So, we finally have it....what is Verano worth (at least as of today):
Answer: $31.4/Verano Share CAD (i.e., $24.72/Verano Share USD using a 1.27 exchange rate)
SolCF owns 25.2MM Shares pursuant to the latest press releases
Pre-tax Value of 25.2MM Shares = $623MM Shares USD
Post-Tax Value of 25.2MM Shares if Sol sold everything today = $498.4MM USD using a 20% cap gains tax rate
~Post-tax Value of Bluma Contribution to Sol on a Post-Tax Basis when deal closes = ~$75MM USD
~Post-tax Value of remaining portfolio (e.g., Engine, Jones, etc...) = ~$28MM USD
Number of Sol Shares Outstandings ~72MM (including the latest compensation addition)
Debt ~ $56MM CAD (i.e., debt + accrued interest todate) = $44MM USD
Total Value for Sol = Contributions of Verano + Bluma + Remaining Portfolio - Debt = ~$557.4MM
Total NAV of Sol = $7.74/Sol Share USD
But wait...what about that 1235 Fund Lawsuit thats out there:
If 1235 Fund wins the lawsuit (big IF), than that would be ~$44MM they could possibly receive Verano shares at $10 per share which would mean 4.4MM Verano Shares.
Today, the loss of those Verano @$24.72/share to Sol Global = a loss of 108.8MM
This would adjust the total NAV of Sol to $6.23/Sol Share (only if Sol lost the suit, which is unlikely)
With SolCF trading at $4.71 that represents a discount of 32% or 64% to it's NAV depending on what you think will happen with the law suit.
So, if you believe Sol will win the lawsuit, than Sol is trading at a 64% discount to its underlying NAV.
If you think they lose the lawsuit, then it's closer to 32%.
Of course, there could be legal bills related to this but I don't anticipate that to be significant given the nature and size of the dispute. That's just my simple opinion.
In either case, Sol is trading at a massive discount. This morning it rose to $5.4/Sol share before there was large dump of shares from 9:40am CST to 9:45am CST @$4.66/Sol Share which dropped the shares by ~14%. Thereafter the shares flatlined as shareholders were still stinging from the singular dump.
I believe this dump is temporary and the shares will recover to closer to Sol's NAV (as noted above).
Additionally, there are tailwinds coming that will assist Verano and SolCF to help them trade upwards
1. Verano is still trading at ~24% below its Median value when compared to its peer group members (i.e., Curaleaf, Green Thumb, Trulieve, and Cresco Labs).
2. Verano will be listed on the OTC shortly in the next several weeks which enable US investors a chance to partake in the festivities opening up the demand pipeline 10 fold
3. Verano will put out its earnings/financials and begin marketing its forecasts for this year and next (getting the word out that it is expecting to hit $350MM+ on EBITDA will further solidify its value)
3. Equity Analysts will begin to pickup coverage of Verano and begin to put out there own value estimates which will likely be towards the higher ends of the peer group multiples simply because Verano has a combination of:
a. better nationwise footprint
b. better protection in license moats relative to other peer members
c. Better EBITDA margins than all peer group members except trulieve
d. Better growth revenue growth rates than all peer group members
4. SolCF will shortly come out (most likely after the OTC public debut) with their own updated NAV values which will show the disparity in valuation
5. Our illustrious government (i.e., Schumer/Booker and more) will get further progress in decriminalizing marijuana and declassifying MJ as a Schedule 1 drug with potential for elements of SAFE banking to pass.
6. Verano will likely prepare an S-1 in anticipation of uplisting to the NYSE
7. SolCF will hopefully resolve the lawsuit
8. Verano will uplist to the S-1
Each of those events have the opportunity to present further upside/positive tailwinds for Verano which will further drive SolCF shares upwards.
I hope that helps put numbers to all the chatter and whatever you do....Happy Investing!
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