As an allocator of capital judging multiple opportunities for your marginal dollar, you must be able to:
- Identify the relevant investment opportunities.
- Assess the current size and value of public players.
- Determine the valuation multiple applied by the market to public players.
Vertically integrated operators are trading at an average of 3.1X and 2.0X of 2020 and 2021 enterprise value/sales, respectively, as of Aug. 19, 2019 – a reasonable multiple for any consumer packaged goods company.
By comparison, the Kellogg Co. trades at 2.4X 2020 sales despite being in a mature industry with flattish sales growth that is much less than the strong double growth expected for the cannabis sector.
This comp table provides a benchmark for private investors to evaluate existing and future investments as well as a menu for public investors to peruse.
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This table will be updated weekly and available for subscribers to download on the Investor Intelligence site.