Week 13

 Update for Cannabis Industry between February 9th and February 13th.

There were no M&A activities for this week, so I have decided to look into the market overall and see who are the top players.

As a disclaimer, these percentages were calculated based on most recent quarters that companies have announced. Also, I have tried my best to dig into numbers and extract only Canadian sales.

To start off, Organigram holds the largest market share in Canadian market when it comes down to gross sales. Their sales span across various cannabis product categories, including dried flower, edibles, oils, and vaping products, catering to both recreational and medical consumers.

What’s particularly interesting is that no single company commands more than a quarter (25%) of the market, which indicates the highly fragmented and competitive nature of the cannabis industry in Canada. This suggests that while there are a few major players, the market is still diverse, with opportunities for both new and established companies to carve out significant portions of the pie. 

Despite this competitive fragmentation, most of these companies are well-diversified in terms of product offerings and have high exposure to international markets, particularly in the U.S. and Europe. This international diversification is essential for growth, especially considering the rapidly evolving cannabis landscape across the globe. For instance, some Canadian companies have been securing distribution agreements in international markets like Europe, where cannabis legalization is gradually progressing.

Another piece of Data that I started to collect was the EBITDA, and I am currently trying to get it sorted only for the Canadian market. Currently, the average EBITDA ratio versus sales is between 20% and 25%. I am still not 100% confident in these numbers as I have only started gathering some intel recently. Also, what I have also noticed is that a lot of these companies do not have any long term debt and instead have loads of leases. I believe that it is an interesting fact as it shows that each company does their finances in a "unique" way and it is probably because of how young the industry is. I will continue gathering data and present real numbers to analyze whether leasing or holding debt is the more advantageous option, depending on the scenario.

Unfortunately, I was unable to get more data about the private sector as it is quiet limited, but I believe that during the next few months I would be able to come up with something better.