This is interesting. Not on institutional radar atm given...

This is interesting. Not on institutional radar atm given disastrous IPO. HOWEVER should merger go ahead (and looking forward to further financial details being disclosed in the prospectus to be lodged on the 27th of October) the historical rev multiple of combined entity at June 30 2021 is approx 4X (fully diluted). Depending on the assumed growth rates looking forward one year that drops to 2X (currently average revenue multiple on the asx for cannabis companies is approx 16X, Cronos Group the parent company is trading on approx 35X revenue), for an industry growth rate one could take the current monthly medicinal cannabis approvals which would put growth at approximately 90% for 2022.

In my opinion CAU was just listed way too early (essentially just a slide deck, agreement with parent company and some licenses) however I believe this has the potential to be a transformational merger making it a leader in Australia and Asia. Will be interesting to see if there is any institutional interest once prospectus is released (27th of October) which according to online sources will show the phenomenal growth of CDA which in 2019 had revenue of only $342k (at June 30 2020 had 21.3m) . Also given the combined company will be on the verge of profitability they should not have to raise funds which will mean instos will need to buy large volumes on market to get set.

Risk obviously that merger doesn't go through, regulatory issues with CDA, overhang of rats and mice crowd investors in CDA (even though they have the chance to take cash and large holders escrowed)

Will be interesting to see what happens here...