This pot stock is undervalued, Beacon says

Beacon Securities analyst Russell Stanley said Verano Holdings (Verano Holdings Stock Quote, Chart, News, Analysts, Financials CBOE:VRNO) remains undervalued despite continued balance-sheet progress, reiterating a Buy rating and C$5.00 target in a January 15 update.

Stanley said Verano’s decision to upsize and extend its secured revolving credit facility was a clear signal of improving credit quality. The company increased the facility to $100-million from $75-million and pushed the maturity to February 2029 from September 2028, without pledging additional collateral. Verano has drawn $50-million to date, with pricing at SOFR plus 6% and no amortization.

Stanley said the expanded revolver enhances financial flexibility while underscoring lender confidence, particularly as the company advances discussions to refinance roughly $242-million of debt maturing this October.

He believes a successful refinancing could be a catalyst for a material rerating, noting Verano continues to trade at the lowest multiple among major U.S. MSOs. The shares are valued at about 4.7x his fiscal 2026 Adjusted EBITDA forecast, a roughly 40% discount to peers, despite stronger margins and lower leverage.

Stanley said Verano’s Adjusted EBITDA margins of about 28% in fiscal 2025 compare favourably with roughly 23% for comparable operators, while net leverage of about 2.8x is lower than peers closer to 3.7x.

Stanley also emphasized upside optionality not reflected in his estimates, particularly in Florida, Virginia, and Texas. Florida remains Verano’s largest market and could see renewed momentum toward adult-use legalization ahead of the November 2026 ballot, while prospects for adult-use in Virginia have improved following the recent gubernatorial election.

Verano has also secured a conditional license in Texas as the medical program expands. None of these potential catalysts are embedded in current forecasts.

Applying peer multiples to Verano’s fiscal 2026 Adjusted EBITDA would imply substantial upside from current levels, in Stanley’s view, with debt refinancing seen as the key step toward narrowing the valuation gap.

Stanley said Verano should generate about $228-million in Adjusted EBITDA on revenue of roughly $817-million in fiscal 2025, improving to approximately $241-million in Adjusted EBITDA on revenue of about $854-million in fiscal 2026.

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