Verano CIO Aaron Miles On Margin Compression, Texas Expansion, Schedule III, and Why He Believes Cannabis Is “A Slam Dunk”

Following a first-quarter earnings report that highlighted $208 million in revenue, consecutive quarterly growth, and a new $20 million share repurchase authorization, Aaron Miles says Verano Holdings is positioning itself for what it believes could become the next major phase of the U.S. cannabis industry.

That phase, according to Miles, is being shaped by three converging dynamics:

• wholesale market normalization,
• federal cannabis rescheduling,
• and the long-term expansion opportunity in Texas.

In an interview with IgniteIt, Miles discussed margin compression, retail strategy, federal regulation, hemp-derived THC, cannabis capital markets, and why Verano believes its stock remains undervalued relative to peers.

“Margins Have Continued To Be Impacted By Pricing Compression”

Miles said Verano’s wholesale margins continue facing pressure from promotional activity and broader market normalization as cannabis markets mature.

“When we rolled out our presence in states early on, the margins were really high, the price per pound was really high,” Miles said. “As more and more players came in, there was just natural normalization in the market as pricing was coming down.”

He described the current cannabis landscape as “very fragmented,” with operators increasingly relying on promotions to compete in wholesale markets.

Still, Miles said Verano believes pricing conditions are beginning to stabilize.

“We do see some consolidation happening in the market, which I think will help with stabilization of margins,” he said. “You’re also starting to see pricing kind of stabilize in certain areas.”

Miles also pointed to inventory buildup during the quarter as another factor weighing on margins, though he said the company expects margin expansion during the second half of the year.

Despite the pressure, Verano reported sequential revenue growth from Q4 2025 into Q1 2026 — historically a softer quarter for cannabis operators.

“Our business is operating well,” Miles said. “We really put a lot of factors in place, from enhancements to our retail to really beefing up our wholesale team.”

Why Scale Matters In Cannabis

Miles repeatedly returned to scale as a defining factor in Verano’s long-term strategy.

He pointed to the company’s multi-state footprint, cultivation infrastructure, and vertically integrated model as advantages in a lower-margin environment.

“Scale can play a very pivotal role in this industry,” Miles said. “When you think about economies of scale, there’s a certain amount of fixed costs associated with facilities. When we’re able to sell into more accounts, that’s where margin expansion can really come into play.”

Miles highlighted Florida as one of Verano’s most important markets, describing it as “an extremely high margin state.”

The company plans to open five to 10 new dispensaries in 2026, with most expected to launch in Florida.

“We’re not in survival mode,” Miles said. “We’re in thriving mode where we’re able to invest a lot of the dollars that we make from a cash flow perspective and invest those back into our footprint.”

Automation, Retail Experience, and Brand Positioning

Miles said Verano continues investing heavily in automation, retail design, marketing, and branding as competition intensifies across mature cannabis markets.

“We’re looking at automation, we’re becoming more efficient,” he said. “We launched new technologies across our entire footprint.”

He also highlighted Verano’s “bodega-style” dispensary concept in Arizona, which he said has helped the company outperform broader declines in that market.

On the branding side, Miles said Verano regained the number one market share position in New Jersey late last year and has maintained momentum into 2026.

“We’re top three in every product category that we compete in,” he said.

Texas Could Become “Very Florida-Esque”

One of the most animated portions of the conversation centered on Texas.

Miles described the state as a potentially transformative opportunity for Verano following its recent medical cannabis license win.

“We have people with shovels in hand ready to put them in the ground as soon as we get a little bit more clarity,” he said.

Miles compared Texas to Florida’s early medical cannabis market, which eventually became one of the largest cannabis markets in the country.

“Texas could be very Florida-esque,” he said.

Verano entered Florida through its 2021 acquisition of AltMed and has since expanded to an 85-dispensary footprint in the state.

“What we have a history of doing is being first movers from a medical building program,” Miles said, referencing Illinois, New Jersey, Connecticut, and Maryland.

While Verano does not expect Texas to materially impact 2026 financial results, Miles indicated the company views 2027 as a more meaningful timeframe for expansion there.

Hemp-Derived THC And The “Loophole Closure”

Miles also addressed the hemp-derived THC market and the ongoing debate surrounding intoxicating hemp products.

“We’ve never been anti-hemp,” he said. “We’ve just always wanted them regulated the same way that we’re regulated.”

Miles said estimates for the hemp-derived THC market range into the tens of billions of dollars, including projections of a $4 billion to $8 billion hemp market in Texas alone.

“When you think about even a fraction of that coming back into the legal channels of cannabis, that’s going to have a big impact,” he said.

Wholesale Vs. Retail: “It’s Not One Versus The Other”

Although Verano’s retail business represents the larger share of its revenue mix, Miles rejected the idea that the company is pivoting away from wholesale operations.

“It’s not one versus the other,” he said. “We take a balanced approach to how we look at our portfolio.”

According to Miles, Verano’s business mix generally fluctuates between roughly 65% retail and 35% wholesale, depending on market conditions.

“If there’s opportunity in wholesale, which there is, we will take advantage of that,” he said.

Schedule III, 280E Relief And Federal Regulation

Miles said federal cannabis rescheduling remains one of the most important developments for the industry.

According to him, the overall impact of Internal Revenue Code 280E on Verano’s business is approximately $80 million annually.

“The overall 280E impact that we have on our business, including adult use and medical, is about $80 million a year,” Miles said.

He said the company remains closely engaged with regulators as the federal framework evolves.

“We have a history of working with very complex regulatory systems,” Miles said. “We have the top government affairs and compliance team in the space.”

Miles acknowledged that federal compliance requirements could become more complex than the current state-by-state system but said Verano has been preparing for that possibility.

“We’re Not Looking For Anything Special”

During the interview, Miles repeatedly framed cannabis normalization as both a healthcare and economic issue.

“We’re not looking for anything special,” he said. “All we want to do is be regulated and normalized like every other industry that’s out there.”

Miles argued that federal legalization and banking reform would improve market safety, reduce illicit activity, and expand access to capital markets.

“This is a slam dunk literally across the board,” he said.

Miles also said Verano has been preparing for broader capital markets access through its corporate structure.

“This is why we redomesticated from Canada into Nevada,” he said. “When the doors start to open, we’re going to be really ready to make those moves.”

Why Verano Authorized a $20 Million Buyback

Miles said Verano’s new $20 million share repurchase authorization reflects management’s view that the company’s stock remains undervalued relative to peers.

“We feel that we have the most undervalued stock in the space,” he said.

He noted that Verano trades at approximately 3.7x estimated 2026 EBITDA multiples, which he said sits below both peer averages and leading multi-state operators.

Still, Miles said the company continues evaluating acquisitions, Texas expansion opportunities, and investments across existing operations.

“That doesn’t mean we’re not going to do M&A,” he said. “That doesn’t mean we’re not going to focus on investing in Texas, and that doesn’t mean we’re not going to focus on Florida.”