The Viridian Chart of the Week on 8/27/23 demonstrated that cannabis is more capital-intensive than tobacco, alcohol, pharmaceuticals, or general consumer products. Cannabis measured 1.67x capital/sales. The industry has managed to reduce capital intensity slightly since then, and the group now measures 1.54x capital/sales.

The high capital intensity has severe implications for internally fundable growth. If, on average, it takes $1.54 of extra capital to get $1 of additional sales, with 30% EBITDA margins and high 280e taxes, it is clear that growth requires external financing. S3 will help but not eliminate this issue.

This week's chart explores the differences between major MSOs in...