U.S. VS Canada Valuations
Winner: Canada
By Jeffrey Vidal
With the market taking a step back these last two months or so, there's been a lot of talk about USA v Canadian valuations. I think a lot of the volatility in the market, is due to the lack of visibility of these companies, along with very little track history. I mean, how could the population get a valuation so correct, it doesn't fluctuate very much at this point? I think it's important that you watch how many short positions are being played in any given company. Add in the volatility of the cannabis market, and valuation can be cut in half over a week or two span, for no real reason. You can find great buys in Canada right now. Thanks to the CSE, you can operate in the USA and Canada simultaneously, which I think is a huge advantage. Companies operating in both, can test out their edibles and other products in the USA, before Canada legalizes those types of products. Another factor I think people overlook is access to capital. Do you think a small-mid cap USA stock, is really going to get the funding as a multi-billion Canadian stock, with a global footprint, hundreds of millions (if not billions by the time it's federally legal in the USA) with years of track history and sales once it's legal? I see the USA market consolidating just how Canada is, but at a much higher volume, since the market is much larger. With that, will come heavy share dilutions for USA stocks. I don't see many USA-based stocks being that profitable in the near future, to be able to purchase a company in cash, for hundreds of millions of dollars. And that's where the big dogs of Canada come in, with hundreds of millions, if not billions, once the USA becomes federally legal. Do you guys think these Canadian companies aren't already planning their USA Ventures? Do you not think the big Canadian LPs are going to enter the market upon legalization? They are. So the whole USA v Canada argument, Canada wins in my opinion. They get Canada, USA and the rest of the world. What do you think?
This Photo by Unknown Author is licensed under CC BY-NC-ND
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