The MSOS ETF (ARCA: MSOS) gained 69.4% between 8/25/23, five days before the blockbuster announcement of an HHS rescheduling recommendation to this past Friday, 9/8/23. Similarly, the EV/Next-Twelve-Month consensus EBITDA multiples for the group in the chart have increased by 27.5%.
Viridian’s Chart of the Week looks at the valuation multiples of the eleven largest MSOs after previous announcements that produced upward spikes in Cannabis equity prices.
The chart depicts an aggregate multiple calculated by the sum of enterprise values divided by the sum of mean consensus EBITDA estimates for the following four quarters.
The group includes: Ascend (OTC: AAWH), AYR (OTC: AYRWF), Columbia Care (OTC: CCHWF), Cresco (OTC: CRLBF), Curaleaf (OTC: CURLF), 4Front (OTC: FFNTF), Green Thumb (OTC: GTBIF), Jushi (OTC: JUSHF), TerrAscend (OTC: TRSSF), Trulieve (OTC: TCNNF), and Verano (OTC: VRNOF).
Current valuation multiples of 8.8x for the group are now within 17.7% and 10.0% of the most recent 10.4x and 9.7x peaks in 2/11/22 and 11/25/22 after the fifth and seventh near passages of the SAFE ACT. We do not think these two peaks are fair estimates of what should be achievable in the current climate, as we never viewed …