capital Archives - Green Market Report

Debra BorchardtAugust 29, 2023


The data now confirms that cannabis is more capital-intensive than other similar industries. A new report from Viridian Capital Advisors looked at the capital needs of cannabis companies versus four other industries. Viridian chose to compare cannabis to other companies and sectors that would be likely acquirers of cannabis companies upon federal legalization. They included tobacco, alcoholic beverages, pharmaceuticals, and consumer products.

In the chart, the cannabis section is made up of nine multistate operators with market caps over $100 million. The rest of the group are as follows:

  • Tobacco includes British American Tobacco (BTI: NYSE), Altria (MO: NYSE), Phillip Morris International (PM: NYSE), and Japan Tobacco (JAPAF: NYSE).
  • Alcoholic beverages include ABEV (ABEV: NYSE), Brown-Forman (BF.B: NYSE), Constellation Brands (STZ.B: NYSE), Diageo (DEO: NYSE), and Molson Coors (TAP: NYSE).
  • Pharmaceuticals include Johnson & Johnson (JNJ: NYSE), Pfizer (PFE: NYSE), Merck & CO. (MRK: NYSE), and Eli Lilly (LLY: NYSE).
  • Consumer products include Colgate Palmolive (CL: NYSE), Mondeles (MDLZ: NYSE), Proctor & Gamble (PG: NYSE), and Unilever (UL: NYSE).

To understand its chart, Viridian explained that the capital intensity of each group (depicted by the green bar) is measured by its aggregate next 12-month consensus revenue estimates divided by aggregate capital employed (book equity + total debt –cash). In other words, the lower the bar, the more capital the industry needs to generate $1 in sales.

“The capital intensity issue is a big one for cannabis,” Viridian analyst Frank Colombo said. “I suspect that some of the operators who have just finished big capex/acqs might argue that they are set up for years of growth without much need for additional capital but the uniformity of the numbers across the group argues differently. I have also used forward 12-month sales to account for this. The idea is that your capital comes ahead of your sales.”

Granted, most cannabis companies were likely aware of this fact, but now there’s proof. Much of the problem can be tied to the status of cannabis as a federally illegal product. The MSOs represented in the chart have multiple overlapping operations because their products can’t cross state lines. This duplication of operations leads to inefficient businesses that end up spending more money than their peers on the legal side of the equation.

However, if cannabis gets rescheduled or fully legalized at the federal level, then those costs will likely come down. MSOs could potentially centralize operations to save money and duplicated roles could be eliminated.

“The good news, as I tried to point out, is that when and if interstate commerce happens it will help this issue significantly,” added Colombo. “The ability to reorganize activities on a national/international scale should allow some economies of scale from a capital point of view.”

Unfortunately, many cannabis companies are finding that the need to keep feeding the capital beast is crushing them. Huge debt bills are coming due and getting pushed out. Companies strapped for cash aren’t finding investors willing to take the risk.

“The capital shortage matched with capital intensity makes rapid growth impossible,” Colombo concluded.

Video StaffMay 17, 2022


On April 28, 2022, the Green Market Report hosted its first Women’s Summit in New York City. This panel was titled “Raising Capital” and addressed the challenges women face when raising money. From perfect balance sheets as female-owned companies struggle to raise capital that male-led companies don’t. This panel/presentation will give ways to overcome these issues. Panelists included Tahira Rehmatullah – CEO Commons, Daisy Mellet – Merida Capital Partners, Jen Drake – COO Ayr Wellness (OTC: AYRWF) and moderated by Chloe Aiello – Cheddar News.

Thank you for watching the Green Market Report! Be sure to subscribe to our channel and our newsletters.

StaffOctober 17, 2019


Holistic Industries

Private company Holistic Industries closed on $55 million in funding. The multi-state operator (MSO), which started on the East Coast and has rapidly expanded to the Midwest and West Coast, currently operates in California, Maryland, Massachusetts, Michigan, Pennsylvania and Washington D.C., with numerous licenses pending across the country. Holistic Industries said it will use the funding to accelerate expansion and provide greater access for patients and consumers to its high-quality cannabis products.

“From the highest quality products and store design to putting employees first and managing assets responsibly, we are a true operator with the ambition to be the best place to work, shop and invest in the cannabis industry,” said Josh Genderson, CEO of Holistic Industries. “Our mission is to provide patients and customers access to the safest and highest-quality products possible, and with this latest investment, we will continue to deliver on that mission.”

Founded by Josh Genderson in 2011, Holistic Industries has grown into a national medical and consumer goods company, cultivation and extraction network, and retail dispensary chain. Genderson launched Holistic based on the retail, distribution and brand manufacturing expertise he gained serving as President of Schneider’s of Capitol Hill, the Gendersons’ fourth-generation, family-owned liquor business which is a staple in Washington, D.C. and a leading national distribution company.

CBD Unlimited

CBD Unlimited, Inc. (OTC: EDXC) formerly known as Endexx Corporation (EDXC) secured a stage one $2 million financing program. CBD Unlimited’s three-pronged approach has made headway to its financial targets as a critical piece was completed in its short-term, mid-term, and long-term goals. The past year has provided CBD Unlimited, along with other companies in the Hemp industry, extended opportunities and increased demand with the legalization of hemp-derived products.

“This announcement represents a significant milestone for CBD Unlimited, as “Family Offices” and small institutional investors recognize the value of early investments in this booming CBD industry. The money secures continued growth and its goal of establishing vital retail space in key storefronts nationally,” commented Todd Davis, CEO & Chairman of CBD Unlimited. “We recently surpassed 5,000 stores and the demand has never been higher. Hitting these types of financial targets is what drives the Company forward as we continue to achieve tangible results.”

The company said the proceeds will be used for short-term manufacturing and fulfillment requirements. The funds will be used for inventory production and marketing, while expanding store count nationwide. CBD Unlimited has surpassed its year-end goal of more than 5,000 stores, four months in advance of its forecasted year-end target.


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