Valuation metrics have fallen pretty steeply since the beginning of November. Our favorite valuation metric, Adjusted EV/ 2025 EBITDAR, has fallen from 7.00x on 11/1 to 6.04x on 11/15. The more commonly seen EV/2025 EBITDA has taken an even steeper drop from a median of 6.2x to 4.77x.
The Viridian Deal Tracker has a Chart that shows that EV/ NTM EBITDA multiples are now lower than they were on 8/25/23, the last trading day before HHS first announced its restructuring approval. The decline has been shocking even to those of us who have lived through unpleasant cannabis Christmas seasons before.
However, we remain convinced that investors will be well rewarded if they position their portfolios to avoid credit issues caused by refinancing stress or other liquidity crises. Look for companies with adequate free cash flow adjusted current ratios and total liabilities to market cap under 2x, and resist the urge to watch the tape. We can’t promise you won’t find more coal in your stocking this year, but the upside is now pretty convincing. Hang in there!
To View this Week’s Full Valuation Analysis by Company and Sector Click on Our Viridian Valuation Tracker
About The Viridian Cannabis Deal Tracker
Launched in January 2015, and having analyzed more than $75B in deals, the Viridian Cannabis Deal Tracker is a proprietary data service that monitors and analyzes capital raise and M&A activity in the legal Cannabis, Hemp, and Psychedelics industries. Our insights help companies, investors, lenders and acquirers make informed capital allocation decisions. Each week the Deal Tracker provides proprietary data and market intelligence on transactions, including:
– Deals by Industry Sector (Track the Flow of Capital and M&A Deals by Industry Sector)
– Deal Structure (Equity/Debt for Capital Raises, Cash/Stock/Earnout for M&A)
– Principals to the Transaction (Issuer/Investor/Lender/Acquirer)
– Key Deal Terms (Deal Size, Valuation, Pricing, Warrants, Cost of Capital)
– Deals by Location of Issuer/Buyer/Seller (Track the Flow of Deals by State and Country)
– Credit Ratings (Leverage and Liquidity Ratios)
Contact
Scott Greiper
CEO
Viridian Capital Advisors, LLC
646.330.0704
sgreiper@viridianca.com
