Should you sell your Verano Holdings stock?

Roth Capital Markets analyst Bill Kirk lowered his near-term forecasts for Verano Holdings (Verano Stock Quote, Chart, News, Analysts, Financials CBOE:VRNO) in an Oct. 28 third-quarter preview, but kept a “Buy” rating and US$5.00 target price, saying the company remains a primary beneficiary of U.S. federal cannabis reform.

“We temper our 3Q expectations… as pricing pressure and the shift to value continues to impact operators,” Kirk said, also citing ongoing wholesale rationalization and new store cannibalization. He added that, despite these pressures, the shares are “more tied to federal reform (280E removal/Rescheduling), which still teases on the alluring horizon.”

Verano is a Chicago-based cannabis company that operates 157 retail stores in 13 states and grows and produces its own products in 12 of them. Verano runs 14 production facilities across the U.S., covering more than one million square feet. The company sells a wide range of premium cannabis products through its ten consumer brands.

Kirk now models Q3 net sales of US$203.9-million, down from US$205.5-million, and Adjusted EBITDA of US$60.7-million, down from US$65.9-million. His updated 2025 outlook calls for revenue of US$821.6-million (previous US$829.9-million) and Adjusted EBITDA of US$244.0-million (previous US$249.8-million). He forecast 2026 revenue of US$849.9-million (unchanged), with a modest improvement in EBITDA year-over-year.

Kirk noted that pressure on retail pricing is widespread across major markets, but Verano continues to hold up better than peers. In Florida, roughly 27.5% of its retail base, medical cannabis sales grew 16% year-over-year in the third quarter. New Jersey (12.1% of retail, 26% of wholesale) and Illinois (15% of retail, 25% of wholesale) are seeing similar competition-driven discounting, with Illinois prices down about 15% year-over-year, he said.

While sector growth continues, Kirk expects industry-wide margin compression as operators without refinancing options liquidate product for cash. In that context, he said Verano’s “premium brand, cultivation infrastructure and rationalized wholesale footprint” leave it well-positioned for any policy shift out of Washington.

“Those with scale and the balance sheets to weather macro pressure will be rewarded,” he wrote.

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