Cannabis Vs. Coca-Cola And Marlboro: Marijuana Market Growth Outpaces Alcohol, Tobacco And CPG Giants

Nicolás Jose Rodriguez

June 25, 2024

Recent financial data from Beacon Securities compares key financial metrics across the alcohol, tobacco and cannabis industries, showing that cannabis is set to outpace major players like Coca-Cola (NYSE:KO), Marlboro (NYSE:MO), and Budweiser (NYSE:BUD) in market growth.

Financial Metrics

The EV/Sales ratio, which compares a company’s total value, including debt to its annual sales helps investors see the cost per dollar of sales. A lower EV/Sales ratio suggests a company might be undervalued, indicating a potential investment opportunity, while a higher ratio could imply overvaluation.

Beacon’s report shows the EV/Sales ratios for 2024 and 2025 as follows:

Alcohol: 3.6x and 3.4x
Tobacco: 4.0x and 3.9x
Consumer Packaged Goods (CPG): 3.4x and 3.3x
Canadian Licensed Producers (LP): 1.4x and 1.1x
U.S. Operators: 1.7x and 1.5x

In terms of the EV/EBITDA metric, which compares company value to earnings before interest, taxes, depreciation and amortization, lower numbers indicate better valuation relative to earnings. Here are the projections:

Alcohol: 11.0x for 2024 and 10.4x for 2025
Tobacco: 7.5x for 2024 and 7.4x for 2025
CPG: 15.5x for 2024 and 14.6x for 2025
Canadian Licensed Producers (LP): 17.1x for 2024 and 12.9x for 2025
U.S. Operators: 8.0x for 2024 and 6.2x for 2025

Growth Prospects

Meanwhile, the 2023-2025 EBITDA Compound Annual Growth Rate (CAGR) reveals differing growth expectations:

Alcohol: 6%
Tobacco: 1%
CPG: 6%
Canadian Licensed Producers (LP): 65%
U.S. Operators: 42%

This means that the cannabis industry, particularly U.S. operators and Canadian licensed producers, appears to be undervalued compared to the alcohol, tobacco and consumer packaged goods (CPG) sectors. Despite having significantly lower EV/Sales ratios, indicating they are currently valued lower per dollar of sales, cannabis companies show much higher growth potential as reflected in their impressive EBITDA growth rates.

Investors may be overlooking the rapid growth and future profitability of the cannabis sector, which is poised to outpace more established industries. This discrepancy suggests a potential investment opportunity in the cannabis market as its growth trajectory continues to rise.

These investing issues will be a hot topic at the upcoming Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Join us to get more insight into what the wave of weed legalization means for the future of investing in the industry. Hear directly from top executives, investors, advocates, and policymakers. Get your tickets now before prices go up by following this link.

Photo: AI-Generated Image.

Recommended

Warning: 2024 Election Year (New AI) - Ad

Nvidia Is Now Part of $3 Trillion Market Cap Club - Ad

Oppenheimer of Our Age Makes Startling Discovery - Ad

Former President Donald Trump has made a decision on his vice presidential nominee for the forthcoming election.

Stocks Show Modest Gains Ahead Of Fed's Inflation Report; Chipmakers Struggle, While Gold And Bitcoin Rebound: What's Driving Markets Thursday?

Wall Street experienced a subdued trading day on Thursday, as traders likely chose to remain on the sidelines in anticipation of Friday’s release of the Federal Reserve’s preferred inflation gauge.

What President Biden's New Law Means for Investors

What President Biden's New Law Means for Investors - Ad

President Biden just signed a new law approving billions of dollars for one small but growing industry, and investors like Bill Gates and Peter Thiel are all over it. This expert just went public with all the details, including which stocks to jump on immediately.

Biden In Trouble: Trump Dominates Swing States, Ties In New Battleground State Won By Democrats In 12 Straight Presidential Elections

A new 2024 election poll makes a change to what the top seven swing states are. The move and poll results could have Joe Biden worried.

