- It is a well-established fact, thanks to the work of Eugene Fama, that the stock market is efficient over the long term
- That said, human nature often leads the market into causing wide dislocations between stock price and intrinsic value
- Delota (CSE:NIC), Canada’s only publicly traded vape retailer, appears to represent one such case of undervaluation
It is a well-established fact, thanks to the work of Eugene Fama, that the stock market is efficient over the long term, reflecting all publicly available information in share prices and offering up valuations that are, for all intents and purposes, on the nose.
However, human nature’s inconsistencies remain in play throughout a company’s life, often gifting active investors capable of keeping their emotions in check with opportunities to invest at unjustifiably low prices.
Delota (CSE:NIC), the largest omni-channel vape retailer in Ontario, appears to represent one such case of undervaluation, driven by its flagship brand, 180 Smoke Vape Store, which operates 32 locations in the province and has plans to expand across Canada, building on a first-mover advantage as the country’s only publicly traded vape retailer.
This content has been prepared as part of a partnership with Delota Corp., and is intended for informational purposes only.
The sin stock, market capitalization C$3.06 million, was supported by C$40.2 million in revenue in fiscal 2025, with C$36.7 million coming from 180 Smoke and C$3.5 million from its offside cannabis retail business. This represents an 18 per cent jump year-over-year and a 127 per cent jump from C$17.69 million since adopting the Delota name in 2021.
While net income has been inconsistent on a yearly basis over the same period, flopping between gains and losses, operations have managed to post a positive number for the past three quarters, earning C$340,000 in Q2 2025, C$470,000 in Q3 2025 and C$250,000 in Q4 2025, in addition to positive adjusted EBITDA over the past four quarters.
With the Canadian vape market expected to 7x from C$1.1 billion in 2023 to C$8.4 billion in 2030, and Delota having more than quadrupled the nicotine vape market’s 7.1 per cent compound annual growth rate from 2020-2023 – as detailed in slide 5 of the company’s May 2025 investor deck – management is confident about delivering further growth while improving fundamentals. Here are three key drivers behind this conviction:
- The ability to acquire smaller, breakeven or profitable competitors at no more than 3x EBITDA, with more than 50 potential targets currently in Delota’s pipeline (slide 10).
- Strategic applications of its proven store-conversion program (slide 9), which increased average monthly revenue at its Woodbridge Square location by 240 per cent to C$49,398.
- More than 280,000 registered e-commerce accounts across its brands, offering multiple avenues for potential monetization.
When we add a cash-flowing business to the mix, plus the fundraising flexibility of a tight 50.8 million fully diluted share count, it becomes hard to argue against Delota’s position of strength when it comes to adding Canadian vape and cannabis market share. The company is equipped to bide its time, swinging at only the fattest pitches, while continually improving operational efficiency on the road to greater scale, pricing power and profitability.
It’s then reasonable to suppose that the sin stock would have reflected its underlying business’ profitable growth, but this has been far from the truth, with investors tanking shares by 47.5 per cent since November 2021. In so doing, they’ve relegated Delota’s attractive financials to the bargain bin, along with the abundance of solid evidence for further improvements over the near term, granting you the brightest of green lights to run the company through your due diligence process towards a potential investment.
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