OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Valuation Tracker By Industry Sector
Valuation Tracker By Sector
The Viridian Value Tracker is the most comprehensive valuation product in the industry.
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- A broad set of 12 valuation measures assures applicability, regardless of whether the company has analyst coverage or revenues. The typically presented EV/ Projected Revenues and EV/ Projected EBITDA are available for less than 1/3 of the cannabis companies we track.
- Most valuation studies present only the average valuation measures, while the Tracker goes one step further and shows the distribution of values (the quartiles, median, and dispersion) for each measure. This gives users a more complete view of how companies in the cohort group are valued.
Week ended 12/27/2024
Sector Valuation – The Rise of Hemp
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- The Hemp sector saw a wild ride in 2024. It was the year that hemp-derived cannabinoid beverages took over the cannabis beverage sector, sidestepping the problems of retailing through dispensaries by accessing the mail-order DTC channel. Giants GTI and Curaleaf jumped into the sector, and we predict others will follow.
- Similarly, other hemp-derived intoxicants became ubiquitous at convenience stores in both cannabis-legal states as well as cannabis deserts. The rise of hemp did not go unnoticed, though. The THC industry rallied state legislation to ban hemp intoxicants in a growing list of states. However, Congress failed to plug what many refer to as the “loophole” in the Farm Bill by punting the legislation for another year, which gave at least another one-year lease on life.
- On a valuation front, the hemp sector saw fewer public competitors at year-end 2024 as most of the hemp-derived intoxicant business is dominated by private companies. The Viridian Value Tracker has 37 companies in the sector vs 45 at year-end 2023. The valuations are a bit stronger: EV/ estimated just finished YE revenues haven’t changed at .28x, but the Median Market to book is now 1.02x vs .55x at year-end 2023.
- The Hemp sector is an area to watch for 2025. The explosion of hemp-derived intoxicants has clearly made a dent in THC growth. Furthermore, the economic advantages are highly persuasive. Can the genie really be stuffed back into the bottle? We have our doubts.
Week ended 12/27/2024
Sector Valuation – The Rise of Hemp
-
- The Hemp sector saw a wild ride in 2024. It was the year that hemp-derived cannabinoid beverages took over the cannabis beverage sector, sidestepping the problems of retailing through dispensaries by accessing the mail-order DTC channel. Giants GTI and Curaleaf jumped into the sector, and we predict others will follow.
- Similarly, other hemp-derived intoxicants became ubiquitous at convenience stores in both cannabis-legal states as well as cannabis deserts. The rise of hemp did not go unnoticed, though. The THC industry rallied state legislation to ban hemp intoxicants in a growing list of states. However, Congress failed to plug what many refer to as the “loophole” in the Farm Bill by punting the legislation for another year, which gave at least another one-year lease on life.
- On a valuation front, the hemp sector saw fewer public competitors at year-end 2024 as most of the hemp-derived intoxicant business is dominated by private companies. The Viridian Value Tracker has 37 companies in the sector vs 45 at year-end 2023. The valuations are a bit stronger: EV/ estimated just finished YE revenues haven’t changed at .28x, but the Median Market to book is now 1.02x vs .55x at year-end 2023.
- The Hemp sector is an area to watch for 2025. The explosion of hemp-derived intoxicants has clearly made a dent in THC growth. Furthermore, the economic advantages are highly persuasive. Can the genie really be stuffed back into the bottle? We have our doubts.
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