In general, smaller cap public companies trade at higher valuation multiples than larger cap companies due mainly to the expectations of faster growth.
This is NOT the case in the cannabis industry. We looked at the valuations of the largest 6 market cap U.S. cannabis companies compared to the valuations of the 2nd largest 6 market cap U.S. cannabis companies as measured by enterprise value to 2021 consensus analyst revenues and EBITDA estimates.
As the chart shows, the smaller cap companies carry an EV/EBITDA multiple of 13.75X compared to 16.15X for the larger cap companies and a EV/revenues multiple of 3.06X compared to 5.46X for the larger cap companies.