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

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Valuation Tracker

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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 – Where are the Tier 1 MSOs today?

  • The weekly detailed valuation report shows the valuation metrics of the seven U.S. MSOs with market caps over $300M.
  • The median value for EV / 2024 EBITDA is 8.42x, but that doesn’t convey the substantial variation between the companies, ranging from 5.14x for Cresco (CL: CSE) to 13.55x for Glass House (GLASF: OTCQX).
  • The chart below arranges the companies from the largest market caps on the left to the smallest on the right. Interestingly, multiples seem to be correlated with size for the five largest competitors. We view Glass House as a sort of contra-MSO, a stock to hold as a hedge against federal legalization. The company’s high multiples reflect its perceived role as a consolidator, and the company is most likely to be left standing when the smoke clears in California. Also, on a more technical basis, EBITDA is growing from a small base.
  • We are less sure what to make of TerrAscend’s high valuations. Part of it probably relates to its uplisting to the TSX, which widens its investor base. We are frankly unsure whether Canopy’s partial ownership is a positive or a negative.

Valuation Tracker By Sector

The Viridian Value Tracker is the most comprehensive valuation product in the industry.

    • 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.

Weekly Sector Valuation Report – The Agriculture Technology Sector has improved over the last three months.

  • The tables below show current Agtech sector valuation parameters compared to their values approximately three months ago.
  • The median tangible market-to-book ratio has improved from .11x to .20x, and the median market-to-book ratio has improved more from .16x to .80x, with more significant gains when we compare third-quartile valuation measures.
  • The median EV / 2024 revenue multiple for the six analyst-rated companies in the database has improved from 1.05x to 5.0x. However, we note that the bottom ¼ of companies are still showing negative EBITDA estimates.
  • We believe the sector will be a strong beneficiary of S3, which is likely to bolster the CAPEX budgets of the MSOs.

July 12, 2024

April 26, 2024

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Weekly Sector Valuation Report – The Agriculture Technology Sector has improved over the last three months.

  • The tables below show current Agtech sector valuation parameters compared to their values approximately three months ago.
  • The median tangible market-to-book ratio has improved from .11x to .20x, and the median market-to-book ratio has improved more from .16x to .80x, with more significant gains when we compare third-quartile valuation measures.
  • The median EV / 2024 revenue multiple for the six analyst-rated companies in the database has improved from 1.05x to 5.0x. However, we note that the bottom ¼ of companies are still showing negative EBITDA estimates.
  • We believe the sector will be a strong beneficiary of S3, which is likely to bolster the CAPEX budgets of the MSOs.

July 12, 2024

April 26, 2024