Weekly Credit Tracker

Credit ratings are not currently available for public cannabis companies leaving companies, lenders and investors with a gap of information. The Viridian Cannabis Credit Tracker fills this gap. The model uses 11 market and financial statement variables to discern 4 key credit factors: Liquidity, Leverage, Profitability, and Size, to provide credit/liquidity analysis for over 370 public Cannabis/Hemp companies.
Weekly Credit Report – Three Ways of Measuring Credit Quality
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- We examined 13 major MSOs through the lens of three different measures of credit quality: The Viridian Credit Model ranking, Total liabilities to market cap, and adjusted net debt to 2026 consensus EBITDAR.
- The Viridian Credit Model utilizes 11 financial and market ratios to measure four fundamental factors of credit: Liquidity, Leverage, Profitability, and Size. The model synthesizes these four factors into a credit score and ranks the companies based on that score.
- Total Liabilities / Market Cap is our favorite single credit measure, as it reacts instantly to new information, implicitly incorporates the market valuation of off-balance sheet liabilities, and is directly related through option modeling to our Asset Value Coverage measure, which we publish each week in the Deal Tracker.
- Adjusted Net Debt/ 2026 EBITDAR is a bespoke Viridian ratio that is our second favorite credit measure. Adjusted net debt includes all operating leases and any tax liabilities over 90 days of tax expense (including “uncertain tax liabilities” for unpaid 280e taxes). EBITDAR adds back estimated lease expenses since they are deducted from EBITDA
- The chart shows the three measures for each of the 13 companies. There is a clear correlation between total liabilities to market cap (blue line) and adjusted net debt 2026 EBITDAR.
- Several companies, including Glass House, Curaleaf, Planet 13, TerrAscend, and Jushi, are viewed more favorably in terms of total liabilities to market capitalization. These companies may benefit from a longer-term viewpoint than the 2026 results. Glass House, for example, may be viewed as a long-term play on legalization. Curaleaf may be benefiting from the market perception that it is the best-positioned MSO to take advantage of International growth.
- Several examples show the opposite circumstance, where the market leverage number is significantly worse than the EBITDAR-based indicator. Verano is the best example. The total liabilities to market cap ratio is 5.9x, a level at which our asset value coverage ratio begins to dip below 1x. The adjusted net debt to EBITDAR ratio is only 2.68x, which is an acceptable measure even in a 280E environment. So why the big difference? One possibility is that the market leverage might be taking into account the $861M contingent liability from the Vireo suit. Or perhaps the market is taking into account potential execution risk from the company’s recent acquisitions? Ascend Wellness has a similar set of indicators. The total liabilities to market cap ratio is 13.34x, a level that generally indicates distress. However, the company has pushed most of its debt maturities to 2029, and while its adjusted debt-to-EBITDAR ratio of 3.86x is arguably too high in a 280E environment, it is not nearly as high as what we associate with distress.
- Finally, consider the case of Planet 13, where both total liabilities to market cap and Debt/ EBITDAR paint a better credit picture than the Viridian Credit Model. The Viridian Model penalizes the company for having both the lowest profitability score and the lowest size measures in the group. The weighting of multiple credit factors in the model produces a more balanced view.
Credit Tracker By Sector

Credit ratings are not currently available for public cannabis companies leaving companies, lenders and investors with a gap of information. The Viridian Cannabis Credit Tracker fills this gap. The model uses 11 market and financial statement variables to discern 4 key credit factors: Liquidity, Leverage, Profitability, and Size, to provide credit/liquidity analysis for over 370 public Cannabis/Hemp companies.
Weekly Sector Credit – Cultivation and Retail
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- We have shifted the focus of our Debt/EBITDA credit ratios to projected 2026 results rather than 2025. The results are significantly more positive, as one would expect given the uptick in MSO results that the consensus analyst opinions embody. Median Debt to 2026 EBITDA is only 2.07x for the group, a number that is acceptable even in a 280E environment. The catch, of course, is that the revenue and margins are less certain than those in 2025. Our justification for this longer view is that we have ratios that are geared to shorter periods, such as annualized funds from operations to liabilities in our model, which offset the use of 2026 EBITDA.
- The total liabilities to market cap ratio of 1.95x continues to indicate market-implied asset value coverage of debt of over 1.2x.
- Liquidity remains the Achilles heel of the sector. The free cash flow-adjusted current ratio of 1.01x suggests that around 50% of the sector’s participants will require additional funding to discharge their short-term liabilities. Not the best position to be in when the capital markets remain tight.
- See the Viridian Credit Sector Report for more details.
Weekly Sector Credit – Cultivation and Retail
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- We have shifted the focus of our Debt/EBITDA credit ratios to projected 2026 results rather than 2025. The results are significantly more positive, as one would expect given the uptick in MSO results that the consensus analyst opinions embody. Median Debt to 2026 EBITDA is only 2.07x for the group, a number that is acceptable even in a 280E environment. The catch, of course, is that the revenue and margins are less certain than those in 2025. Our justification for this longer view is that we have ratios that are geared to shorter periods, such as annualized funds from operations to liabilities in our model, which offset the use of 2026 EBITDA.
- The total liabilities to market cap ratio of 1.95x continues to indicate market-implied asset value coverage of debt of over 1.2x.
- Liquidity remains the Achilles heel of the sector. The free cash flow-adjusted current ratio of 1.01x suggests that around 50% of the sector’s participants will require additional funding to discharge their short-term liabilities. Not the best position to be in when the capital markets remain tight.
- See the Viridian Credit Sector Report for more details.