By Tom Kerr, CFA
OTC: VREOF
READ THE FULL VREOF RESEARCH REPORT
3rd Quarter 2026 Financial Results
On November 10, 2026, Vireo (OTC: VREOF) released 3rd quarter 2026 financial results which showed good revenue growth on a GAAP, Pro Forma, organic, and sequential basis.
Vireo reported Q3 GAAP revenue of $253.7 million, up 177% year-over-year, driven primarily by recently completed M&A transactions. Pro forma retail cannabis revenues were $196.7 million (4.0% organic growth), reflecting the acquisitions of C21 Investments, Cannabist Colorado, and PharmaCann as if they had been completed on July 1, 2026. Pro forma wholesale cannabis revenues were $24.7 million (8.0% growth). Non-cannabis revenues were $55.6 million compared to zero in the prior year period which reflects the acquisitions of Hawthorne Gardening and Bridgewell Agribusiness.
Pre-tax income improved to $4.0 million compared to a pre-tax loss of ($13.0) million in the 3rd quarter of 2025. EBITDA improved to $26.8 million compared to negative EBITDA of ($2.1) million while Adjusted EBITDA improved to $42.7 million compared to Adjusted EBITDA of $25.4 million in the prior year period.
As of September 30, 2026, Vireo had $106.8 million in cash, $349.0 million in current assets and $153.2 million in current liabilities. Long-term debt totaled $293 million, resulting in net debt of $186.2 million, excluding convertible debt. We believe the company’s net debt leverage ratio is approximately 1.1x based on Q3 2026 Adjusted EBITDA run rate.
Fully diluted shares outstanding totaled 56.9 million, including 51.8 million basic shares and additional shares from RSUs, convertible debt, escrow, earn-outs, warrants and options.
Business Update
Vireo Growth has expanded its national footprint through a steady run of acquisitions. It completed the purchase of PharmaCann’s Colorado retail assets and C21 Investments, which added three Nevada dispensaries and about 104,000 square feet of cultivation and production space. It also took a 49% interest in a joint venture that bought PhytoNatural, which gives it a clinical registrant license in Pennsylvania. Announced deals still to close include select assets of The Cannabist Company in Colorado, Illinois, Massachusetts and New Jersey, an all-stock merger with Planet 13 that adds Nevada and Florida operations and an Illinois presence, and four Ohio acquisitions that would create a vertically integrated platform with eight dispensaries. Once these close, Vireo expects to operate about 270 dispensaries in 15 states.
Management says scale alone no longer creates lasting value in cannabis. It points to disciplined capital allocation, operational execution and integration as what will separate the long-term winners, and it says this thinking guided each acquisition completed during the quarter. The company is building a diversified cannabis and agribusiness platform in which each new business adds to the whole.
With the pending deals, Vireo would have one of the largest operating footprints in the industry. Management is focused on improving profitability, growing free cash flow and building each state business to $200 million in value. The Hawthorne and Bridgewell acquisitions are the first step toward a national agribusiness supply platform, and they form the company’s new non-cannabis reporting segment. Management expects the full earnings power of the platform to show as integration work continues into 2027.
Valuation
We are maintaining our price target of $45.00 as we wait for further growth metrics and the results of the most recent acquisitions. This valuation level represents meaningful upside potential from current levels. Our view is that once uncertainty related to the closing/integration of pending acquisitions fades (old and recent), VREOF’s improving fundamental story will increasingly resonate with investors, thereby driving a material upward revaluation for the stock. Vireo remains uniquely positioned to continue to roll up accretive assets, with further acquisitions likely representing incremental catalysts for the stock
In addition, a more favorable regulatory backdrop (particularly as it relates to federal rescheduling or incremental state legalizations) and/or further acquisitions of strategically complementary assets at attractive valuations likely represent powerful catalysts for VREOF. Finally, insiders (including directors and executive officers along with investment vehicles managed by related party Chicago Atlantic) own approximately 40% of VREOF’s total capital stock, reinforcing strong management alignment.
Our DCF model suggests a wide disconnect between VREOF’s fundamentals and the stock’s current price. Key inputs include: 1) EBIT margin forecasts through 2027; 2) slowing EBIT growth through the end of the forecast period; 3) a 12.5% discount rate; 4) a perpetual growth rate of 5% despite sustainably higher growth rates for the foreseeable future; and 5) an exit EV/EBITDA multiple of 6.0x.
VREOF is selling at approximately 71% of GAAP Book Value which is highly unusual for a growth company. Many of its competitors are selling above book value.
We also calculate a conservative EV/EBITDA ratio based on our 2027 EBITDA estimates with the EV containing uncertain tax position liabilities. Based on those factors, we believe the company is selling at only 3.7x 2027 Adjusted EBITDA. Using traditional EV calculations, the ratio falls under 3.0x.
The current market cap of only $350 million appears to be irrational and more reflective of the ongoing microcap stock malaise as opposed to company fundamentals.
Vireo Growth guided to Q4 2026 revenue of $250–$265 million and Adjusted EBITDA of $45–$48 million, and Q1 2027 revenue of $280–$300 million and Adjusted EBITDA of $53–$56 million. The Q4 figures include FLUENT only from its November 9, 2026 closing date and reflect a sequential revenue decline and seasonality in the non-cannabis business, while Q1 2027 includes a full quarter of FLUENT. Both ranges exclude acquisitions that were still pending as of November 10, 2026.
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