By Thomas Kerr, CFA
OTC: VREOF
READ THE FULL VREOF RESEARCH REPORT
1st Quarter 2026 Financial Results
On May 12, 2026, Vireo (OTC: VREOF) reported 1st quarter 2026 financial results, which showed a strong increase in revenues and adjusted EBITDA.
Reported revenue growth increased 333.5% to $106.2 million from $24.5 million in the prior year period, largely due to acquisitions made in 2025. On a pro forma basis, 1st quarter organic revenues increased 5.0% year-over-year. Pro-forma retail revenues increased 5.5%, pro-forma wholesale revenues increased 9.0%, and non-cannabis revenues decreased 14.9%.
Gross profit during the quarter was $59.3 million (gross margin 55.8%) compared to gross profit of $12.4 (gross margin 50.6%) in the prior year period. This increase was driven by the closing of recent acquisitions, which added gross profits in Colorado, New Mexico, Nevada, Missouri, and Utah. The increase in gross margin was also driven by acquisition-related activity, as the businesses acquired had higher margins than the existing prior portfolio of businesses.
Reported adjusted EBITDA increased 395.5%, and pro-forma adjusted EBITDA increased 29.8% for the 1st quarter. Adjusted EBITDA margin improved to 30.8% compared to 26.9% for the prior year period. This was primarily driven by continued optimization of previous acquisitions.
As of 3/31/26, the company had $137.8 million of cash and an additional $1.0 million of marketable securities. Total current assets, excluding tax receivables and assets held for sale, were $239.7 million, compared to current liabilities excluding uncertain tax liabilities of $82.0 million, creating a strong current ratio of 2.92x.
During the quarter ending March 31, 2026, the company had operating revenue in eight states: Colorado, Maryland, Minnesota, New Mexico, New York, Missouri, Nevada, and Utah. Retail revenues during the 1st quarter were derived from sales in 82 dispensaries throughout these eight states. The company had 24 operational dispensaries in Colorado, 8 in Minnesota, 21 in New Mexico, 4 in New York, 2 in Maryland, 11 in Missouri, 11 in Nevada, and 1 in Utah. The company is believed to be the 4th largest cannabis company by total revenues.
Valuation & Estimates
We are maintaining our price target of $1.50 as we wait for further growth metrics and the closing of the most recent acquisitions. This valuation level still 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 2026; 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.
Based on expected deal closings from recent acquisition announcements, we update our 2026 estimates to $569.9 million, and our 2026 EPS estimate is now $0.01.
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