Chart of the Week

The Viridian Capital Chart of the Week highlights key investment, valuation and M&A trends taken from that week’s Deal Tracker that we believe are impactful for investors, companies and acquirers.
Viridian Capital Chart of the Week: Do Cannabis Investors Still Care About Growth?

- This Viridian Chart of the Week follows up on our chart from last week, where we showed that U.S. Cannabis companies are significantly undervalued relative to their Canadian counterparts and all of the industries, including tobacco, pharmaceuticals, and CPG, that cannabis is frequently compared to.
- This week’s graph looks at 13 U.S. MSOs and 4 Canadian LEVPs to investigate the relationship between forecasted revenue growth rates (2024-2026 CAGR) and valuation multiples (EV / 2025 EBITDA est).
- The blue line shows the regression equation predicting EBITDA multiples from Revenue CAGR. The correlation of .58 is statistically significant at the .015 level and indicates that for each additional 1% growth, the valuation tends to go up by approximately .33 points.
- The chart shows several notable outliers. Tilray (TLRY: Nasdaq) and Glass House (GLASF: OTCQX) both trade at significant premiums to the regression-derived EV/EBITDA multiple. In contrast, MariMed (MRMD: CSE) trades at a distinct discount to the projected multiple.
- In this environment, we often hear that “fundamentals don’t matter” and “it is only about the ability to survive until regulatory reform.” However, the data shows that investors still place a premium on companies that are expected to maintain solid growth.
