As the cannabis industry continues to expand, businesses need to keep a close eye on new product types and trends, form factors and pricing to stay competitive. Sales and product data sets from top analytics firms like BDSA, Headset, Eaze or Treez are often the go-to resources for entrepreneurs and business owners looking to stay ahead of the curve. For those looking to expand into new markets or seize emerging opportunities, market estimates and sizings from Prohibition Partners, Brightfield or New Frontier Data can be invaluable as well.
Now, while sales and product data are crucial for some decisions, entrepreneurs, investors, bankers and executives require a more nuanced understanding of the cannabis industry when it comes to capital allocation and financing. That’s where Viridian Capital Advisors’ data comes in. Based on a deep knowledge of the cannabis capital markets, Viridian provides vital insights that inform strategic decisions on financing, investment opportunities, company valuations, and potential mergers and acquisitions.
How much money is being invested into the cannabis space? Which sub-sectors are seeing the biggest cash flows? How is this changing over time? Is this a good or bad year for cannabis companies? Are businesses raising money via equity or debt? Is M&A picking up? Which regions and countries are hotter right now? Do public company valuations make sense? How do liquidity and credit ratings look?
All of this used to be included in Viridian’s weekly email blast. And now, the info will be available online, accessible through an interactive platform. According to information procured exclusively ahead of an official announcement, the Viridian Deal Tracker is debuting its web version this week. And access will be free on this website.
What’s The Deal Tracker?
Since its inception in 2015, the Viridian Cannabis Deal Tracker has become a source of deep data analytics on capital markets activity in the cannabis, CBD and psychedelics industries.
In the last 8 years, the tracker has collected and analyzed information on more than 3,000 capital raises and 1,500 M&A transactions totaling over $70 billion in aggregate value.
But, what’s the real value-add for companies, investors and acquirers? The weekly deal tracker displays the most pertinent information and analysis of the three key areas of cannabis capital markets: equity raises, debt raises and M&A transactions. This data source brings all the relevant information together in one concise report with a deep level of detail and analysis, providing actionable intelligence on:
- Deals by industry sector, to track the flow of capital and M&A deals by one of 12 sectors, from cultivation and brands to software.
- Deals by location of the issuer, buyer or seller, to track the flow of capital and M&A transactions by state and country.
- Deal structure (equity or debt for capital raises; cash, stock or earnout for M&A)
- Principals to the transaction (issuer, investor, lender and acquirer)
- Key deal terms (deal size, valuation, pricing, warrants and cost of capital)
- Credit ratings (a proprietary credit model that evaluates liquidity, leverage, profitability and size ratios for more than 370 public companies and all industry sectors)
- Valuation analysis (key financial valuation metrics for more than 370 public companies and all industry sectors)
The Online Tracker
When asked why Viridian is taking its deal tracker online, founder and president Scott Greiper explained that the team really had no choice. “The breadth and scale of coverage of the cannabis industry have become too rich to send in weekly emails,” he said.
Already teased in some emails over the last few months, four new data services are being included in the online version of the Viridian Deal Tracker:
- Cannabis Credit Tracker: credit, liquidity and leverage rankings for more than 370 public companies.
- Cannabis Valuation Tracker: valuation metrics on more than 370 public companies.
- Latin American Tracker: analysis on capital markets transactions in the Latin American cannabis, CBD and psychedelics industries.
- European Tracker: capital markets transactions in the European cannabis, CBD and psychedelics industries.
“World-class research, data and analytics have become even more vital in the emerging cannabis, CBD and psychedelics industries. Viridian is committed to continuing to provide world-class analytics and decision-making support tools for companies, investors, lenders and acquirers to make smart capital allocation and strategic decisions,” Scott Greiper, Viridian Capital’s founder and president said.
Data From The Lastest Tracker
To illustrate the value of Viridian’s data, let’s take a look at the latest Deal Tracker, encompassing the first six weeks of 2023.
The cannabis market is off to a slow start this year, with capital raises in the sector at a multi-year low. According to Viridian, just $242.5 million have been raised in the first six weeks of 2023 – a stark contrast to the $803.1 million that had been raised in the same period last year.
Interestingly, public and private companies have seen similar levels of investment, unlike 2022, where public companies had received most of the money invested into the industry in the first six weeks of the year.
“We are hearing more talk of groups assembling pockets of capital to pursue the acquisition of distressed assets. Much of this is focused on California, but opportunities abound in other developed markets that have been the chief victims of price compression,” the latest Deal Tracker reads.
The cannabis industry has also seen a slowdown in mergers and acquisitions (M&A) activity in the early weeks of 2023. Just 19 transactions worth a total of $150.1 million have closed so far, compared to 30 deals worth $1.27 billion at the same point in 2022.
What’s more, the average transaction size of $7.9 million is the lowest in recent years, a trend that has been largely driven by a decrease in U.S. activity. However, analysts believe that larger M&A deals may be on the horizon, with low trading multiples making Tier 2 and 3 MSOs and SSOs more attractive targets. Investors will undoubtedly be watching closely to see if this prediction comes to fruition in the months ahead.
“C-suite officers and investors rely on our in-depth understanding of the cannabis capital markets to help frame their key strategic decisions: how to finance themselves, where to invest capital, how companies are being valued, and whether they should be an acquirer or seller,” concluded Frank Colombo, head of data analytics at Viridian Capital. “Furthermore, as debt has become an even more critical source of capital for the industry, these participants have found our analysis of credit quality and its implications for the cost of capital to be invaluable.”