Investing in Cannabis: Canada VS United States

Viridian Capital Advisors Chart of the Week has the top five cannabis market cap U.S. stocks (Curaleaf, Cresco, GTI, TerrAscend & Verano) versus their Canadian counterparts (Aurora, Canopy, Cronos, Sundial & Tilray) where each stock’s price equaled 100% on February 19th, the approximate top of the market. Since February 19th, the prices of the top U.S. stocks have fallen 18.7% while their Canadian counterparts have fallen 38.7%.

We believe the market action reflects several realizations:
~U.S. Federal legalization may not come as quickly or easily as many had hoped.
~The benefits of positive legislation easing banking restrictions and possibly lessening the burden of 280e will accrue primarily to the U.S. competitors.
~The US MSOs are consolidating their positions in a manner that will make it difficult for Canadian competitors to assail, even if legally allowed.
~Recent earnings releases point to the structural lack of profitability of the Canadian LPs, an issue that does not seem to be going away.

The five Canadian companies now trade at an average revenue multiple of 13.6x vs 5.99x for the U.S. companies. Investors should look to rebalance their portfolios to greater weighting of the better valued, more profitable, and faster growing U.S. competitors.

Show Notes:
Is the Market Becoming at Least Relatively Rational?
https://www.viridianca.com/chart1

Guest:
Katrina Glogowski, Seattle Attorney & Angel Investor
https://www.linkedin.com/in/katrina-glogowski-711a985/

Host:
Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast.
https://www.linkedin.com/in/joshkincaid/

Episode 718 of The Talking Hedge:
Your Cannabis Business Podcast.
Covering cannabis products, reviews, business news, interviews, investments, events, and more.
https://www.theTalkingHedgepodcast.com

Music Info:
Song: Beat | Keep On | 2020
Artist: Milochromatic Beats
&
Song: Dark Trap Beats Hard Rap Instrumental | Gang | 2018
Artist: LuxrayBeats

Keywords:
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Josh is not an investment adviser. The Talking Hedge is long gold and silver. Listeners should always speak to their personal financial advisers.