Mergers & Acquisitions
Each week, Viridian publishes insights and analysis on completed M&A transactions in the prior week. Our analysis includes:
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- M&A Market Commentary
- Public and Private Companies
- Buyers & Sellers
- YTD M&A Analysis
- M&A by Industry Sector
- Deal Structure and Valuation Analysis
- Pending Deal Risk Arb Analysis
- Valuation Gap Analysis
Transaction Summary
- No M&A deals closed during the week ended July 18, 2025.
YTD Analysis
- YTD’s total M&A consideration is up 26.1% from the same period in 2024, while the deal count is down approximately 21.4%. However, transactions targeting the U.S. are up 79.2% from roughly $203 million to $364 million. LTM, 69 M&A transactions have closed with a total disclosed value of $1.25B, up 7.1% from 2024. This reflects that the LTM total is composed of 23 weeks of 2024 and 29 weeks of 2025.
Pending Risk Deal Arb Analysis
Valuation Gap Analysis
- The Valuation Gap
- The Valuation Gap measures the difference between the EV/ NTM EBITDA multiple for the largest MSOs and the same multiple for the next smaller group. This measure has been a significant driver of M&A activity since a larger gap creates an opportunity for more accretive transactions.
- The companies included in the large-cap index are Cresco (CL: CSE), Curaleaf (CURA: CSE), Green Thumb (GTII: CSE), TerrAscend (TSND: TSX), Trulieve (TRUL: CSE), and Verano (VRNO: CSE). The small company index now includes Ascend (AAWH: OTCQX), AYR (AYR.A: CSE), Cannabist (CBST: Cboe), Front (FFNT: CSE), Jushi (JUSHF: OTCQX), and Schwazze (SHWX: OTC)
- The gap decreased by 0.272 to -1.605 on July 18, 2025. Following the DEA announcement, the gap reached a recent peak of 3.55 on April 30, 2024. At -1.605, the gap indicates that, in the aggregate, the climate is inhospitable for transactions in which Tier 1 MSOs purchase Tier 2 MSOs. This may not be the case for individual combinations, however, as there are broad valuation metric spreads between the companies in each tier. For example, TerrAscend, GTI, and Curaleaf all trade well above the Tier 1 average, while Ascend trades well below the Tier 2 average. The overlap of licenses has been a major restraining factor inhibiting public/public acquisitions. The difficulty of selling duplicated operations in a capital-tight environment is a key reason. Eventually, however, we believe the industry will consolidate. To achieve this, MSOs may need to accept that valuation multiples will not return to 2021 levels, even if S3 is enacted. The upside catalysts of S3 and SAFER are currently stalling any movement in that direction, much like they are locking up the equity market.
- Historically, the vast majority of M&A transactions in the Cannabis Industry have involved public companies acquiring private companies, and the recently announced Vireo transaction continues this trend.
