The cannabis industry continues to evolve, and Q2 2024 saw a mix of performance from major players. Pablo Zuanic of Zuanic & Associates has provided detailed insights into the performance of three prominent companies: Verano Holdings, Green Thumb Industries, and MariMed Inc.
Verano Holdings: Strategic Acquisitions Fuel Growth
Verano Holdings achieved a 6% quarter-over-quarter revenue increase, reaching $233 million. This growth can be attributed in part to strategic acquisitions. The company has entered agreements to acquire operations in Virginia and Arizona from The Cannabist Company, which are expected to close in 2025. These acquisitions are anticipated to strengthen Verano’s market position. The company also experienced improved adjusted EBITDA margin, moving from 35.6% in Q1 2024 to 36.2% in Q2. This improvement is attributed to cost efficiencies and a favorable product mix. Despite this positive performance, Verano’s stock valuation remains conservative, with an EV/EBITDA multiple of 8.4x based on Zuanic’s estimates.
Green Thumb Industries: Resilient Performance and Expansion
Green Thumb Industries demonstrated robust performance in Q2 2024, with revenue growing 10% year-over-year to $335 million. Zuanic’s analysis highlights the company’s operational resilience, evidenced by maintaining an adjusted EBITDA margin of 32.5%. Green Thumb’s management has shown a focus on disciplined capital allocation, reflected in the company’s strong free cash flow of $45 million for the quarter. This strong performance has resulted in a forward EV/EBITDA multiple of 10x, positioning Green Thumb favorably compared to its peers.
MariMed: Focused Growth in a Challenging Market
MariMed Inc. reported a modest revenue increase of 4% year-over-year, reaching $37 million for Q2 2024. While this growth is slower than its peers, MariMed’s focus on organic growth and an improved EBITDA margin (20.4% from 19.8% in the previous quarter) are positive signs. Zuanic’s report also discusses MariMed’s decision to refrain from share buybacks despite market inefficiencies. MariMed’s stock trades at a forward EV/EBITDA multiple of 7.5x, suggesting potential undervaluation relative to its growth prospects.
These performances highlight the dynamic nature of the cannabis industry, with varying levels of success across companies. The industry is experiencing continued growth and evolving market dynamics, making it a fascinating space to watch.
