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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 11/21/2025

Viridian Capital Chart of the Week: Stock Buybacks for Christmas?

  • The Viridian Chart of the Week explores the controversial idea of cannabis MSO stock buybacks.
  • The red line on the chart shows that eight of the twelve MSOs have experienced y/o/y stock price declines ranging from a 9% drop for Glass House to a 56% drop for Planet 13.
  • Conversely, consensus EBITDA estimates for 2026 are higher than those for 2025 for 11 of the 12 companies. (not shown)
  • The combination of these factors suggests that some companies may be able to afford stock buybacks.
  • The green line shows Viridian’s calculation of the potential percentage of stock buybacks (excluding any premium paid). We multiplied 2026 EBITDA estimates by 3x to approximate debt capacity. This is slightly higher than our analysis of sustainable debt in a 280E environment, but it is probably achievable in today’s debt capital markets. We subtracted existing debt (including excess tax liabilities) and added excess cash (reserving 10% of projected revenues to run the business) to arrive at the potential funding for stock buybacks.
  • The green line shows that, despite higher projected EBITDA and lower stock prices, the eight companies on the left still cannot afford any stock buybacks because they lack excess debt capacity and surplus cash.
  • The four companies on the right side of the graph, however, including Verano (VRNO: Cboe)(VRNO: OTCQX), Trulieve (TRUL: CSE)(TCNNF: OTCQX), Vext (VEXT: CSE)(VEXTF: OTCQX), and Green Thumb (GTII: CSE)(GTBIF: OTCQX), can repurchase between 1% (Verano) and 62% of their stock if they fully utilize their excess debt capacity.
  • GTI is the only one of the four companies with an active share repurchase program. The others seem more intent on debt reduction (TRUL & VRNO) or expansion (VEXT). The opportunity may be time-critical, though, as we expect significant share price run-ups upon positive S3 news.
  • Clearly, Viridian is not suggesting that leveraged recaps or LBOs are likely. But we ARE suggesting that the ability to buy significant percentages of outstanding shares with excess debt capacity is just another way to show that a number of MSOs are significantly undervalued.