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OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS

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Chart of the Week

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.

Week ended 08/08/2025

Viridian Capital Chart of the Week: THE MARKET STILL CARES ABOUT EARNING SURPRISES

  • We frequently hear market commentators say things like, “Nothing matters except rescheduling” or “Fundamentals don’t matter in Cannabis.” We have always been uncomfortable with this apparent dismissal of the value of fundamental research.
  • The horrifically illiquid cannabis equity market can undoubtedly be pushed around by a few thousand shares trading on unfounded rumors.
  • The Viridian Chart of the Week, however, does show that stocks react to earnings surprises.
  • The green bars show the net percentage change of the stock price from the day before Q2 earnings were released to the day after the release. We have normalized these changes by subtracting the percentage change in the MSOS ETF on the same days. Through this process, we hope to eliminate purely market-driven movements.
  • The orange bars show the percentage miss or beat for each company on Q2’25 EBITDA relative to consensus estimates.
  • There are a few anomalies here. Companies that announced on August 7, including CBST, TSND, AAWH, VRNO, and CL, were judged harshly by this analysis because their stock performance was netted against a 13.3% uptick in the MSOS. Jushi and Cresco both soundly beat expectations, yet their stocks had small net declines. Cresco also announced a refinancing of their 2026 debt maturities, which we would have thought would rally the stock. On the other hand, perhaps the lack of such an announcement might have weighed on Jushi’s performance.
  • The data isn’t overwhelming, but it does indicate that the market still cares about earnings misses/beats, even in the face of largely rumor-based trading.