OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS

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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 AYR PLAN BECOMES MORE CLEAR AFTER MANAGEMENT INTERVIEWS

    • On July 30, 2025, Ayr Wellness (AYR.A: CSE)(AYWRF: OTCQX) entered into a Restructuring Support Agreement (RSA). Under the RSA, the company will support an Article 9 UCC sales process commenced by its senior secured noteholders.
    • The Noteholders have agreed to purchase, using credit bids, AYR assets in Florida, Ohio, Pennsylvania, Nevada, New Jersey, and Virginia at a consensual public disposition of the Senior Note collateral.
    • In exchange for cancellation of the credit bid portion of the Senior Notes, Senior Noteholders will receive their prorated portion of 100% of the new equity. The remaining portion of the Senior Notes not used in the credit bid will remain outstanding and be entitled to a cash distribution from the sale of the company’s remaining assets, which appear to be its Massachusetts and Illinois properties, primarily.
    • We originally thought that separate groups of creditors would purchase the assets and that the company would be split into different entities. That no longer seems to be the case, per recent interviews with AYR management. Scott Davido AYR’s Interim CEO said that the going forward business that the current senior debt holders will own will include:
      • New Jersey minus the Lakewood facility
      • Pennsylvania minus the three dispensaries in the College Station area
      • All of Florida
      • All of Ohio
      • The licenses in Virginia, which they expect to build out
      • Nevada minus several cultivation assets
    • More details about the process will become available in the next week in a public filing on the Restructuring Support Agreement.
    • One thing hasn’t changed. Current shareholders will face elimination in the restructuring.

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

    • Optimism is again afoot in the cannabis equity market, and the Q2 earnings reports so far have been better than expected.
    • Median Debt to 2026 EBITDA is 2.02x as of 8/1/25, compared to 2.20x as of 7/25/25, a significant move based mainly on analysts’ upward revisions after company coaching. This figure continues to show that over ½ of the companies have sustainable leverage even in a continuing 280E environment.
    • The median total liabilities to market capitalization ratio is now 1.92 times, indicating that more than half of the companies have an asset value coverage of liabilities of over 1.1 times, according to our option pricing model. However, the upper quartile of 7.11x indicates that more than a quarter of the 75 companies have less than 1x asset coverage of liabilities. See the Viridian Credit Sector Report for more details.
    • We continue to be surprised by the low liquidity of the sector. Our bespoke, free cash flow-adjusted current ratio has a median value of only 0.93x, indicating that more than half of the 71 companies we were able to measure will require additional funding during the next twelve months. This ratio is likely to deteriorate further toward the end of 2025 as 2026 debt maturities become current liabilities.

Weekly Sector Credit Cultivation and Retail

    • Optimism is again afoot in the cannabis equity market, and the Q2 earnings reports so far have been better than expected.
    • Median Debt to 2026 EBITDA is 2.02x as of 8/1/25, compared to 2.20x as of 7/25/25, a significant move based mainly on analysts’ upward revisions after company coaching. This figure continues to show that over ½ of the companies have sustainable leverage even in a continuing 280E environment.
    • The median total liabilities to market capitalization ratio is now 1.92 times, indicating that more than half of the companies have an asset value coverage of liabilities of over 1.1 times, according to our option pricing model. However, the upper quartile of 7.11x indicates that more than a quarter of the 75 companies have less than 1x asset coverage of liabilities. See the Viridian Credit Sector Report for more details.
    • We continue to be surprised by the low liquidity of the sector. Our bespoke, free cash flow-adjusted current ratio has a median value of only 0.93x, indicating that more than half of the 71 companies we were able to measure will require additional funding during the next twelve months. This ratio is likely to deteriorate further toward the end of 2025 as 2026 debt maturities become current liabilities.

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