Top 2 Utilities Stocks That May Rocket Higher In June

The most oversold stocks in the utilities sector presents an opportunity to buy into undervalued companies.

The Nanotech Startup on a Mission to Save Millions of Lives

The Nanotech Startup on a Mission to Save Millions of Lives - Ad

With a groundbreaking technology that repels deadly pathogens, this tiny company is taking on the global threat. Their innovative approach could transform infection control forever.

Assault on US avocado inspectors in Mexican state led to suspension of inspections

MEXICO CITY (AP) — Two employees of the U.S. Agriculture Department were assaulted and temporarily held by assailants in the Mexican state of Michoacan, prompting the U.S. government , the U.S. ambassador to Mexico said Tuesday.

Cathie Wood's Ark Invest Acquires $7.3M Worth Of Shares In This Promising Netflix Competitor, Sells Off Coinbase Stock Amid Bitcoin Slump

On Wednesday, Cathie Wood-led Ark Invest made significant trades in Roku Inc (NASDAQ:ROKU) and Coinbase Global Inc (NASDAQ:COIN), amidst a volatile market.

What Is Nvidia's New $1 Trillion Superproject?

What Is Nvidia's New $1 Trillion Superproject? - Ad

While most are still focused on Nvidia's recent performance, they're missing this massive, $1 trillion pivot Nvidia's making right now. But it's what's happening behind the scenes that should be most exciting for investors. We've identified three companies that Nvidia needs to lean on to help get the job done.

UAW President Shawn Fain Under Federal Scrutiny For Alleged Retaliation Against Union Leaders, Monitor's Probe Widens

Shawn Fain, the president of the United Auto Workers, is under investigation by an independent federal monitor for alleged retaliation against other union leaders.

As Apple, Nvidia Trade Near All-Time Highs, Jim Cramer Tells Investors To Cash In On AI Stocks: 'Let's Not Be Too Greedy'

Jim Cramer, the host of CNBC's "Mad Money," has suggested that it might be time for investors to consider taking profits from their AI stock holdings.

This Billionaire's Final Masterpiece: "X-9840"

This Billionaire's Final Masterpiece: "X-9840" - Ad

The investment legend who predicted the rise of Bitcoin, Facebook and streaming services like Netflix... Just released the details on what he's calling Project X-9840. This business mogul is now set to revolutionize MONEY. He has said he could flip the switch "as early as mid 2024."

Dog fight! Joey Chestnut out of July 4 hot dog eating contest due to deal with rival brand

NEW YORK (AP) — America’s perennial hot dog swallowing champion won’t compete in this year’s Independence Day competition due to a contract dispute, organizers said Tuesday.

Why Alibaba Stock Could Rally: Golden Cross In Sight

Alibaba is nearing a bullish Golden Cross, with strong AI and cloud ambitions, despite facing competition and bearish momentum. Solid business, attractive valuation, and potential uptrend signal future growth.

America Has New Type of Money, Making Some Rich...Should You Get It?

America Has New Type of Money, Making Some Rich...Should You Get It? - Ad

One of America's most controversial CEOs says, "A new form of money in America is making some people (including Elon Musk, Jeff Bezos, and 17 of America's 25 wealthiest individuals), rich. It has nothing to do with gold, bitcoin, or anything like that, but it's 100% legal. The problem? Few Americans have a real understanding of how it works.

Boeing Insists On Adherence To Legal Agreement Post-737 MAX Crashes: Report

Boeing reportedly maintains it adhered to a 2021 agreement aimed at avoiding prosecution after the 737 MAX incidents, countering U.S. claims of non-compliance. The company's commitment to transparent engagement highlights its efforts to navigate legal complexities ahead of the Justice Department's crucial July 7 decision on extending prosecution terms.

