RE:If Apple were valued at the same multiple to earnings as ACBIf we use the government of Canada’s projected sales of $5.5B for the recreational market alone, we should also note that this is the most conservative estimates of all, some independents even project as high as $22.6B; lofty and probably not realistic based on extrapolations from already legalized states, but noted none the less. I think we can all agree $5.5B CDN is a fair conservative number. With ACB being the number one producer globally with the CMED merger a conservative market share of 20%(estimated) would generate $1.1B CDN per year. Even at a share price of $15 creates a market cap of $6.8B. This all being said is not taking in to account global markets as views and laws become open to a legalized marijuana industry. Already Aurora’s has made significant progress in breaking into international medical markets.
I think it is also Important to note the possibility of spin of industry’s from what would be considered waste by products whether it is through patented technologies that aid microbs in the digestion and disposal of plant stalk, or creating ethanol fuels (adding to sugar cane and corn ethanol’s). Also the ability to create a hemp industry to include polymers, textiles and paper.
I feel that based on the above conservative numbers this is a company that can be large on free cash flow in the next 6-7 years. I believe ACB as well as the other major marijuana players listed in the Canadian exchanges have great ability to outperform every tangible sector globally. The life and longevity of the marijuana industry is comparable to alcohol and other industries that perform time and time again irregardless of economic times. The best way to describe what has happened in recent days to the marijuana sector is a gross over reaction to a minor correction.