Chart of the Week
The Viridian Capital Chart of the Week highlights key investment, valuation and M&A trends taken from that week’s Deal Tracker that we believe are impactful for investors, companies and acquirers.
Viridian Capital Chart of the Week: MAYBE THE 2026 DEBT “TSUNAMI” HAS BECOME LESS WORRISOME?
- The Viridian Chart of the Week shows the 2026 sources and uses of cash for twelve major MSOs with a goal of gauging the severity of the remaining 2026 debt maturities.
- The bars on the chart add layers of fixed charges: Black represents non-280e taxes, red shows the additional taxes from 280e, purple is operating lease expense, green depicts interest expense, purple is capital spending, and blue is debt maturities. We have been conservative by showing 280E taxes being paid in cash, whereas if it is not eliminated, companies will probably still elect to accrue but not pay.
- The orange line represents EBITDAR, calculated by adding consensus 2026 EBITDA estimates to Viridian’s estimate of 2026 operating lease expenses. The brown line adds in each company’s cash balance as of 6/30/25.
- We originally did this graph in early 2025, and at that time, the wave of maturities seemed alarming. Companies that were highly rated in the Viridian Credit Tracker Model, including Trulieve, Curaleaf, Verano, and Cresco, had aggregate maturities of about $1.5B At that time, we expressed confidence that due to strong asset value and fixed charge coverages along with strong overall credit profiles, the above group would be able to refinance their debt. Cresco is the only one that has done the refinancing so far, eliminating about $360M of maturities from the total. However, we still believe the others will be able to refinance their debts without any dire consequences. The biggest risk is that rescheduling fails and stocks return to their former lows, dealing a severe blow to market confidence. We do not view this as likely, but there is no denying that refinancing is part financial metrics and part market psychology.
- We were more concerned with Cannabist, AYR, 4Front, and Jushi. Cannabist managed to extend and pretend; the company is still overleveraged, but has until 2029 (if it utilizes its extension) to work things out. 4Front and AYR did not have as much luck, and both are in the process of lender takeovers. Only Jushi remains. We don’t think Jushi is nearly as bad off as the others in the group: over 1x asset coverage, reasonable Viridian Credit Scores, etc. Still, when one examines a comprehensive definition of debt, including operating leases and taxes, Jushi appears highly leveraged, and its maturities remain substantial relative to its market capitalization.
- All of these companies have difficult decisions to make. Wait and hope S3 comes through, and be able to refinance in an ebullient market? Or beat the refinancing rush by getting something done before the end of the year?
- Overall, our feeling is that the 2026 maturity wave is no longer the scare factor it once was.
