Credit quality in the cultivation & retail sector continues to be a concern. The median free cash flow adjusted current ratio of the 94 companies is now 0.59x, indicating that more than ½ will likely need additional financing during the next twelve months. Thirty-two companies have sell-side analyst coverage, and the median debt/ 2024 EBITDA for the group is 2.95x, a level that may be sustainable post 280e but is too high with current taxes. The third quartile statistic of 4.3x indicates that 25% of the group has leverage that will be difficult to support even in a post-280e environment. (See our weekly Viridian Insights for further explanation). Still, we expect that companies will be able to extend their debt maturities and reduce leverage through small equity issues. We advise companies to “average up” rather than waiting for ideal pricing.