High Capex, High Rewards: Analyst Looks At Cannabis MSOs' Strategies
Portfolio Pulse from Nicolás Jose Rodriguez
Pablo Zuanic, managing partner and senior analyst at Zuanic & Associates, has analyzed the capital expenditure (capex) strategies of 20 prominent cannabis Multi-State Operators (MSOs). Amid high interest rates and regulatory uncertainties, most companies are prioritizing cost reduction and cash flow management. However, Zuanic suggests that some MSOs with the resources should increase capex for profitable growth. Green Thumb (OTC:GTBIF) leads the way with a capex-to-sales ratio of 26% in 1H23, well above the group average of 6%. Other high capex players include MariMed (OTC:MRMD), 4Front (OTC:FFNTF), and Cresco (OTC:CRLBF).
October 18, 2023 | 7:16 pm
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POSITIVE IMPACT
Cresco has a capex-to-sales ratio of 10%, and despite being more leveraged, has invested significantly.
Cresco's high capex-to-sales ratio indicates that the company is investing heavily in its growth, which could lead to increased profitability in the future.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
4Front has a capex-to-sales ratio of 11%, and despite being more leveraged, has invested significantly.
4Front's high capex-to-sales ratio indicates that the company is investing heavily in its growth, which could lead to increased profitability in the future.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Green Thumb leads the way with a capex-to-sales ratio of 26% in 1H23, well above the group average of 6%.
Green Thumb's high capex-to-sales ratio indicates that the company is investing heavily in its growth, which could lead to increased profitability in the future.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
MariMed has a capex-to-sales ratio of 12%, and is notably on a capex ramp, heading north of 27% for 2H23 based on sales and capex guidance.
MariMed's increasing capex-to-sales ratio indicates that the company is investing heavily in its growth, which could lead to increased profitability in the future.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100