The last FIVE.....?After almost four years of the sector taking massive damage, taking on water and sinking further to the bottom of the ocean, along with investors, both retail & insitutional, bailing in droves, and what started out with hundreds of LPs, we are now left with a handful of companies, maybe about 30 in all and maybe only a dozen which are still somewhat solvent. All the rest are at various states of BK or insolvency and on their merry way out......... .....and good ridance, may i add 8).......
So who's left? As of this writing, Curaleaf is NOW the largest in terms of value or EV, which included market cap plus debt, coming in at anout $3.5B us. Right behind them, are four lp's with more or less the same EV value of ~$2,5B us. Which includes Trulieve, Canopy, Tilray & Green Thumb, all with aproximately the samde valuations and with debt ranging from about $500M to ~$1B. So for all intents & purposes, these four are in all in the same boat, with Cura in the Captain's chair and leading the charge. Whether this pecking order stays this way for any length of time or changes drastically.......remains to be seen. But i'm betting things will change in the coming year.......Though these five might not change, the order could.
Everyone else AFTER these five Lp's are in deep trouble of sorts, and there's a big decrepancy between them in terms of valuations & everything in between. And i doubt very much the majority outside those 5 will survive much longer, if at all. I also doubt that the annointed 5 will escape any collateral damage themselves, as survival is a broad word, and there's survival on many different levels. Which may or may not include all current shareholders of each of those respecitve companies. In other words, those 5 Lp's will probably survive but maybe not in current form and maybe NOT with the current s/h base.
What i can tell you for certain, is that ANYONE outside those 5 Lp's will either go bankrupt, insolvent, merge among themselves or pivot into a different sector alltogether. And if it's not ANY of those dismal & sad endings, they will get eaten whole by one of the five........at a VERY deep discount of course. Only time will tell who will survive & emerge victorious AND who will not. But rest assured many will not, probably the majoirty.
With this said, i continue to advise investors, as i've been doing for the last 4 years, to completely AVOID this sector or pull your money out if you still havent gotten the message or you've failed to acknowledge or accept your mistakes after all this time. Yessss.......even now......there's STILL time to escape and get away with more tha $1 in your pocket. Because i STILL don't see any light at the end of this dark, deep, tunnel as it still has many lp's to decimate & investors to gobble down.....never to be seen again.
GLTA