Canadian Cannabis Companies Could See Valuations Soar By Up To 300% With Tax Reform, New Report Shows
Portfolio Pulse from Nicolás Jose Rodriguez
A recent report highlights the potential for Canadian cannabis companies' valuations to soar by up to 300% with proposed excise tax reforms. The Canadian government is considering revising the 2018 excise tax framework, which currently imposes a 30-40% tax rate on companies' domestic gross revenues, significantly higher than the intended 10%. Analyst Pablo Zuanic's report suggests that reducing the tax rate to 10% could alleviate financial strains on companies like Ayurcann, Decibel, and Village Farms, potentially doubling or even tripling their valuations. The report will be further discussed at the Benzinga Cannabis Capital Conference.
March 26, 2024 | 1:36 pm
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POSITIVE IMPACT
Ayurcann could potentially see its valuation increase by upwards of 300% with the proposed excise tax reform.
The significant reduction in excise tax from 30-40% to 10% could dramatically reduce financial strains, allowing Ayurcann to retain more profits and potentially triple its valuation.
CONFIDENCE 75
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Auxly could experience a valuation jump of around 200% with the proposed excise tax reform.
The excise tax reform could significantly benefit Auxly by reducing its tax expenses, potentially allowing for a 200% increase in valuation.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Decibel could enjoy a valuation increase of around 200% with the proposed excise tax reform.
The proposed tax reform could significantly lower Decibel's excise tax burden, potentially doubling its valuation by improving its financial health.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 85
POSITIVE IMPACT
Village Farms could see its valuation nearly double with the proposed excise tax reform.
Reducing the excise tax rate to 10% could slash Village Farms' tax bill significantly, potentially doubling its valuation by enhancing profitability.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 95