By Tom Kerr, CFA
OTCQX: VREOF
READ THE FULL VREOF RESEARCH REPORT
2nd Quarter 2026 Financial Results
On August 11, 2026, Vireo (OTCQX: VREOF) released 2nd quarter 2026 financial results, which showed strong revenue growth on a GAAP, Pro Forma, and organic basis.
Vireo reported Q2 GAAP revenue of $209.3 million, up 335% year-over-year, driven primarily by recently completed M&A transactions. Pro forma revenue was $254.9 million, reflecting the acquisitions of Hawthorne, Bridgewell, and PharmaCann as if they had been completed on April 1, 2026. During the quarter, Vireo closed its acquisitions of Hawthorne, Eaze, and Bridgewell, while announcing the acquisitions of FLUENT and C21, which will expand its retail footprint in Florida and strengthen its Nevada operations. Organic, or same-stores sales growth was approximately 7.0% in the quarter.
Vireo continued its aggressive acquisition strategy following quarter-end, closing the PharmaCann transaction to deepen its Colorado presence and entering Pennsylvania through the acquisition of PhytoNatural dispensary licenses. The company also announced an agreement to acquire select Cannabist assets, expanding its Colorado platform while entering Massachusetts, New Jersey, and Illinois. In addition, Vireo announced a merger with Planet 13 to further strengthen its positions in Nevada and Florida and expand its Illinois operations, as well as a four-deal transaction designed to establish a fully integrated vertical operation in Ohio, its 15th state.
Assuming completion of all announced transactions, Vireo expects to become the largest U.S. cannabis operator by dispensary count, with approximately 270 locations, and one of the largest U.S. cannabis companies by revenue. To support its continued acquisition strategy, the company secured a new asset-based revolving credit facility with an initial $65 million commitment, expandable to $105 million, priced at Term SOFR plus 1.75%–2.00%. Vireo ended the quarter with $122.7 million in cash and expects to remain active in pursuing additional acquisitions.
Vireo's management frames the current cannabis landscape as one where scale by itself is no longer sufficient to build lasting value. Instead, management points to disciplined capital allocation, operational execution, and effective integration as the traits that will separate durable winners from the competition. That thinking underlies every acquisition completed during the quarter. Rather than chasing growth for its own sake, the company is assembling a diversified cannabis and agribusiness platform in which each new investment adds to the strength of the whole organization.
With its pending transactions, Vireo now has one of the largest operating footprints in the industry, and management remains focused on lifting profitability, growing free cash flow, and building individual businesses worth $100 million or more across its core markets over time. The Hawthorne and Bridgewell acquisitions mark a deliberate step toward diversification, laying the groundwork for a national agribusiness supply platform that extends the company's reach beyond cannabis and forms the basis of its new non-cannabis reporting segment. Management believes these investments position Vireo to show the full earnings power of its platform as integration work carries into 2027.
Balance Sheet
As of June 30, 2026, total current assets excluding income taxes receivable were $374.0 million, including cash on hand of $122.7 million and marketable securities of $1.0 million. Total current liabilities excluding uncertain tax liabilities and contingent consideration were $181.4 million. Total debt outstanding was $298.8 million. We estimate the leverage ratio to be approximately 1.20x based on 6/30/26 balance sheet numbers.
Subsequent Events
After June 30, 2026, Vireo significantly expanded its footprint through a series of acquisitions and financing moves. The company completed its purchase of PhytoNatural through the Vive Penn joint venture, gaining a non-operational medical cannabis retail permit that could support up to six dispensaries and marking its entry into Pennsylvania. It also signed a definitive agreement to acquire cultivation, manufacturing, and up to 20 retail assets from The Cannabist Company, strengthening its Colorado presence while entering Illinois, Massachusetts, and New Jersey. It also announced an all-stock merger with Planet 13 to add cultivation, processing, delivery, and retail operations in Nevada, Illinois, and Florida.
Separately, four acquisitions in Ohio brought the company into its 15th state with substantial scale, including eight dispensaries, a cultivation and processing facility, and related real estate. Vireo also completed its acquisition of certain PharmaCann assets in Colorado, converting a prior management agreement into outright ownership, and secured a new asset-based revolving credit facility starting at $65 million and expandable to $105 million, priced at Term SOFR plus 1.75% to 2.00%.
Share Consolidation
On June 1, 2026, the company announced the consolidation of its subordinate voting shares, multiple voting shares, and super voting shares at a ratio of 30-for-1, which was effective as of June 5th. On the record date, the number of issued and outstanding Subordinate Voting Shares was reduced from 1,455,017,319 to approximately 48,500,577. Current shares outstanding as of 6/30/26 were approximately 54.4 million shares.
Valuation
We are maintaining our price target of $45.00 as we wait for further growth metrics and the closing 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 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.
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