Cannara Biotech Inc V.LOVE

Primary Symbol: T.LOVE Alternate Symbol(s): LOVFF

Cannara Biotech Inc., together with its subsidiaries, engages in the indoor cultivation, processing, and sale of cannabis and cannabis-derivative products in Canada. The company operates in two segment Cannabis operations and Real estate operations. It offers its products under TRIBAL, nugz, and ORCHID CBD brand name. The company sells its products through wholesalers and online merchandisers. In addition, it engages in the real estate operations. Cannara Biotech Inc. was incorporated in 2017 and is headquartered in Saint-Laurent, Canada.

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Cannara Biotech Inc

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Post by Possibleidiot01on Dec 16, 2025 5:58pm

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Post# 36827545

Mathieu Martin comment takeover implications

What does Canopy Growth's acquisition of MTL Cannabis mean for the Canadian Cannabis sector?

1 Consolidation is underway: Organigram (TSX: OGI) acquired Motif Labs a year ago, and we've now just seen another major M&A transaction in the sector. Following a wave of bankruptcies over the last several years, the next wave will be about consolidation as the industry moves to an oligopoly structure. I expect consolidation to reduce aggressive competition and improve profitability for all the remaining players.

2 Hard assets matter: In an inflationary environment, owning hard assets is the way to go (this is true outside of the cannabis industry too). Canopy Growth announced a few years ago that it was transitioning to an asset-light business model, relying on third-party growers to supply its biomass. The MTL Cannabis acquisition is a major shift back into cultivation for Canopy. Of the $10 million in expected synergies from the deal, I suspect a good chunk is by accessing MTL's high-quality biomass to replace third-party suppliers. LPs that don't own cultivation assets might get their margins squeezed. LPs that own their cultivation infrastructure in an inflationary price environment seem to be the best positioned and will display pricing power.

3 Valuations are cheap across the board: Canopy acquired MTL for approximately 11.7x TTM Adjusted EBITDA. If you apply the same multiple to some of my favorite LPs, here's what their share prices would be...

Canara Biotech (TSX-V: LOVE): $2.90 (+ 61%)
Auxly Cannabis Group (TSX: XLY): $0.28 (+ 80%)
Rubicon Organics (TSX-V: ROMJ): $0.83 (+ 66%)
Decibel Cannabis (TSX-V: DB): $0.36 (+ 200%)

(I don't guarantee the accuracy of this data, please do your own research. The Rivemont MicroCap Fund that I manage is long these stocks.)

This analysis is based on TTM numbers, and all these LPs are growing at double-digit rates. These stocks will only get cheaper from here, assuming continued execution.

To me, there's mounting evidence that the Canadian cannabis sector is DEEPLY undervalued and overlooked.

Will we need to see more M&A before investors wake up?