The first week of 2024 saw significant stock price appreciation for most of the 30 stocks Viridian Capital Advisors credit ranks weekly. As a proxy, the MSOS ETV rose 12.84%, the sharpest uptick since the HHS announcement at the end of August. There was no particular news to account for the uptick except for confirmation from the DEA that they are indeed studying the issue of rescheduling. The market just came back from the beaches wanting to believe.

Viridian believes that a move to schedule 3 with the benefit of eliminating 280e is likely. However, we are less inclined to think that the President will somehow push this through in time for the election. The DEA's process includes public comment periods and opportunities for challenges to its proposed rule-making. The timing to run this gauntlet is unclear but likely longer than the market wants to believe. 

Against this backdrop, we applied several screens to look for attractive investments:

Marimed (OTC:MRMD) is trading at only 1.1x its 52-week lows and was only up 1.9% last week. Part of this underperformance stems from the company's missing its 3rd quarter estimates. However, we believe it is well poised for 2024 and trades at only 4.3x consensus 2024 EBITDA.  

Trulieve (OTC:TCNNF) was up 14.4% last week but continues to trade at only 1.7x its 52-week low and 4.8x its 2024 consensus EBITDA. The company has made significant improvements to its balance sheet and overall profitability and has strong optionality with regard to a potential Florida adult use conversion.

Cresco (OTC:CRLBF) is the riskiest credit on the chart, ranking at #10; however, trading at only 1.8x its 52-week low and 6.06x 2024 EBITDA, the company will likely outperform the market.

Verano (OTC:VRNOF) is the third strongest credit in our rankings, and at 6.4x 2024 EBITDA, it has significant upside potential with lower-than-average pullback risk.

Planet 13 (OTC:PLNH) had a difficult 2023, with lower Las Vegas crowds and some stumbles in establishing its Florida presence, resulting in a modestly negative EBITDA year. Analysts are projecting significantly better results for 2024, and we take comfort in the low-leverage balance sheet.

The beginning of 2024 is a tricky investment climate. We have seen too many stocks trading up significantly based on rumors of imminent regulatory changes, only to drift lower as these catalysts fail to appear. Investors should look for solid companies that do not require changes to survive and are priced at a discount.

The Viridian Capital Chart of the Week highlights key investment, valuation and M&A trends taken from the Viridian Cannabis Deal Tracker.

Since its inception in 2015, the Viridian Cannabis Deal Tracker has tracked and analyzed more than 2,500 capital raises and 1,000 M&A transactions totaling over $50 billion in aggregate value.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.