Canadian Marijuana Stocks That Are Top Takeover Targets

The Canadian marijuana stocks on our list, including Aurora Cannabis Inc (TSE:ACB), trade at a discount to Forward EV/EBITDA

SmallCapPower | October 12, 2017: The EV/EBITDA multiple illustrates what a potential acquirer would analyze, considering the negative outflow of debt and the benefit of cash. The multiple is a measure of the value per dollar of EBITDA. A low ratio might indicate that a company is undervalued. That being said, the multiples for the Canadian marijuana stocks on our list range between 10x – 31x, compared to the industry mean of 82x.

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Golden Leaf Holdings Ltd (CSE:GLH) – $0.20

Golden Leaf Holdings Ltd (GLH) is a Canadian company that produces and sells cannabis products. The Company’s subsidiary, Left Coast Connections, operates a dispensary. Furthermore, the Company’s production facility is located in Greenpoint Oregon and produces dried marijuana and cannabis oil.

  • Market Cap: $74 million
  • Forward EV to EBITDA (NTM): 10.13x

Organigram Holdings Inc. (TSXV:OGI) – $3.08

Organigram Holdings Inc. is a Canadian medical marijuana producer licensed under the Cannabis Access to Cannabis for Medical Purposes Regulation (ACMPR) to produce 1500 KG of dried marijuana and 500KG of cannabis oils. OGI’s main production facility is located in Moncton, New Brunswick.

  • Market Cap: $320 million
  • Forward EV to EBITDA (NTM): 30.29x

CanniMed Therapeutics Inc. (TSX:CMED) – $11.63

CanniMed Therapeutics Inc. is a Canadian company that produces pharmaceutical grade cannabis. The Company offers a range of cannabis related products that include cannabis oil, dried cannabis, vaporizers and other related accessories. CMED is licensed under the ACMPR to sell up to 7000kg of medical marijuana to patients. The Company operates two facilities: one in Saskatchewan, Canada and the other in Michigan, United States.

  • Market Cap: $264 million
  • Forward EV to EBITDA (NTM): 30.64x

Aurora Cannabis Inc (TSX:ACB) – $2.95

Aurora Cannabis is a licensed producer and seller of medical marijuana and cannabis oil under the ACMPR. The Company sells its products over the phone, online or through its mobile app and offers a delivery service to customers. Currently, the Company has a production facility in Alberta, which is licensed to produce up to 5400KG of cannabis per year.

  • Market Cap: $1,094 million
  • Forward EV to EBITDA (NTM): 30.86x

Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.

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