the graph displays enterprise valueconsensus 2023 ebitda for the 22 analystrated us cultivation  retail companies in the viridian value tracker database by size and liquidity level  the green bars display ev2023 consensus ebitda while the yellow bars show the viridian cash flow adjusted current ratio calculated by adding annualized free cash flow to current assets in the standard current ratio the left side of the graph shows the 12 companies with less than 200 million in market cap while the bars on the right represent the ten companies with over 200 million each group is divided in half based on whether companies had above or below median liquidity ratios the graph clearly shows the narrowed valuation gap between small and large cannabis companies we have chronicled in the deal tracker the median multiple for the small companies is now 43x compared to 47x for the larger companies whereas this gap was over 500bp when we first did this exercise two years ago the smaller gap has significant ramifications for the accretiveness of acquisitions we believe the current gap is understated due to the relative illiquidity of the smaller companies interestingly and counterintuitively the lowliquidity small companies trade at a higher median multiple than their more liquid counterparts furthermore their liquidity ratio indicates the need for financing or other liquidity events in the next year possibly this group is being buoyed by takeover speculation as expected higher liquidity is rewarded with higher valuations within the large company group but the impact is not nearly as dramatic as we would have expected about half of the analystrated us cultivation  retail companies will need additional financing in the coming year yet the market is not exacting any significant discount for this larger and more liquid companies should be garnering a more significant valuation premium  the viridian capital chart of the week highlights key investment valuation and ma trends taken from the viridian cannabis deal tracker the viridian cannabis deal tracker provides the market intelligence that cannabis companies investors and acquirers utilize to make informed decisions regarding capital allocation and ma strategy the deal tracker is a proprietary information service that monitors capital raise and ma activity in the legal cannabis cbd and psychedelics industries each week the tracker aggregates and analyzes all closed deals and segments each according to key metrics   deals by industry sector to track the flow of capital and ma deals by one of 12 sectors  from cultivation to brands to software   deal structure equitydebt for capital raises cashstockearnout for ma status of the company announcing the transaction public vs private   principals to the transaction issuerinvestorlenderacquirer key deal terms pricing and valuation   deals by location of issuerbuyerseller to track the flow of capital and ma deals by state and country since its inception in 2015 the viridian cannabis deal tracker has tracked and analyzed more than 2500 capital raises and 1000 ma 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