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Thursday, Feb 22, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Top 5 Cannabis Companies Based on Revenue

Let’s look at who the top five cannabis companies in terms of sales, and then relate that to their market caps to see which ones are more reasonably priced.

Pixelated word Top 5 made from cubes, mosaic pattern

There are a lot of cannabis companies out there and it’s hard for investors to keep track. So let’s try to simplify it a bit and look at who the top five are in terms of sales, and then relate that to their market caps to see which ones are more reasonably priced. With the bigger companies reporting in CAD, we’ll use that as the base currency and U.S. sales will convert at a factor of 1.33, which is around where the exchange rate has been lately.

Canopy Growth Corp (NYSE:CGC)(TSX:WEED) is unsurprisingly the biggest marijuana company there is today with sales totalling $155 million over the past four quarters. The Company has much higher aspirations for the future and plans to be a whole lot bigger than where it is today. Currently, the stock is valued at a market cap of more than $20 billion. That puts it at a price-to-sales (P/S) ratio of around 130. That’s a pretty hefty premium that investors have been willing to pay for the top pot stock.

Trulieve Cannabis Corp (CSE:TRUL) recently reported its earnings for the year, and they came in at over US$100 million. Converted at 1.33 this would equate to about $134 million. Trulieve has proven to be a big name in the industry and investors are starting to take note. However, with a market cap of just $2 billion, it is trading at a modest P/S of around 15. When it comes to cannabis stocks, it’s relatively cheap compared to its peers.

Aurora Cannabis Inc (NYSE:ACB)(TSX:ACB) has been Canopy Growth’s long-time rival, but it’s been falling behind. Sales for its last four quarters have been $119 million. And with a market cap of more than $12 billion, the stock is trading at a P/S ratio of around 100. Unsurprisingly, investors have been paying less of a premium for Aurora than they have for Canopy Growth. However, both are still at alarmingly high multiples.

Aphria Inc (NYSE:APHA)(TSX:APHA) technically has had more sales than Aurora in its last 12 months, with revenues reaching $121 million. However, Aphria has also benefited from it having a different year-end schedule and its most recent quarter ran up until February and included more months of post-recreational sales in Canada. Aurora and Canopy Growth reported most recently as of December 31 and didn’t get the same benefit. It’s a safe assumption that the $2 million difference in sales would have been more than made up by Aurora if it had the same reporting period. With a market cap of around $2.6 billion, Aphria’s P/S comes in at 21.

MedMen Enterprises Inc (CSE:MMEN) is another U.S. pot stock that could move up this list, especially as it moves into more U.S. States. Although The Company has been facing lots of negative press lately, its results have been very strong. With about $114 million (USD$86 million) in the last 12 months, it’s no slouch and is giving Aphria a run for its money for the number four spot on the list.

Honorable mention goes to Charlotte’s Web Holdings Inc (CSE:CWEB), which generated $93 million (USD$70 million) in sales in the trailing twelve months.

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