Disclosure: We own all four producers discussed (and no Aurora/Curaleaf), with more of ROMJ now.
Here is the latest from Canadian Value Investors! Today we cover:
The Basket Approach
The Fantastic Four vs Aurora!
Rubicon Organics ROMJ Q2 2026 Update: At an inflection point
We first wrote about Rubicon Organics as part of our Small Cap Discoveries October 2025 coverage. Since then, they have made progress on getting their second facility up and running and we think they are the most underappreciated company in our basket of four Canadian cannabis stocks. At the same time, Aurora, one of their formerly multi-billion-dollar competitors is being acquired for a small fraction of their bubble high.
In 2025 we said:
Much like Julius Caesar’s decision in 49 BCE to cross the Rubicon with his army, we have crossed the value investing Rubicon into Canadian cannabis. There remains few value-oriented fans of the industry, and for good reason. The Canadian legalization boom was awesome in the traditional sense of the word, with billions of dollars vaporized.
We did not participate in the initial boom and bust. However, as we have written about before, Canadian cannabis appears to be at an interesting inflection point. The effect of years of constrained capital, consolidation, and bankruptcies are starting to show signs through improved product pricing and margins. While many companies in the industry are still struggling, we are focused on the scrappy survivors who we think have interesting set ups.
To be clear, we remain cautious and cannabis remains a relatively small position at a combined exposure less than 10%. Potential issues abound; perhaps additional capacity destroys the pricing improvements we have seen. At this point, we do not think we truly know who “the winners” will be, and so a pooled bet on the best finds is our approach. We have focused down to two producers, Cannara and Rubicon, as well as retailer High Tide, have a small holding in Decibel, and are evaluating others.
Since then, we have added to all these positions as well as added in Auxly Cannabis Group (XLY), rounding out the four producers (we also own retailer High Tide). As we get into later, we view having a basket as the best way to approach the space as all four bring something different in an industry that appears to be fundamentally improving, but has a lot of unknowns.
Disclaimer - The content contained in this blog represents the opinions of contributors. You should assume contributors have positions in the securities discussed, whether long, short, or somewhere in between, and that this creates an obvious bias and conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance whatsoever and are subject to certain risks, uncertain risks, and other factors. Information might also be completely out of date and may or may not be updated. In addition, no one guarantees the accuracy of any information provided and none of the information should be construed as investment advice or any other kind of advice under any circumstance, and the blog is a blog and not a registered investment advisor or broker in any jurisdiction. Frankly, no information here should be used for any purpose, except for entertainment (and we hope you enjoy).
The Basket Approach
We view the underlying industry is improving, but it is hard for us to know exactly how it will play out for individual companies and strategies. What will the long-term economics of exports be? What brands will prevail? How will provincial politics play a role?
And so, we have four companies that each have different approaches and are at different stages. Cannara and Auxly are farthest along and most recognized by the market, while Rubicon and Decibel have made fundamental changes to their businesses and are doing interesting things that, we view, the market just does not seem to appreciate yet. We thought about calling it the Green CARD basket, but it did not seem appropriate in today’s political climate.
Today we cover Rubicon of the Fantastic Four.
The Fantastic Four vs Aurora Cannabis!
Earlier this month, Curaleaf announced an offer for Aurora Cannabis, one of the former highflyers of the industry and, we think, is a great case study of the market. (We have no position in either)
The deal puts a value on the business at a miniscule percentage of the past EV. Although it was valued in the billions, EBITDA justifying the valuation never came, never mind actual cash flow.
STAMFORD, Conn., Aug. 18, 2026 /PRNewswire/ -- Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (”Curaleaf“ or the “Company“), a leading international provider of consumer and medical cannabis products, today announced that it has formally commenced its previously announced proposal (the “Offer“) to purchase all of the issued and outstanding common shares of Aurora Cannabis Inc. (”Aurora“).
Under the terms of the Offer, Aurora shareholders would receive total implied consideration of US$4.00 per Aurora common share (each, a “Common Share“), comprised of 0.3463 (the “Base Exchange Ratio“) of a Curaleaf subordinate voting share (each whole share, an “Offeror Share“) plus US$0.75 in cash (the “Cash Consideration“) and based on Curaleaf’s closing share price of US$9.39 on August 10, 2026 (the day before the Company announced its intention to make the Offer). Based on Aurora’s 30-day Volume Weighted Average Price (”VWAP“) (as at August 10, 2026 (the day before the Company announced its intention to make the Offer)) of US$2.75 (the “Unaffected Share Price“),
What if our basket was a company? On a relative basis, it has done very well operationally versus Aurora while suffering from the same industry-wide lack of market interest.
Most interestingly, a key aspect is Aurora could never get their cost structure right for the business. It is hard from when you going from having wild amounts of access to capital, to none. A good lesson for other industries and bubbles.
Rubicon Organics ROMJ Q2 2026 Update: At an inflection point
