RevenuesI think you guys may have missed some key info in today's news release.
Given this, we don't know what the profit will be, but I think it'll be sold between $7-$10 per gram, minus $1 avg. cost to produce, equals $6-$9 per gram profit. So 50/50 on a $3 per gram basis (The low end) puts us @ $3,000 per Kilo x 45,000 Kilo's = $135,000,000.
Remember though, EACH facility is going to produce roughly 100,000 Kilos per year. One in BC and the other in Cali. The Cali one will be selling Q1 2019 and the BC one should be 3-6 months behind that. Any day we will have approval, but today's news suggests to me that a formal announcment is happening this week. Maybe next...
So the same math @ $3,000 per Kilo x 200,000 Kilo's = $600,000,000 in Profit! Multiplied by 4-6 times EBITDA (Not 8-9 or even 20 times like some people are talking about), and there you have it. 2019-2020 the company should be valued around $2.4 - $3.6 Billion or 7-11 times what it is worth today. Not bad for waiting 1 to 2 years I'd say!!!
So why isn't this valued HIGHER you might ask? Simple, revenues need to be PROVEN and facility isn't even built yet. Couple that with the political risks and sprinkle in the price per gram variance as well as consumer demand and.... POOF there you have the swings.
It's ALL about the long-term IMO. Did you watch your Netflix investment grow overnight by 20,30 or even 40 times if you were so lucky to have bought in early? I didn't think so...
Here's the insert in case you missed it:
Canopy Growth and Sunniva will share in the revenues as product is sold through Canopy Growth’s distribution network including its online marketplace, Tweed Main Street and via provincial distribution channels.