OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Valuation Tracker By Industry Sector
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.
Week ended 01/03/2025
Sector Valuation – Cultivation and Retail Enhanced Valuation Measures Show More Realistic Valuations than Standard EV/EBITDA
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- Viridian prefers an enhanced valuation metric, Adj EV/ 2025 EBITDAR, to describe the sector’s valuations. We add all operating leases into debt and also include as debt any accrued taxes in excess of 90 days of tax expense. These two modifications significantly increase the measured enterprise value of several MSOs. We use EBITDAR as our denominator since lease expense is deducted from EBITDA, whereas interest expense is not. Our sector valuation report shows a median value on our enhanced ratio of 6.51x compared to 4.58x for the standard EV/2025 EBITDA ratio. Our take: cultivation & retail companies are still great values, but they are not nearly as cheap as they appear.
Week ended 01/03/2025
Sector Valuation – Cultivation and Retail Enhanced Valuation Measures Show More Realistic Valuations than Standard EV/EBITDA
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- Viridian prefers an enhanced valuation metric, Adj EV/ 2025 EBITDAR, to describe the sector’s valuations. We add all operating leases into debt and also include as debt any accrued taxes in excess of 90 days of tax expense. These two modifications significantly increase the measured enterprise value of several MSOs. We use EBITDAR as our denominator since lease expense is deducted from EBITDA, whereas interest expense is not. Our sector valuation report shows a median value on our enhanced ratio of 6.51x compared to 4.58x for the standard EV/2025 EBITDA ratio. Our take: cultivation & retail companies are still great values, but they are not nearly as cheap as they appear.
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