Could Vireo Become the Largest Cannabis Company in the World?

A Roll-Up Strategy Emerges

With most cannabis stocks plumbing all-time lows and investors fleeing the sector, one of the biggest stories in cannabis is flying under the radar.

The idea that Vireo Growth (OTC: VREOF) could one day become the world’s largest cannabis company seemed far-fetched last year—and almost laughable now. But Vireo’s management may be the ones laughing soon, as they quietly execute one of the boldest roll-up strategies in the industry.

Vireo Growth is a rising giant born from a company once left for dead. Everything changed last December, when Chicago Atlantic’s Executive Chairman and co-founder, John Mazarakis, took over as CEO. Soon after, the company announced a series of transformative transactions, including an $81M equity raise at $0.625 per share and four acquisitions.

Let that sink in—at a time when investor sentiment was scraping the bottom, Vireo pulled off a massive, oversubscribed raise at a 149% premium to the trading price.

Last week, Vireo offered a preview of the new company, revealing a pro forma annual run rate of $358 million in revenue and $94 million in adjusted EBITDA. Those numbers could accelerate further with Minnesota’s adult-use market launching soon (reminder: the state has only two medical operators), and New York finally gaining momentum.

And this is likely just the beginning. Management has made it clear—they're hunting for more acquisitions. And no one is better positioned to execute than Vireo. The company has one of the strongest balance sheets in a distressed industry, backed by Chicago Atlantic—one of cannabis’s largest lenders, with $2.7B in closed loans and over 20% of the industry’s debt market share.

We’ve already seen the power of this lending arm: Chicago Atlantic converted debt into control of Vireo, then facilitated mergers with Deep Roots (Nevada) and Proper (Missouri).

Vireo also faces little serious competition in its roll-up strategy. Most major cannabis companies are weighed down by over-leveraged balance sheets and shrinking businesses. Green Thumb (OTC: GTBIF) is a notable exception—but seems more focused on hemp and financial engineering via its NASDAQ shell, Agrify (NASDAQ: AGFY).

Meanwhile, the industry is littered with distressed operators desperate for capital. Vireo can convert debt into equity and acquire these businesses at fire-sale prices. In this buyer’s market, Vireo holds all the leverage—and we expect continued all-stock deals at premiums to the current share price.

At $358M in annualized revenue, Vireo is still well behind the fifth-largest cannabis company, Cresco (OTC: CRLBF, revenue ~$691M), and the largest, Curaleaf (OTC: CURLF, revenue ~$1.3B). But remember—just a few months ago, Vireo was sub-$100M in revenue. Things are moving fast. If the acquisitions keep coming, Vireo could rapidly ascend the leaderboard.

Our research indicates that Chicago Atlantic already owns three companies with large cultivation sites in Ohio and Pennsylvania, plus several dispensaries and licenses to build up to 18 more. These assets could be consolidated into Vireo.

And let’s not forget the Verano (OTC: VRNOF) saga. Vireo was left at the altar by Verano, and there's a pending lawsuit with potentially significant damages. Verano has just $84M in cash, $859M in long-term liabilities, and over $300M in debt due by 2026—$293M of which is owed to Chicago Atlantic, their largest lender. Could the Verano-Goodness transaction finally be revived?

That’s just one high-profile example of how Vireo could grow faster than many expect. The constant insider buying seems to indicate that not only does management think the stock is cheap but that the stock price does not match the expectations of management.

Of course, there are risks. Integrating acquisitions is hard—especially in cannabis, with its patchwork of regulations. Vireo’s solution? Operate each business as a decentralized, autonomous unit with performance-based earnouts.

There’s also the challenge of all-stock deals potentially pressuring an illiquid stock. And the broader industry headwinds—intensifying competition and falling prices—aren’t going away. Still, with lockups preventing near-term selling and clawback provisions protecting against deterioration, we believe the medium-term upside outweighs the risks.

So keep your eye on Vireo. While few are watching, it could quietly become one of the biggest—if not the biggest—cannabis company in the world.