Weekly Valuation Tracker
Viridian highlights a specific industry sector and provides a deep dive into valuation metrics and comparable company valuations for public companies operating in that sector. The Weekly Valuation Tracker provides proprietary, actionable valuation data.
Weekly Valuation Report – Tier one MSO vs TOP Canadian LP EV / LTM EBITDA Multiples
- The Chart below shows a little-known fact about market valuations for US MSOs vs Canadian LPs. For each group of companies, we aggregated the next twelve-month EBITDA estimates and compared them with aggregate enterprise values as of the dates on the Chart. The U.S. companies included Cresco (CL: CSE), Curaleaf (CURA: TSX), Green Thumb (GTII: CSE), TerrAscend (TSND: TSX), Trulieve (TRUL: CSE), and Verano (VRNO: Cboe). The Canadian companies included Tilray (TLRY: Nasdaq), Organigram(OCI: Nasdaq), Aurora (ACB: Nasdaq), Village Farms (VFF: Nasdaq) and High Tide (HTI: Nasdaq).
- The Chart clearly shows that the Canadians trade at significantly higher EBITDA Multiple than their U.S. competitors. This spread has been stable and recently widened.
- Why is this gap so wide? Some observers will be quick to jump on the trading liquidity afforded the LPs on Nasdaq.
- Another reason that is perhaps more topical is 280e, the removal of which is now stalled. The fact is that $1 of US EBITDA is not worth as much as $1 of Canadian EBITDA. We estimate that for each dollar of Candian EBITDA, nearly 40% more drops to the free cash flow line. A large fraction of the multiple difference is accounted for by 280e.
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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.
Sector Valuation – Cultivation and Retail – What Does Bottom of the Cycle Valuation look like?
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- The Chart below shows up in our weekly tracker report but bears reprinting here. We find it remarkable that valuation multiples for top-tier US MSOs are now significantly lower than on 8/25/23, the Friday before the HHS announced it was recommending S3. Yeah, we definitely got that one wrong because we couldn’t conceive of a set of circumstances where we would be trading lower than then, but here we are.
- Overall, the 82 companies we track in the sector are trading at a median market-to-book of .62x, EV / 2025 EBITDA of 4.64x, and Adj. EV/ 2025 EBITDAR of 6.17x. Mark those numbers; we will be surprised if we see much lower prints than these. The catalyst upside potential is as apparent as the timing is unknown. Not a time to bail, IMHO.
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
Sector Valuation – Cultivation and Retail – What Does Bottom of the Cycle Valuation look like?
-
- The Chart below shows up in our weekly tracker report but bears reprinting here. We find it remarkable that valuation multiples for top-tier US MSOs are now significantly lower than on 8/25/23, the Friday before the HHS announced it was recommending S3. Yeah, we definitely got that one wrong because we couldn’t conceive of a set of circumstances where we would be trading lower than then, but here we are.
- Overall, the 82 companies we track in the sector are trading at a median market-to-book of .62x, EV / 2025 EBITDA of 4.64x, and Adj. EV/ 2025 EBITDAR of 6.17x. Mark those numbers; we will be surprised if we see much lower prints than these. The catalyst upside potential is as apparent as the timing is unknown. Not a time to bail, IMHO.
