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.”
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.