You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.
Friends,
About three months ago, this newsletter discussed how cannabis stock traders care a lot about MSOs again, but that they were not paying attention to an older MSO that was in the process of getting much larger, Vireo Growth. As I pointed out then, despite its very large size, Vireo Growth did not qualify to join the Global Cannabis Stock Index due to its low trading volume. Yesterday, I went through the process of quarterly rebalancing for the upcoming new quarter that begins at the end of trading in seven days, and Vireo still does not qualify. The price, at $0.5682 then, was above the minimum of $0.50, but the stock has traded on average just 221K shares a day over the last month. The dollar volume has been close to $100K, which is way below the minimum required.
I shared that there weren’t many analysts following Vireo three months ago, and this remains the case. The Vireo Growth website has no analysts listed on its analyst coverage page, Seeking Alpha does share analyst estimates, stating that there is one analyst. I use a system, Koyfin, and it has the same estimates. As I mentioned, Zuanic & Associates does cover the stock, but I don’t think that its estimates are included in the consensus. It expects Vireo revenue to grow to $436 million in 2026 from $259.9 million in 2025, according to a report it issued in mid-November.
Since then, the company has announced two pending transactions and has bought a lot of senior convertible debt of Schwazze at a discounted price. This month, the company said that it is buying some assets from PharmaCann in Colorado and that it is buying Eaze to get access to California and Florida. Vireo is very actively consolidating the cannabis industry. A year ago, the company was in Minnesota, which has gone adult-use, and Maryland, and it had a failing business in New York. Its Q3 report reflected acquisitions in Missouri, Nevada and Utah. Total revenue reported of $91.7 million included $12.0 million in Minnesota, $10.4 million in Maryland, $6.1 million in New York (mainly from wholesale sales) and $63.2 million from the new states. Vireo has climbed in the NCV revenue rankings, reaching #7 among the MSOs, with a positive operating income in Q3:
While Vireo Growth is 7th of the MSOs in terms of revenue, it is the 11th largest position in AdvisorShares Pure US Cannabis ETF (MSOS), which has a stake worth just 0.6% of the fund. 9.51 million shares controlled by MSOS has decreased since last week, as the ETF has faced some redemptions, but it is still up a lot from the 6.9 million shares at mid-year and the 6.7 million at year-end 2024. At the end of June, the stake was 1.0% of the ETF, so it has declined. The three top positions represent an average of 22.4% each of MSOS, which is 36X the size of the VREOF position. This is not at all aligned with its market share or market cap.
Vireo Growth did a very large capital raise in late 2024, selling $81 million of stock at $0.625, and it has recently traded below that level and closed there today. It has issued a lot of stock to cover its acquisitions. In fact, the company reports over 1 billion shares outstanding now. The stock ended 2024 at $0.56, so it has increased this year by 11.6%. This compares to the Global Cannabis Stock Index at 6.92, up 0.6%, and MSOS returning 24.7%.
I think that cannabis investors should watch Vireo’s stock closely for a sign of the overall cannabis sector’s health. At 420 Investor, I include 19 cannabis stocks on my Focus List, and this group does not include Vireo Growth. I do pay attention to it, though, as it is part of a group of 7 stocks that I have on my watchlist of stocks to potentially add to the Focus List. While it is not in the index, the other six are in it or will be in it in a week.
I am wishing the best for Vireo Growth, and I wish all of the New Cannabis Ventures readers a Merry Christmas.
Sincerely,
Alan
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published this past week:
Exclusives
Canadian Cannabis Sales Sank in October Due to BC
M&A
Vireo To Buy Eaze for $47 Million in Stock
To get real-time updates, follow Alan on X.com. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.
View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.
Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor calendar.
