viridian chart of the week

Analysts have a range of choices when valuing cannabis companies. Viridian commonly uses Discounted Cash Flow Analysis, Public Company Comparables, and M&A Precedent Transactions to value both small private concerns as well as larger public companies. But, consider the task of valuing a...

Much has been written recently about the upcoming “Tsunami” of Debt maturities in 2026. The articles have an alarming tone that we do not feel is representative of economic reality. The cannabis debt capital market is hot, and refinancings are getting done without the need for equity...

The chart shows the percentage change in consensus 2024 EBITDA estimates between the end of 2023 and now. The orange bars represent the portion of EBITDA % change attributable to changes in EBITDA Margins, while the blue bars depict the part attributable to changes in revenue estimates. In...

What’s the right way to measure Cannabis company leverage?   The standard answer is Debt/EBITDA; however,  Viridian believes the single best valuation measure is Total Liabilities / Market Cap, which reflects the market’s estimation of the asset value above liabilities....

The cannabis debt market is HOT! The five issues shown on the chart were all completed in the third quarter of 2024 (with two weeks remaining) and account for approximately $632M of proceeds, greater than any quarter since the fourth quarter of 2021.   The graph shows the effective cost of the...

The cannabis credit markets have come back to life with several major refinancings, including Ascend (OTC: AAWH), TerrAscend (OTC: TSNDF), and Jushi (OTC: JUSHF). The market has become more sophisticated with a tremendous spread of yields required based on perceived credit quality, ranging from...

The graph shows the calculated percentage growth rates of EBITDA, arranged in increasing order of sequential quarterly growth rates (orange bars.) The blue bars show year-over-year growth rates, and the green bars show estimated full-year 2024 EBITDA vs actual 2023 EBITDA.  Half of the...

Viridian’s Chart of the Week focuses on the strengths and weaknesses of different margins as a measure of profitability and credit quality. The green line in the graph shows consensus estimates of 2025 net margins; the red line shows 2025 cash flow from operations margins, while the blue...

On Friday, June 28, 2024, Cannabis stocks were pounded by two different adverse events. Biden’s disastrous performance in the first debate raised fears of a new Trump administration and the actions that he could take affecting cannabis. We view this as essentially a non-event. S3 is moving...

The Viridian Chart of the Week explores the relationship between financial strength and YTD stock performance.   We broke the 30 MSO/SSOs that Viridian ranks each week into five different groups arranged with the strongest six companies on the left (Group 1) and the weakest six companies...

The chart shows the YTD stock performance of two equally weighted baskets of stocks. The orange line depicts the YTD performance of a basket of the top five MSOs by market cap: Curaleaf (OTC: CURLF), GTI (OTC: GTBIF), Trulieve (OTC: TCNNF), Verano (OTC: VRNOF), and Cresco (OTC: CRLBF). The green...

Viridian created a discounted cash flow model ("DCF") to calculate a range of theoretically supportable EV/EBITDA multiples, given analysts' expectations for 2024-2025 and reasonable assumptions for the seven years after that. We based our model on a hypothetical $1 of EBITDA and...

The Viridian Chart of the Week shows U.S. Cultivation & Retail sector capital raises, which are up 48% YTD from 2023, albeit from a historically low base. The increase contrasts with a 22.0% decline for all cannabis-related sectors worldwide and a 32.5% decline of all U.S. cannabis raises...

The Viridian Chart of the Week on 8/27/23 demonstrated that cannabis is more capital-intensive than tobacco, alcohol, pharmaceuticals, or general consumer products. Cannabis measured 1.67x capital/sales. The industry has managed to reduce capital intensity slightly since then, and the group now...

The graph depicts the stock price performance of baskets of stocks in six different cannabis industry subsectors. Each basket consists of the top four or five U.S. companies in each group. The stocks in each basket are equally weighted, and the basket prices are indexed so that August 25, 2023 (the...