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 – How do the major Canadian Cannabis Companies Look from a Credit Perspective?
-
- The only closed capital raise for the week was a small ($3.27M) private placement of equity units. The raise spurred us to investigate the credit metrics of the sixteen Canadian LPs with over $20M market Cap.
- The table below shows the group’s credit metrics.
- The free cash flow adjusted current ratio median of 2.40x for this group is significantly higher than the 1.57x for the same market cap screen for U.S. Competitors. The Canadians clearly have much better liquidity.
- Similarly, the Total Liabilities/ Market Cap median for the Canadian group is only .52x compared to 3.59x for the U.S. companies. The Canadians have much lower leverage on a market value basis.
- The one place where the U.S. companies shine is profitability. The U.S. companies had a median 2024 EBITDAR/ Revenues of 24.7% compared to 6.25% for Canadians.
- The chart below shows the Viridian Capital Credit Tracker model rankings of the sixteen companies in the group. Rubicon Organics ranks near the middle of the group at #9/16. See the detailed table for more relative credit ranking information.
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 & Retail Sector after Q2 earnings releases
-
- This week’s credit sector report is a first look at sector credit stats after the first quarter earnings releases.
- Leverage for many companies remains unsustainable in a 280E environment. Median Debt/ 2025 EBITDA is 3.68x, up from 3.54x last week. This leverage ratio is well beyond the maximum sustainable ratio of around 2.3x we calculate for a 280E environment and right at the tolerable limit in a post-280E environment. Over half of the sector participants need to do balance sheet repair.
- The good news is that through trimming expenses and reducing capex, the median free cash flow adjusted current ratio is now 1.04x, up from 1.02x last week, indicating that at least half of the 79 companies in the sector are able to cover their short-term liabilities without needing additional funding.
- Our favorite leverage indicator, total liabilities to market cap, took a hit this week, rising to a 2.39x median compared to only 1.81x last week. While this shows diminished asset value coverage, it is still well below the critical level of 5x, where we begin to see less than 1x asset value coverage of liabilities.
Weekly Sector Credit – Cultivation & Retail Sector after Q2 earnings releases
-
- This week’s credit sector report is a first look at sector credit stats after the first quarter earnings releases.
- Leverage for many companies remains unsustainable in a 280E environment. Median Debt/ 2025 EBITDA is 3.68x, up from 3.54x last week. This leverage ratio is well beyond the maximum sustainable ratio of around 2.3x we calculate for a 280E environment and right at the tolerable limit in a post-280E environment. Over half of the sector participants need to do balance sheet repair.
- The good news is that through trimming expenses and reducing capex, the median free cash flow adjusted current ratio is now 1.04x, up from 1.02x last week, indicating that at least half of the 79 companies in the sector are able to cover their short-term liabilities without needing additional funding.
- Our favorite leverage indicator, total liabilities to market cap, took a hit this week, rising to a 2.39x median compared to only 1.81x last week. While this shows diminished asset value coverage, it is still well below the critical level of 5x, where we begin to see less than 1x asset value coverage of liabilities.
