viridian chart of the week

How can we explain the cataclysmic capitulation in cannabis stock prices last week, with the MSOS ETF down 21.5%? Was it just a reaction to a less cannabis-friendly Speaker of the House? The timing of the decline, beginning in earnest on October 25, does seem to lend some credence to this view....

The Viridian Chart of the Week shows analyst estimates for MSO revenue for the third quarter of 2023 relative to the second quarter of 2023 and the third quarter of 2022. The green bars depict estimated sequential quarter growth for Q3:23, while the orange bars show year-over-year growth. The...

Monitoring the credit quality of portfolio companies has become critical in the capital-starved environment of 2023, and, in fact, credit analysis has become the new equity analysis. Credit quality is multidimensional by nature: The Viridian Credit Tracker Model uses 11 market and financial...

Nine of the ten largest debt raises ever completed for U.S. Cultivation & Retail companies were closed in 2021 and 2022. Over $4.3B of debt was sold over this period, far more than in any similar period in U.S. Cannabis history. Debt became the largest source of capital to the industry in 2022...

The fourteen MSOs in the graph have all worked hard over the last year to lean down their working capital usage in order to increase operating cash flow. The chart looks at the components of working capital as of June 30, 2023, adjusted for subsequent capital markets transactions. Current assets...

Second quarter 2023 earnings releases are complete, and the results were fascinating. One of the things that makes us skeptical about these quarterly reports is the forceful steering that companies apply to try to move estimates down. We generally lay out the earnings schedule weeks in...

We created a discounted cash flow model ("DCF") to calculate a range of theoretically supportable EV/EBITDA multiples, given analysts' expectations for 2022-2024 and reasonable assumptions for the seven years after that. We based our model on a hypothetical $1 of EBITDA and generated...

The chart shows Viridian Capital Advisors Credit Tracker rankings of credit quality for nineteen public U.S. cannabis companies with market caps over $25M, along with the offered-side trading yield of the company’s debt (blue squares) or the effective cost at the closing of the company’...

The chart shows analyst estimates of EBITDA margins for the second quarter vs. the first quarter and the 2nd quarter of 2022 for the fourteen largest MSOs for which we have consistent analyst projections. The blue bars show Q1 23 EBITDA margins; the red bars show Q2: 23 projected EBITDA...

This week's chart explores the valuation and credit of the eighteen U.S. and Canadian cannabis companies with market caps between $20M and $100M. The presence of U.S. and Canadian companies in the group allows for comparing credit quality and valuation. The bars show enterprise value to...

This week's chart explores the relationship between U.S. Cultivation & Retail sector debt issuance and effective costs of debt. Cannabis companies issued a record amount of debt in 2021, including six of the ten largest debt deals in U.S. cannabis history. The pace declined in 2022, but...

The chart explores the relative credit quality and valuation of the eight public U.S. cannabis companies with market caps over $20M and coverage from fewer than two sell-side analysts. The green line shows the Viridian Capital credit ranking of the group ranging from one (best) to eight (worst)....

In honor of Independence Day, the Viridian Capital Chart of the Week explores the impact of IRS Rule 280e, the most egregious tax leveled on any American industry, posing an existential threat to even some of the largest MSOs. We collected consensus estimates of 2023 cash flow from operations and...

The credit quality of cannabis companies has taken center stage in 2023 as the equity capital markets remain shuttered and growth and operating profits remain constrained. Cannabis companies have rightfully turned to debt financing to plug the gap; however, this has increased leverage for the...

Cannabis Cultivation and Retail sector stocks are historically cheap; however, many carry a financial risk that is too high for all but the most intrepid investors. We took the 45 U.S. Cultivation & Retail companies in the Viridian Value Tracker database. We filtered out 14 with less than a $...