Cannabis Stock Buybacks

2 years ago
5

Are any public cannabis companies potential Leveraged Buyout (LBO) or Recap candidates?
The recently announced Curaleaf (OTCQX: CURLF) acquisition of Bloom can be considered an LBO. The acquisition, valued at 8x 2021 EBITDA, included 6x EBITDA in seller notes as consideration.
Neither Curaleaf nor its subsidiaries will guarantee the debt, which will only be by recourse to the equity and assets of Bloom.
Only one company in Viridian Capital Advisors database- Red White & Bloom (OTCQX: RWYBF) appears to be trading low enough for a full buyout. Several other companies, however, appear to be capable of repurchasing a significant portion of their outstanding equity.
AYR Wellness is the only company on the list that publicly announced a share repurchase program, with others appearing to be candidates. Seventeen other companies tracked do not have analyst estimates but may be potential candidates.
Partial recaps may also be an attractive alternative means of providing cash to owners in private companies.
The combination of languishing stock prices and more available and lower-cost debt could lead the cannabis industry in a direction few of us would have expected a year ago.
Episode 873 The #TalkingHedge looks at Viridian Capital Advisors Chart of the Week...
https://youtu.be/7uCXVKLKn8s

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