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Cannabis Stocks: Do CTST, HEXO, and IIPR Look Cheap?

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Jun. 20 2019, Updated 9:11 a.m. ET

CannTrust’s Valuations

In June, CannTrust (CTST) was almost flat. In contrast, the company fell by double digits in the previous three months. The cannabis industry experienced an overall weakness. CannTrust was trading at a forward EV-to-EBITDA multiple of 15x, which was at a discount to the peer median of 19x and its historical average of 20x.

HEXO (HEXO) and Innovative Industrial Properties were both trading at a premium to the peer median at 27x and 23x, respectively. Innovative Industrial Properties (IIPR) continued to show strength. The cannabis space in the US continued to heat up.

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Green Thumb Industries and Supreme Cannabis were both trading at a discount to the peer median at 6x and 9x. The cannabis sector might have lost its direction in recent months. Mergers and acquisitions remain ripe in the industry. However, the revenue expectations for companies like HEXO and others have been disappointing. Canopy Growth (WEED) is scheduled to release its earnings on June 20. Read Canopy Growth’s 4Q Earnings: What Can Investors Expect? to learn more.

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