Cannabis stock analyst Jason Spatafora, a.k.a. the Wolf of Weed Street, had harsh predictions for debt-strapped Canadian public companies banking on survival in the US. “It’s like Hunger Games, you know?” he told TheDeepDive.ca. “Maybe two or three of them escape.”
#MSOGang ????
Spatafora’s top three picks for US operators are based on their positions within states in the midst of policy changes: Curaleaf, Green Thumb and Trulieve. Curaleaf and Trulieve already have a strong presence in the Florida medical market, for example, and once it opens up to adult-use… boom, they’re ready.
???????? Legalization reality check
Spatafora is optimistic that President Biden will legalize cannabis nationwide, but that a framework won’t be designed to benefit Canadian business interests (obviously). For one, it could take significant time for issues like inter-state commerce and taxation to be hammered out. And second, a framework will be designed for American job creation, COVID relief and revenue creation — not to invite the global competition in. (See also: how welcoming Canada has been to cannabis imports…)
???????? Dubious valuations
Spatafora acknowledged that Canadian companies are already invested in US cannabis, but that many of them simply won’t have M&A cash on hand when push comes to shove. He claimed cross-border valuations should be flipped: US companies should have higher values than they do – and because of poor revenues and high debts, Canadian companies should be valued much lower. “If anything, we buy you,” he said.
Harsh toke, Spatafora.