Following Debate, Latest Poll Among Democrats Signals Major Trouble For Joe Biden â€” Although There's One Silver Lining

According to a recent poll, a majority of voters have expressed their belief that President Joe Biden should be replaced as the Democratic candidate.

Wall St. Icon: Looming Financial Tsunami Will Wipe Out the 1%

Wall St. Icon: Looming Financial Tsunami Will Wipe Out the 1% - Ad

Wall Street icon who forecasted Black Monday and dot-com crash says a new economic event will hit the American economy like a tsunami. It doesn't matter if you're blue collar, white collar, working, or retired. He says, "I am literally afraid for my family's future. I'm taking drastic steps to prepare for what I know will inevitably happen next."

Shiba Inu, Ethereum, Chainlink Flash This 'Long-Term Bullish Signal' Despite Recent Drop

While the cryptocurrency market edged lower Thursday, several of the most popular coins showed a strong bullish indication. What Happened: Ethereum, Shiba Inu, and Chainlink endured significant losses during the day, as indicated below.

Mike Johnson Suggests Using 25th Amendment To Remove Biden After Debate Performance: 'This Is A Very Dangerous Situation'

Speaker Mike Johnson has suggested that the Cabinet should consider invoking the 25th Amendment to remove Biden from office.

Claim Your Free "AI Income Playbook" Now!

Claim Your Free "AI Income Playbook" Now! - Ad

Income expert Marc Lichtenfeld has a special gift reserved just for you... It's his brand-new "AI Income Playbook" - and it's yours FREE! Inside, you'll discover how to tap the unlimited profit potential of artificial intelligence... With three explosive AI stocks that are handing out monster dividends like clockwork.

Judges hear Elizabeth Holmes' appeal of fraud conviction while she remains in Texas prison

SAN FRANCISCO (AP) — A panel of federal judges spent two hours on Tuesday wrestling with a series of legal issues raised in an attempt to overturn a fraud conviction that sent Theranos CEO Elizabeth Holmes to prison after a meteoric rise to Silicon Valley stardom.

What's Going On With Taiwan Semi Stock On Wednesday?

Taiwan Semiconductor Industry to maintain global lead for 8-10 years, urged to ensure research security and develop grand strategy for changing supply chains.

Discover "U.S.'s New Money" Before Biden Wins

Discover "U.S.'s New Money" Before Biden Wins - Ad

A new form of money has emerged in America, and it's making some folks wildly rich... (Musk and Bezos both use it). Find out how you can too in this free video.

Is Altseason Around The Corner? Real Vision Analyst Reveals Key Indicators

Real Vision analyst Jamie Coutts on Thursday presented an optimistic outlook for high-quality altcoins, highlighting that the current setup appears increasingly favorable as global liquidity gears up for expansion.

Micro communities for the homeless sprout in US cities eager for small, quick and cheap solutions

ATLANTA (AP) — In a dreary part of downtown Atlanta, shipping containers have been transformed into an oasis for dozens of previously unsheltered people who now proudly call a former parking lot home.

Ex-CIA Insider Exposes How Dems Could Rig the Election

Ex-CIA Insider Exposes How Dems Could Rig the Election - Ad

In 2016, surveys were giving Hillary Clinton more than 99% chance of winning right up until election night. But right before the election... Former advisor to the CIA, Jim Rickards predicted Trump would win. You won't believe what he's predicting now. And it could have huge implications for the financial markets.

Russia Confirms Contact With US Over Possible Swap For Detained WSJ Reporter Evan Gershkovich

Russia has confirmed that discussions are underway with the United States regarding a potential prisoner exchange involving WSJ reporter Evan Gershkovich.

What's Going On With Ocean Power Technologies Stock After Hours?

Ocean Power Technologies said it signed an Original Equipment Manufacturer agreement with Teledyne Marine, a division of Teledyne Technologies in an effort to to enhance Ocean Power's product offerings and drive innovation within the industry.

Could This New Project Top $1T?

