Viridian Chart Of The Week: Do Cannabis Investors Prefer Safety/Liquidity To Growth?

 

  • In general, smaller cap public companies trade at higher valuation multiples than larger cap companies due mainly to the expectations of faster growth.

  • This is NOT the case in the cannabis industry. We looked at the valuations of the largest 6 market cap U.S. cannabis companies compared to the valuations of the 2nd largest 6 market cap U.S. cannabis companies as measured by enterprise value to 2021 consensus analyst revenues and  EBITDA estimates.

  • As the chart shows, the smaller cap companies carry an EV/EBITDA multiple of 13.75X compared to 16.15X for the larger cap companies and a EV/revenues multiple of 3.06X compared to 5.46X for the larger …

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