hexo Corp | HEXO:CN | 5.1X | n.m. | $ 117 | 4.0% |
| OrganiGram Holdings Inc | OGI | 3.6X | 36.5X | $ 96 | 9.8% |
| Sundial Growers Inc. | SNDL | 5.4X | n.m. | $ 68 | -9.6% |
| Tilray, Inc. | TLRY | 5.1X | n.m. | $ 294 | 4.4% |
| Average – Canada-Focused Operators | 6.5X | 34.9X | $ 242 | -9.5% | |
| Hemp / CBD | |||||
| cbdMD, Inc. | YCBD | 2.9X | n.m. | $ 54 | 1.5% |
| Charlotte’s Web Holdings Inc | CWEB:CN | 3.8X | 42.2X | $ 147 | 9.0% |
| CV Sciences, Inc. | CVSI | 2.2X | n.m. | $ 35 | -15.2% |
| Average – Hemp / CBD | 3.0X | 42.2X | $ 78 | -1.6% | |
| Ancillary Products & Services | |||||
| GrowGeneration Corp. | GRWG | 7.0X | n.m. | $ 299 | 11.6% |
| INNOVATIVE INDUSTRIAL PROPERTIES INC | IIPR | 17.4X | 19.9X | $ 197 | 87.5% |
| KushCo Holdings Inc | KSHB | 0.8X | 10.6X | $ 157 | 8.0% |
| SCOTTS MIRACLE-GRO CO | SMG | 2.6X | 13.9X | $ 4,315 | 18.9% |
| Valens Company Inc. | VLNS:CN | 1.8X | 7.8X | $ 115 | 23.0% |
| Average – Ancillary Products & Services | 5.9X | 13.1X | $ 1,016 | 29.8% |