Could This New Project Top $1T? - Ad

This billionaire has predicted that his new venture - something I'm calling "X-9840" - could become "a trillion dollar company." Today, only three companies in the US are worth more than $2 trillion. Microsoft... Apple...and Nvidia. This has nothing to do with electric vehicles... Self-driving cars, rockets, brain chips, or satellites.

US Supreme Court refuses to take up challenge to Florida's online sports betting compact

FORT LAUDERDALE, Fla. (AP) — The U.S. Supreme Court on Monday refused to take up a challenge to exclusive rights to handle online sports betting in Florida, dealing a blow to the deal's opponents.

Is Kamala Harris The Answer To Joe Biden's Shortcomings? Poll Hints At Voter Sentiment Toward Possible Replacement Candidate

Joe Biden's debate stumble sparks Democratic anxiety over potential successor Kamala Harris amid ongoing scrutiny and party divisions.

Collect 10%+ Dividends From AI's Explosive Growth?

Collect 10%+ Dividends From AI's Explosive Growth? - Ad

This one-of-a-kind fund is set to pay out a tsunami of profits to shareholders... Giving you the chance to collect 10%+ dividend yields, year after year! In his brand-new "AI Income Playbook," Marc Lichtenfeld gives you the full scoop on this breakthrough fund... Including its name, ticker symbol, and profit potential.

Bitcoin Continues Sideways Despite $21M ETF Inflow On Wednesday

Bitcoin spot ETFs saw net inflows of $21.5 million, signaling a shift in investor sentiment. Experts will discuss this and more at Benzinga's event.

The fizz is gone: Atlanta's former Coca-Cola museum demolished for parking lot

ATLANTA (AP) — Once a shrine to the world's most popular soft drink, the building that housed the original World of Coca-Cola is going flat at the hands of Georgia's state government.

The 7th Trillion Dollar Company?

The 7th Trillion Dollar Company? - Ad

There are six American companies worth over $1 trillion. Could there be a seventh soon? This company signed a massive deal with Apple until 2040 and is also involved with Nvidia, Google, and Samsung. Could this be the next trillion-dollar company? A top stock expertpicker thinks so.

Michigan couple, attorney announced as winners of $842.4 million Powerball jackpot

GRAND BLANC TOWNSHIP, Mich. (AP) — A mid-Michigan couple and a lawyer from the west side of the state were announced Tuesday as winners of an $842.4 million Powerball lottery jackpot from a ticket purchased on New Year's Day.

Colorado's Youth Cannabis Use Hits Historic Lows, Survey Finds

Colorado's latest survey shows declining youth cannabis use alongside broader shifts in risky behaviors and mental health improvements.

Big Tech Is Spending Billions Each Month on This AI Superproject

Big Tech Is Spending Billions Each Month on This AI Superproject - Ad

Big Tech is committing billions each month to the construction of these AI mega data centers. This is where Nvidia, comes in. It's quietly leaning on a set of what we call Silent Partners to get the job done. These companies could benefit greatly from this next wave of the AI boom.

Coinbase Shares Spike After Company Unveils Stripe Collaboration To Streamline Crypto Payouts

In a significant move for the cryptocurrency world, leading digital asset exchange Coinbase Global Inc. (NASDAQ:COIN) and payment processing giant Stripe have unveiled a strategic alliance aimed at enhancing cryptocurrency payment solutions.

Trending Now

Cathie Wood-Led Ark Invest Dumps $4.3M Worth Of Nvidia Shares Amid Rebound -- Swoops Into Buy Stock Of This Netflix Rival

Asia Mixed While European Markets Dip, Crude Slips To $77 On Reduced Demand Forecast - Global Markets Today While US Slept

Scaramucci Says Democrats Have To 'Switch Up Their Strategy Immediately' After Biden's 'Brutal' Debate Performance: 'Trump Will Win On Nov. 5 Unless ...'