The financial landscapes of Canadian and U.S. cannabis operators showcase distinct paths in the quest for profitability, driven by varying market dynamics and regulatory environments. According to recent financial data from Beacon Securities, the analysis of key financial metrics such as EV/EBITDA and P/CFO ratios reveals crucial insights.
U.S. cannabis operators demonstrate a more robust market performance with an average EV/EBITDA ratio of 8.0x, compared to their Canadian counterparts who post a significantly higher average of 20.6x.
This disparity indicates that American companies like Curaleaf Holdings, Inc. (OTC:CURA) and Green Thumb Industries Inc. (OTC:GTBIF) are generally priced more attractively relative to their earnings before interest, taxes, depreciation and amortization—a key profitability metric.
Moreover, the Price to Cash Flow from Operations (P/CFO), which assesses the value of a company’s stock price relative to its operating cash flow per share, further underscores this trend.
U.S. operators like Trulieve Cannabis Corp. (OTC:TRUL) and Ascend Wellness Holdings LLC (OTC:AAWH) maintain an average P/CFO of 11.3x, considerably lower than the Canadian average of 31.2x for firms such as Aurora Cannabis Inc. (NASDAQ:ACB) and Tilray Brands, Inc. (NASDAQ:TLRY).
Such figures suggest that investors are paying less for each dollar of cash flow generated by U.S. firms,
