KEY POINTS
• Now on the cusp of federal reform (timing of which is unknown), the cannabis industry appears at an inflection point with the growth prospects and legitimacy we outlined in 2014 beginning to materialize.
• Our review of a grouping of publicly-traded MSOs for CY ’19 and ’20 with a market cap >$1B, determined revenue growth of these ‘majors’ outpaced the broader cannabis industry by a wide margin YoY (170% vs 43%) yet this group trades at a discount (4.0x ’22 EV/Sales) relative to the industry as a whole (7.6X extrapolated from this grouping which accounts for ~18% of total retail sales of ~$19B in 2020). The reverse holds for the Canadian LPs; top tier is at 8.1x vs the sector at 7.0x (and accounts for ~ 54% of ’20 sales in Canada).