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Broker Date Rating Target (C$) Commentary "Within the cannabis sector and amongst all companies we have seen, we forecast that Valens will generate one of the most attractive EBITDA margin AltaCorp Capital Inc. Apr 25, 2019 Outperform $7.75 profiles. Based on our forecasted financial performance, Valens offers a very attractive opportunity to invest in what we believe is an undervalued and uniquely positioned business." "The company has executed a number of processing and product development agreements with some of the larger LPs in the Canadian Haywood Securities Inc. June 11, 2019 Buy $7.00 landscape that we believe will drive meaningful revenue and EBITDA growth over the course of 2019 and into 2020." "[Valens'] strong cash position will allow the company to increase extraction Mackie Research Capital Apr 25, 2019 Buy $6.75 capacity at its Kelowna facility, strategically increase its domestic geographic Corp. presence and address potential working capital requirements." "Valens presents investors with an opportunity to gain exposure to a rapidly GMP Securities Apr 26, 2019 Buy $10.00 growing industry very early in its development cycle [with] strong growth expected, attractive valuation, and readiness for edibles market." (In CAD$MM, unless otherwise noted) Share Price: As of 30 th of June 2019 $4.13 Basic Shares O/S 122.0 Fully Diluted Shares O/S 138.0 Equity Value $569.9 Cash and Cash Equivalents $67.2 ITM Securities $16.1 Debt $0.0 Enterprise Value $486.6 Financials (Based on Analyst Estimates) CY2019 CY2020 CY2021 Revenue $47.3 $149.1 $213.2 EBITDA $18.1 $74.8 $108.6 Trading Multiples CY2019 CY2020 CY2021 EV/Revenue 10.3x 3.3x 2.3x EV/EBITDA 26.9x 6.5x 4.5x 18
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Share Revenue (1) EBITDA (1) Equity Total Enterprise EV/Revenue EV/EBITDA Price Value Debt Value CY2019E CY2020E CY2021E CY2019E CY2020E CY2021E CY2019E CY2020E CY2021E CY2019E CY2020E CY2021E Canadian Large Cap Companies (C$) (C$MM) (C$MM) (C$MM) (C$MM) (C$MM) (C$MM) (C$MM) (C$MM) (C$MM) (x) (x) (x) (x) (x) (x) Canopy Growth Corporation $53.52 $26,599 $15 $17,823 $603 $1,152 $1,923 ($308) ($61) $306 29.5x 15.5x 9.3x NMF NMF 58.2x Aurora Cannabis Inc. $10.00 $11,302 $373 $10,828 $498 $999 $1,866 ($27) $221 $566 21.7x 10.8x 5.8x NMF 48.9x 19.1x Tilray, Inc. $62.40 $6,556 $621 $6,636 $178 $365 $547 ($47) $20 $128 37.3x 18.2x 12.1x NMF >100.0x 52.0x Aphria Inc. $8.97 $2,288 $535 $2,079 $478 $835 N/A $21 $154 $178 4.3x 2.5x N/A 98.0x 13.5x 11.7x HEXO Corp. $6.86 $2,107 $34 $1,806 $178 $424 $615 $4 $95 $172 10.1x 4.3x 2.9x >100.0x 19.0x 10.5x Cronos Group Inc. $20.07 $3,923 $0 $1,464 $50 $177 $333 ($34) $53 $98 29.2x 8.3x 4.4x NMF 27.8x 14.9x OrganiGram Holdings Inc. $8.43 $1,388 $13 $1,306 $153 $253 $335 $61 $95 $129 8.5x 5.2x 3.9x 21.3x 13.7x 10.1x Mean 20.1x 9.2x 6.4x 59.6x 24.6x 25.2x Canadian Mid Cap Companies CannTrust Holdings Inc. $6.54 $939 $16 $659 $133 $257 $347 ($2) $74 $112 4.9x 2.6x 1.9x NMF 8.9x 5.9x The Green Organic Dutchman Holdings Ltd. $3.12 $988 $1 $650 $44 $273 $517 ($34) $84 $151 14.9x 2.4x 1.3x NMF 7.7x 4.3x The Flowr Corporation $6.00 $645 $13 $627 $28 $49 $147 $2 $12 $55 22.3x 12.8x 4.3x >100.0x 52.7x 11.5x The Supreme Cannabis Company, Inc. $1.55 $553 $100 $555 $83 $157 N/A $13 $40 N/A 6.7x 3.5x N/A 43.9x 14.0x N/A Emerald Health Therapeutics, Inc. $2.38 $345 $0 $321 $26 $42 $86 ($28) ($14) $9 12.4x 7.6x 3.7x NMF NMF 35.6x WeedMD Inc. $1.62 $197 $35 $204 $42 $133 $162 ($4) $47 $37 4.9x 1.5x 1.3x NMF 4.4x 5.5x Mean 11.0x 5.1x 2.5x 43.9x 17.5x 12.6x Canadian Small Cap Companies VIVO Cannabis Inc. $0.66 $201 $38 $161 $34 $89 $231 ($14) ($2) $19 4.8x 1.8x 0.7x NMF NMF 8.7x Harvest One Cannabis Inc. $0.73 $157 $2 $133 $36 $98 N/A $1 $25 N/A 3.7x 1.4x N/A >100.0x 5.4x N/A Delta 9 Cannabis Inc. $1.14 $103 $15 $105 $50 $105 $158 $17 $30 $41 2.1x 1.0x 0.7x 6.3x 3.5x 2.6x 48North Cannabis Corp. $0.84 $155 $0 $84 $47 $106 $126 ($2) $10 $20 1.8x 0.8x 0.7x NMF 8.4x 4.2x Westleaf Inc. $0.55 $84 $5 $69 $15 $101 $178 ($2) $12 $33 4.5x 0.7x 0.4x NMF 5.8x 2.1x James E. Wagner Cultivation Corporation $0.67 $67 $8 $64 $25 N/A N/A ($2) N/A N/A 2.5x N/A N/A NMF N/A N/A Mean 3.2x 1.1x 0.6x 6.3x 5.8x 4.4x Canadian Extraction Companies MediPharm Labs Corp. $5.25 $762 $26 $652 $111 $199 $295 $26 $64 $91 5.9x 3.3x 2.2x 24.8x 10.1x 7.2x Neptune Wellness Solutions Inc. $5.84 $538 $4 $526 $46 $122 $195 $12 $45 $80 11.4x 4.3x 2.7x 43.5x 11.6x 6.6x Valens Groworks Corp. (2) $4.13 $570 $0 $487 $47 $149 $213 $18 $75 $109 10.3x 3.3x 2.3x 26.9x 6.5x 4.5x Radient Technologies Inc. $0.80 $235 $7 $192 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mean 9.2x 3.6x 2.4x 31.8x 9.4x 6.1x Source: Company Filings, S&P Capital IQ, AltaCorp Capital As of June 30, 2019; shares outstanding based on most recent quarterly financials and adjusted for share issuance transactions and other significant publicly disclosed transactions; presented as fully diluted with all in-the- money securities added to the equity value and cash proceeds added to diluted cash balance; N/D = Not Disclosed (1) Based on Analyst consensus estimates; (2) Valen's financial estimates are based on November 30 th fiscal year-ends rather than calendar year-ends 22
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