The marijuana stocks on our list have forward EV/EBITDA multiples below the industry average
SmallCapPower | August 11, 2017: Canadian marijuana companies are gearing up for next summer’s recreational legalization in Canada. Investors have done the same as marijuana stock valuations have skyrocketed over the past couple years. If you are an investor with a bullish view on the sector, the marijuana stocks on our list are ones to consider, based on their low forward EV/EBITDA multiples. The low multiples ensure you are not paying too much for these companies, on a relative basis.
Canadian Bioceutical Corp. (CSE: BCC) – $0.36
Pharmaceuticals
The Canadian Bioceutical Corporation, along with its subsidiaries, develops, produces, markets and sells nutraceutical products intended for the treatment of chronic medical conditions where existing treatments fail to meet the needs of patients or where consumers prefer herbal and plant-based medicines out of their concern for the side effects associated with modern pharmaceutical medicines. Its products include CinG-X, Relieva and FertaMax. CinG-X combines standardized cinnamon and ginseng extracts. CinG-X is also an additive that enhances the value of any food, beverage or nutritional supplement and can be combined with various other ingredients. The Company’s extract, Psorberine, has been incorporated into both topical cream and lotion products sold under the brand name Relieva.
- Market Cap: $92,631,770
- Forward EV/EBTDA: 19.3x
- EBITDA (NTM): $7,758,333
Aphria Inc. (TSX: APH) – $5.91
Pharmaceuticals
Aphria Inc., formerly Black Sparrow Capital Corp., is a Canada-based company, which is engaged in producing and selling medical marijuana through retail sales and wholesale channels. The Company’s retail sales are sold primarily through its online store, as well as telephone orders. Its wholesale shipments are sold to other Medical Purposes Regulations (MMPR) Licensed Producers. It offers medical cannabis of various strains, including Kusawa, Tamaracouta, Panache, Churchill and Iroquois. The Company is also engaged in the research and development, and commercial production of cannabis oil.
- Market Cap: $827,219,971
- Forward EV/EBITDA: 29.9x
- EBITDA (NTM): $25,385,928
OrganiGram Holdings Inc. (TSXV: OGI) – $2.29
Pharmaceuticals
OrganiGram Holdings Inc., formerly Inform Exploration Corp., is a Canada-based company, which operates through its subsidiary Organigram Inc. Organigram Inc. is a licensed medical marijuana producer as regulated by Health Canada under the Marijuana Medical Access Regulations (MMAR) of the Government of Canada.
- Market Cap: $237,817,152
- Forward EV/EBITDA: 22.6x
- EBITDA (NTM): $9,105,500
Aurora Cannabis Inc. (TSX: ACB) – $2.51
Pharmaceuticals
Aurora Cannabis Inc, formerly Prescient Mining Corp, is a Canada-based company, which is in the business of producing and distributing medical marijuana pursuant to the Access to Cannabis for Medical Purposes Regulations (ACMPR). The Company’s primary business consists of the sale of dried medical cannabis. The Company’s principal market is patients who use medical cannabis in Canada. It operates under the following segments: the production and sale of medical cannabis, as well as patient counseling and outreach services. The Company sells dried medical cannabis by direct delivery to patients through physical delivery services, as well as ordering services through the phone and the Company’s online shop and mobile application.
- Market Cap: $920,625,315
- Forward EV/EBTDA: 24.0x
- EBITDA (NTM): $43,491,778
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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