Is OGI a good buy?

Hi there,

We are not fans of the entire cannabis industry. It is incredibly volatile and is still very much inits infancy. That being said, OGI is one of the better priced companies in the industry.

It is trading at only 1.11 times book value and 4.68 times sales. The industry has certainly lost its lustre as lower than expected demand and inconsistent performance has led to a pretty significant downtrend. Not to mention the fact many in the industry have been faced with scandals.

As a result, many are writing off assets and slowing expansion. It also means that liquidity is much harder to come buy. Banks are less willing to lend these companies money, which means they are likely to tap the equity markets (issue equity) to keep the business afloat as they burn through cash.

Mat